1. Many governments control the price of tobacco by creating a price floor. If a government decides to create a price floor for a product, the economy will have a deadweight loss. Draw a supply and demand curve and show how price floor will create deadweight loss. In your diagram show the areas for Consumer Surplus, Producer Surplus, and DeadweightLoss.
2. Government regulations in some countries do not allow Milk price to be more than a certain price. Should we expect product shortage or product surplus in the market? Why? Draw supply and demand graph and show this on the graph.