1.Draw a normal supply and demand model for a normal good. Draw the demand curve to be relativelymore inelasticcompared to the supply curve. Here's the scenario: The government decides to tax the producers.

Question 1: Which curve shifted due to the tax?

Question 2: Given this scenario, which group had more of the tax burden?

Group of answer choices

Answer 1: The supply curve shifted inward. Answer 2: The producer surplus had more of the tax burden.

Answer 1: The supply curve shifted outward. Answer 2: The producer surplus had more of the tax burden.

Answer 1: The demand curve shifted inward. Answer 2: The consumer surplus had more of the tax burden.

Answer 1: The supply curve shifted outward. Answer 2: The consumer surplus had more of the tax burden.

Answer 1: The supply curve shifted inward. Answer 2: The consumer surplus had more of the tax burden.

Answer 1: The demand curve shifted outward. Answer 2: The producer surplus had more of the tax burden.

Answer 1: The demand curve shifted inward. Answer 2: The producer surplus had more of the tax burden.

Answer 1: The demand curve shifted outward. Answer 2: The consumer surplus had more of the tax burden.

2.Bananas

The wholesale cost of theworld's most popular fruit(Links to an external site.)

went bananas in the early part of this year.

The price that stores paid for bananas hit a record high in the first quarter, pressured by limited supplies in Central and South America, which produce most bananas sold in the U.S.

Floods, cooler temperatures and mudslides in countries including Costa Rica and Guatemala have hurt banana-crop yields in recent months. A strike among banana-plantation workers in Honduras that lasted several weeks at the start of the year also affected production, delaying growing schedules and harvesting of the fruit.

Wholesale banana prices in the U.S.rose 15.5% in the first two months of 2018 to around $0.577 a pound, an all-time high, according to data from the World Bank, after the weather phenomenon known as La Nia upended weather patterns. The price fell somewhat in March as supplies to the U.S. improved but are still up 8.4% from a year ago.

Bananas are the most widely eaten fresh fruit in the U.S., and many retailers have been loath to pass their higher costs on to shoppers. For many supermarkets and other stores, bananas drive trips to the store because they are an item that most people go out to purchase rather than buy online. Most large retailers sell bananas at a slim margin or sometimes no price markup, which means higher wholesale prices are likely hurting returns for sellers that haven't locked in prices with long-term contracts.

"I go to competitors regularly, and no one has moved on retail prices," said Jeff Cady, director of produce and floral at supermarket chain Tops Friendly Markets, which has stores in upstate New York and neighboring states. "I'd love to go up, but we just can't," he said, referring to prices. He also said that limited supplies have meant Tops is shipping out fruit from its warehouses that has spent four days ripening as opposed to the usual five days.

Exacerbating the issue, according to producers, is that Americans tend to eat more bananas at this time of the year because many other fruits are less available and more expensive during the cooler months.

Americans consume an average of 11.4 pounds of bananas each year, according to the U.S. Department of Agriculture, beating out both oranges and apples as the most popular fresh fruit. Bananas are consistentlyWalmart(Links to an external site.)

'stop-selling product.

Longer term, exportable bananas are under threat of extinction from a fungal disease. But so far plantations in Central and South America remain free of the disease.

In late February and again in mid-March, average retail prices in the U.S. reached $0.57 a pound, a level not seen since December 2016, according to USDA data. Retail prices have inched up 2.3% this year, holding largely steady relative to wholesale prices.

Bananas were one of the items that Whole Foods Market Inc. slashed prices on late last year after the grocer was bought byAmazon.com(Links to an external site.)

Inc.The company declined to comment on its current prices: Some of its stores are selling bananas at 20 cents each or $0.49 a pound.

Patrick Galleher, chief executive of SweetFrog, a chain of stores selling frozen yogurt, said he has noticed about an 8% increase in the wholesale price of the thousands of bananas he has to buy weekly to stock his more than 350 stores across the country. He said his company is absorbing the higher prices and notes that bananas are still one of the cheapest fruit toppings.

