1.Explain clearly what happens to the equilibrium price and quantity [increase, decrease, or indeterminant] of a product when both consumers and suppliers expect the price of the product to go up in the near future.

2.Suppose the harvest of corn increases significantly. Would corn farmers wish demand for corn was inelastic or elastic? You must explain.

3,

(a) Suppose the supply of milk and the demand for milk are given by: Qs = 6P and Qd = 50 - 4P, respectively. (P is price.) Calculate consumer surplus and producer surplus at equilibrium.

(b) Suppose the government imposes a price floor that is above the equilibrium price. Would the surplus caused by the price floor be greater if the demand for this good were relatively elastic or if it were relatively inelastic? Explain.