1. Price stabilization policies similar to rent control apply to about half of the private rental housing in New York City. (a) Graph the impact of a binding rent policy on rent controlled apartments. i. Compared to the (counterfactual) competitive equilibrium outcome, is there are shortage or surplus? ii. What is the impact on price, quantity, and consumer and producer surplus, relative to competitive equilibrium? (b) Graph the impact of a binding rent control policy on market-rate apartments. What is the impact on price and quantity? (c) Besides the impacts on price, quantity, and welfare, what are the other economic consequences of rent control, i.e. the "secondary effects"? Suppose the United States imposes a $0.50 tax on each gallon of gasoline sold. (a) Should they impose this tax on producers or consumers? Explain carefully using a supply-and-demand diagram. (b) Will the price paid by consumers rise by more than $0.50, less than $0.50, or exactly $0.50? Explain. (c) If the demand for gasoline were relatively more elastic, would this tax be more effective or less effective in reducing the quantity of gasoline consumed? Explain with both words and a diagram. (d) If this market has very elastic supply and very inelastic demand, how would the burden of a tax be shared between consumers and producers? Use the tools of consumer surplus and producer surplus in your answer.