16 Supply and Demand of Coffee 14 12- 10 and 8 6 4 N 0 0 N 4 6 8 10 12 14 16 Thousands (Quanity)Which color is the demand curve ? 2. Which color is the supply curve? 3. At what price is market equilibrium? 4. At what quantity is market equilibrium? 5. If there was a change in the price of coffee, would that shift the curve for consumers? Yes or no? 6. If there was a change in the price of coffee, would that shift the curve for suppliers? Yes or no? 7. Give one example of something that would shift a demand curve: 8. Give one example of something that would shift a supply curve: 9. Let's assume the government requires coffee to be sold for $12 a pound. Would that be (circle one) a price ceiling or a price floor? 10. Using the scenario in question 9, how many pounds of coffee would be sold at market? 11. Would that create a shortage or a surplus? 12. Let's assume the government requires coffee to be sold for $4 a pound. Would that be (circle one) a price ceiling or a price floor?13. Using the scenario in question 12, how many pounds of coffee would be sold at market? 14. Would that create a shortage or a surplus? 15. A progressive tax is one in which: (circle one) a. the average tax rate decreases as the tax base increases. b. the average tax rate remains constant as the tax base increases. c. the average tax rate rises as the tax base increases. 16. For the tax burden to fall mostly on buyers rather than sellers, the product should be one in which the quantity supplied is very responsive to price but quantity demanded is less responsive to price. This means that: (circle one) a. consumers have few substitutes for the good b. sellers have few substitutes for the good C. consumers have little interest in the product d. the product is too high priced17. There is a Transient Occupancy Tax of about 10% in San Diego. This means that people who stay in a hotel in San Diego pay an additional 10% of the price of a room as tax. Assume most people who come to San Diego are on vacation and have a choice of many different cities to go to. The tax incidence will fall mainly on: a. the hotels b. the tourists c. other nearby cities, such as Los Angeles d. the tax incidence will be shared equallyP D with 4x S P with lar Magnitude of Lump Sum Tax pwithout tax Wing lax S with tas Q without tax Q Q Answer the following questions using the above graph: 18. Was the tax above placed on (circle one) the buyer or the seller? 19. The tax incidence is likely to fall on which (circle one), the buyer or seller? 20. A student has $1000 to buy a laptop but due to sales tax only can afford a laptop that is $900. That is loss is called the in economics