2. Price controls in the Florida orange market The following graph shows the annual market for Michigan blueberries, which are sold in units of 50-pound boxes. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.Graph Input Tool ? 50 Market for Michigan Blueberries 45 Supply Price 20 40 (Dollars per box) Quantity 420 Quantity Supplied 280 35 Demanded (Millions of boxes) (Millions of boxes) 30 25 PRICE (Dollars per box) 20 15 Demand 10 5 0 0 70 140 210 280 350 420 490 560 630 700 QUANTITY (Millions of boxes)In this market, the equilibrium price is $ per box, and the equilibrium quantity of blueberries is million boxes. For each of the prices listed in the following table, determine the quantity of blueberries demanded, the quantity of blueberries supplied, and the direction of pressure exerted on prices in the absence of any price controls. Price Quantity Demanded Quantity Supplied (Dollars per box) (Millions of boxes) (Millions of boxes) Pressure on Prices 20 30 True or False: A price ceiling above $25 per box is a binding price ceiling in this market. O True O FalseBecause it takes six to eight years before newly planted blueberry plants reach full production, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant blueberries on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of blueberries is much more price sensitive than the short-run supply of blueberries. Assuming that the long-run demand for blueberries is the same as the short-run demand, you would expect a binding price ceiling to result in a that is in the long run than in the short run.4. Minimum wage legislation The following graph gives the labor market for the fast-food industry of the imaginary city of Combopolis. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.Graph Input Tool ? 20 Market for Labor in the Fast Food Industry 18 Supply I Wage 8 16 (Dollars per hour) Labor Demanded 480 Labor Supplied 320 14 (Hundreds of (Hundreds of workers) workers) 12 10 WAGE (Dollars per hour) CO 6 Demand 4 NO O 0 80 160 240 320 400 480 560 640 720 800 LABOR (Hundreds of workers)In this market, the equilibrium wage is $ per hour, and the equilibrium quantity of labor is hundred workers. Suppose the mayor of Combopolis introduces a legal minimum wage of $8 per hour. This type of price control is called a For each of the wages listed in the following table, determine the quantity of labor demanded, the quantity of labor supplied, and the direction of pressure exerted on wages in the absence of any price controls. Wage Labor Demanded Labor Supplied (Dollars per hour) (Hundreds of workers) (Hundreds of workers) Pressure on Wages 14 6True or False: A minimum wage above $10 per hour is a binding minimum wage in this labor market. O True O Falsequota price floor tax price ceiling5. Calculating tax incidence Suppose that the local government of Corpus Christi decides to institute a tax on cider producers. Before the tax, 25,000 cases of cider were sold every week at a price of $10 per case. After the tax, 18,000 cases of cider are sold every week; consumers pay $14 per case, and producers receive $8 per case (after paying the tax). The amount of the tax on a case of cider is $ per case. Of this amount, the burden that falls on consumers is $ per case, and the burden that falls on producers is $ per case. True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers. O True O False6. Who should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 250. Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.Graph Input Tool ? 20 Market for Laboratory Aides 18 Wage 4 16 (Dollars per hour) Supply Labor Demanded 625 Labor Supplied 0 14 (Number of workers) (Number of workers) 12 10 Demand Shifter Supply Shifter WAGE (Dollars per hour) CO Demand Tax Levied on 0 Tax Levied on Employers Workers 0 (Dollars per hour) (Dollars per hour) -A N 0 0 50 100 150 200 250 300 350 400 450 500 LABOR (Number of workers)For each of the proposals, use the previous graph to determine the new number of laboratory aides hired. Then compute the after-tax amount paid by employers (that is, the wage paid to workers plus any taxes collected from the employers) and the after-tax amount earned by laboratory aides (that is, the wage received by workers minus any taxes collected from the workers). After-Tax Wage Paid by After-Tax Wage Received by Tax Proposal Quantity Hired Employers Workers Levied on Levied on (Number of (Dollars per hour) (Dollars per hour) Employers Workers workers) (Dollars per hour) (Dollars per hour) 0 NO 2Suppose the government doesn't want to discourage employers from hiring laboratory aides and, therefore, wants to minimize the share of the tax paid by the employers. Of the three tax proposals, which is best for accomplishing this goal? The proposal in which the entire tax is collected from workers O The proposal in which the tax is collected from each side evenly O The proposal in which the tax is collected from employers O None of the proposals is better than the others200 180 160 Demand Supply 140 120 100 PRICE (Dollars per case) Tax Wedge 80 60 40 20 0 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Cases of craft beer)Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay Price Sellers Receive (Cases of craft beer) (Dollars per case) (Dollars per case) Before Tax After Tax Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden ( Dollars per case) Elasticity Buyers Sellers The tax burden falls more heavily on the side of the market that is elastic