1.a A recent research says more than 40 percent of Hong Kong population are either overweight or obese. In order to encourage the adoption of healthy meal, the government decides to subsidize the fruit and vegetables industry. They decide to subsidize the buyers by $7 for every unit of fruit and vegetables they purchase. The demand and supply curves are Qd = 200 ? 4P and Qs = 6P - 30. As a result, the price paid by the buyers will be$[Answer]lower than before the subsidy.(In decimal numbers, with two decimal places, please.)

1.b Thus, the price received by the sellers will be $[Answer]higher than before the subsidy.

(In decimal numbers, with two decimal places, please.)

2.a Suppose a commodity tax is levied on a product. The supply curve is linear and upward sloping and the demand curve is linear and downward sloping. The tax lowers the consumer surplus by $300 and lowers the producer surplus by $200. The deadweight loss is $90. The government tax revenue is $[Answer].

(In decimal numbers, with two decimal places, please.)

2.b Now, suppose we learned that the tax rate is $10 per unit. The equilibrium quantity after the tax must be[Answer].

(In decimal numbers, with two decimal places, please.)

Answer:

2.c Consequently, we conclude that the equilibrium quantity traded before the tax must be[Answer].

(In decimal numbers, with two decimal places, please.)

Answer:

3.a

Consider the following supply and demand schedule of chocolate. Price [$1 Quantity demanded {units} Quantity supplied {units} 9 7' 8 8 7' 9 6 \"HI! 5 11 Suppose initially the chocolate market is in equilibrium. Ifthe government imposes a tax of $20 for each unit of the chocolate sold. the new equilibrium price paid by the consumers will be $[Answer]. {In integers. please}