1. Price($)Quantity Demanded Quantity Supplied

0 21 0

1 18 4

2 15 8

3 12 12

4 9 16

5 6 20

6 3 24

7 0 28

If the government set a price floor at $4.00, would there be a shortage or surplus, and how large would be the shortage/surplus.Explain your solution and answer using complete sentences.

2 The demand for toilet paper is less elastic than the demand for candy.Would a tax on toilet paper or candy have a larger deadweight loss? Explain using complete sentences.

3 In today's real estate market the supply of housing has fallen due to a shortage of building materials while the demand for housing has increased due to extremely low interest rates.Explain using complete sentences how this affects the housing market.In your explanation be sure to explain what will happen to both the quantity of housing sold and the price of housing.

4 Using the Laffer Curve, explain using complete sentences why an increase in a tax rate may or may not increase the revenue collected from the tax.

5 Explain using complete sentences why Congress cannot necessarily distribute the burden of a FICA Tax.

6 Explain using the concepts of absolute and comparative advantage why Lebron James should not wash his own car.

7 Explain using complete sentences why equity and efficiency are trade-offs.