1.)

Greater availability of alcohol leads to more motor vehicle accidents and, thus, imposes costs on people who do not drink and drive.The following graph shows the market for alcohol.

Determine whether the private and social values are equal in this case. If they are not, shift the demand curve in the appropriate direction to reflect this difference. Then determine whether the private and social costs are equal in this case. Again, if they are not, shift the supply curve to reflect this difference.

O Supply Demand Supply + Price of Alcohol Market Demand QOptimum Deadweight Loss Quantity of Alcohol