1.Sketch a graph of the market for peanut butter, labeling the supply and demand curves, both axes, and the equilibrium price and equilibrium quantity.Now, a per-unit tax is imposed on sellers in this market. SHOW and describe what happens in this market. Draw and label any curve shifting and any change in the equilibrium price or equilibrium quantity. What is the new price that buyers pay for peanut butter? What is the price that sellers get to keep (after they pay the per-unit tax to the government)?

2. Consider the labor market that begins in equilibrium. Now the government imposes a minimum wage in this market. [HINT: Do not need to draw any graphs for this question.]

a. What would be the impact on this market if the minimum wage imposed by the government is below the equilibrium wage? DESCRIBE verbally; do not draw.

b. What would be the impact on this market if the minimum wage imposed by the government is above the equilibrium wage? DESCRIBE verbally; do not draw.