Q1) The US market for chocolate bars is impacted by two occurrences: an increase in the price of cocoa and a study released detailing chocolate's health benefits. Which pair represents the correct price and quantity shifts after the market resettles?

1) Price increase, indeterminate quantity change

2) Price decrease, quantity decrease

3) Price decrease, quantity increase

4) Indeterminate price change, indeterminate quantity change

Q2) The government gives a lump-sum subsidy to a monopoly. Describe the effect on profit, quantity produced, and deadweight loss.

1) Profits increase, quantity and deadweight loss remain the same

2) Profits decrease, quantity and deadweight loss remain the same

3) Profits increase, quantity decreases, and deadweight loss increases

4) Profits decrease, quantity increases, and deadweight loss decreases

5) Profits increase, quantity increases, and deadweight loss increases