1.5. Suppose that the government restricts the number of dairy farmers, which results in the supply curve for milk shifting to the left. Briefly explain whether each of the following will increase or decrease. a. Consumer surplus b. Producer surplus c. Economic surplus Using a demand and supply graph, illustrate your answer in each case. 1.8. The following figure illustrates the market for a cancer-fighting drug, without which cancer patients cannot survive. What is the consumer surplus in this market? How does it differ from the consumer surplus in the markets you have studied up to this point?2.6 Using the following graph, explain why economic surplus would be smaller if Q1 or Q3 were the quantity produced than if Q2 is the quantity produced. 3.5. The following figure illustrates the market for apples in which the government has imposed a price floor of $10 per crate. a. How many crates of apples will be sold after the price floor has been imposed? b. Will there be a shortage or a surplus? If there is a shortage or a surplus, how large will it be? c. Will apple producers benefit from the price floor? If so, explain how they will benefit.3.6. Use the information on the market for oranges in the following table to answer the following questions. PRICE (PER CRATE) QUANTITY DEMANDED (MILLIONS OF CRATES PER YEAR) QUANTITY SUPPLIED (MILLIONS OF CRATES PER YEAR) $10 120 20 15 110 60 20 100 100 25 90 140 30 80 180 35 70 220 a. Determine the equilibrium price and quantity. How much revenue do orange producers receive when the market is in equilibrium? Draw a graph showing the market equilibrium and the area representing the revenue received by orange producers. b. Suppose the government decides to impose a price floor of $30 per crate. Now how many crates of oranges will consumers purchase? How much revenue will orange producers receive? Assume that the government does not purchase any surplus oranges. On your graph from part (a), show the price floor, the change in the quantity of oranges purchased and the revenue received by orange producers after the price floor is imposed. c. Suppose the government imposes a price floor of $30 per crate and purchases any surplus oranges from producers. Now how much revenue will orange producers receive? How much will the government spend purchasing surplus oranges? On your graph from part (a), show the area representing the amount the government spends to purchase the surplus oranges. 3.7. Suppose that the government sets a price floor for milk that is above the competitive equilibrium price. a. Draw a graph showing this situation. Make sure that your graph shows the competitive equilibrium price, the price floor, the quantity that would be sold in competitive equilibrium and the quantity that is sold with the price floor. b. Compare the economic surplus in this market when there is a price floor and when there is no price floor. 4.1. What is meant by tax incidence? 4.3. Does who is legally responsible for paying a taxbuyers or sellersmake a difference in the amount of tax each pays? Briefly explain