The weather over the past six months has been affected by La Nia, which occurs when easterly trade winds strengthen, cooling water across the central and eastern Pacific Ocean. That has caused cooler-than-normal conditions and heavy rain in banana-growing regions in Central and South America, which account for around 85% of the world's banana exports.

Banana volumes to the U.S. market were lower than normal in the first quarter, which caused wholesale prices to increase, said a spokesman for Dole Food Co., which sells more than five billion pounds of the fruit globally each year. The spokesman added that volumes are starting to improve.

Frederic Verborg,managerof innovation at Chiquita Brands International Inc., one of the world's largest banana exporters, said that tropical temperatures have normalized and thatsupply and demandshould be back in balance soon.

Don's personal comment - As you can see, per the last paragraph, that managers need to understand how supply and demand work. Now do you see andlovesupply and demand as much as I do?

Question: Bananas are considered to be agricultural products. This type of product is considered to be relatively _____________________________ products on the retail level.

Group of answer choices

unit elastic

elastic

inelastic

3.Hulu is lowering the price for its least expensive subscription plan while raising the cost of its live TV offering, a move that aims to bolster its subscriber numbers while increasing the margins on its most expensive plan.

Hulu's basic planwhich lets users stream TV shows, with ads, but doesn't include live sports and newswill cost $5.99 a month starting Feb. 26, down from $7.99 previously.

The streaming service, whichlast lowered the price of its basic plan in 2010(Links to an external site.)

, decided to further cut the cost after running promotional campaigns last year that discounted the offering to $5.99, according to a person familiar with the matter. Hulu executives noticed an uptick in adoption and retention rates, the person said.

Hulu also decided to raise the price of Hulu + Live TV, which includes limited advertising, by $5 to $44.99 a month. This marks the first time Hulu has raised the price of its live TV offering. Hulu's other tier, which allows users to stream TV without ads, will stay at its current monthly price of $11.99.

The price increase will help the streaming service invest more heavily in original content to compete with competitors likeNetflix Inc.(Links to an external site.)

andAmazon.com(Links to an external site.)

Inc.that are spending billions on programming. Hulu's move comes aftera similar one made by Netflix(Links to an external site.)

last week.

Hulu, which is jointly owned byComcast(Links to an external site.)

Corp.,Walt Disney(Links to an external site.)

Co.,21st Century Fox(Links to an external site.)

Inc.and AT&T's WarnerMedia, is a valuable piece in the global chess match for video streaming supremacy being played by three of the largest media companies in the world.

Comcast's NBCUniversal, Disney and WarnerMedia are all planning to launch direct-to-consumer streaming services, products that would hugely benefit from Hulu's subscriber rolls and its reams of user data.

When Disney's acquisition of 21st Century Fox closes later this year, Disney will add Fox's 30% stake in Hulu to its own holdings, giving it a 60% interest in the streaming service. Comcast has a 30% stake in Hulu, and WarnerMedia holds the remaining 10%.

Fox and News Corp, parent company of The Wall Street Journal, share common ownership.

Hulu, which recently saidit passed 25 million subscribers(Links to an external site.)

, is betting that a lower-priced basic offering will draw additional users for the company's fast-growing advertising business. The company said its advertising revenue increased more than 45% in 2018 to $1.5 billion, a company record.

Netflix last week said it would begincharging users more for each of its plans(Links to an external site.)

. The company's most popular service, which allows users to stream on two screens at the same time, increased to $13 a month from $11. Its least expensive plan increased one dollar to $9 a month.

Let's say that the basic plan is geared towards customers who are relatively elastic in their consumption habits. Toincrease total revenuederived from this customer base then the quantity demanded after must _________________

Group of answer choices

decrease by more than 25%

increase by more than 25%

not change at all.

4.Restaurant

Restaurant diners are footing the bill for rising minimum wages.

In lieu of steep menu price increases, many independent and regional chain restaurants in states including Arizona, California, Colorado and New York are adding surcharges of 3% to 4% to help offset rising labor costs. Industry analysts expect the practice to become widespreadas more cities and states increase minimum wages(Links to an external site.)

.

"It's the emerging new norm," saidSharokina Shams,spokeswoman for the California Restaurant Association. She said California restaurants are adding surcharges as the state lifts the minimum wage every year until it reaches $15 an hour by 2023. It is currently at $10.50 an hour for employers with 26 or more workers.

The federal government hasn't raised the minimum wage of $7.25 an hour since 2009, putting pressure on cities and states to boost wages locally to keep up with rising living costs. The effective minimum wage has increased in 27 states and Washington, D.C., since January 2014.

Many restaurant owners say they have added surcharges because jacking up menu prices can turn off customers who aresensitive to how much a sandwich or bowl of soup should cost(Links to an external site.)

. When prices do rise, "consumers often trade down in the types of menu items they order, choosing a sandwich instead of an entree, or they leave off beverages or dessert," saidBonnie Riggs,restaurant analyst for NPD Group Inc.

As it was, the average customer check at casual-dining restaurants, which doesn't include surcharges, rose to $14.70 last year, up nearly 11% from 2012, according to NPD.

While adding a surcharge risks turning diners away, some restaurateurs say they want customers to understand the consequences of higher wages on a business with profit margins of generally between 2% and 6%.

New York is the rare city that doesn't allow such administrative fees due to a decades-old consumer protection law. The New York State Restaurant Association is lobbying officials in New York City to legalize restaurant surcharges after the minimum wage for most workers in the city increased this year by 50 cents to $11 an hour and rose to $12 an hour for fast-food workers.

Lawmakers approved a measure in 2016 setting a $15-an-hour minimum wage in New York City by 2019, and putting the rest of the state on a path to eventually reach that level. Some restaurants in other parts of the state have already added surcharges.

In San Francisco, most restaurants have added surcharges in recent years since the city in 2009 required businesses with 20 or more employees to help pay health-care costs, said the Golden Gate Restaurant Association.Gwyneth Borden,the association's executive director, said surcharges have benefited workers because customers tend to tip off the total bill rather than the food price. "Servers are raking in more money," she said.

After San Diego raised its minimum wage by a dollar an hour to $11.50 on Jan. 1, many restaurants added surcharges to their checks. Some failed to notify customers the surcharge was coming, or erroneously called it a "California mandate."

"It was their way of speaking out politically about something they didn't agree with," said San Diego City AttorneyMara Elliott.Her office received formal customer complaints involving more than two dozen restaurants.

Sami Ladekiadded surcharges to the menu at six Sammy's Woodfired Pizza & Grill restaurants in San Diego and eight more across California. He said it was a mistake to call the charge a state mandate, and has changed the wording. But he remains critical of rising minimum wages.

"This is not sustainable," said Mr. Ladeki, who says he makes a profit of around 1% charging $12 to $14 a pizza. "People are not going to pay $15 or $20 for a pizza."

Jamie Hampton,37 years old, walked out San Diego's BO-beau kitchen + bar in January after seeing a notice about the surcharge. She and her boyfriend chose a restaurant across the street that didn't charge one.

"I think they were just making a political statement," said Ms. Hampton, who voted for the minimum-wage increase and said she was personally offended that the restaurant blamed the wage increase for higher prices.

David Cohn,who owns 15 restaurants in San Diego, including BO-beau, said his 3% surcharge wasn't a stunt.

"We want people to understand there is a cost," Mr. Cohn said. "How do we stay in business with margins shrinking and competition increasing?"

This is to see if the student can reflect on the different types of government intervention?

This is to see if the student understands what will happen to the cost structure for the firm if a price control is employed?

This is to see if the student can predict what could happen to the price of the products being charged to the customers?

Per the article, due to the ________________ some restaurants are able to pass off the additional cost to the _____________________.

Group of answer choices

Price floor; consumer

Price floor; waiters

Price ceiling; consumers

Price ceiling; waiters