Question 1 (10 Marks Total) Consider the following equations of demand and supply that characterize the market for a particular good. P=70-3Q. P=25+2Q, With the aid of a labelled diagram, identify the economic effects if the government sets a legal minimum price for this good, poor= $49. P Q Initial Equilibrium Price_ (1 mark) Initial Equilibrium Quantity (1 mark) Quantity Demanded at Pl_ _(2 marks)Quantity Supplied at P (2 marks) Is there a surplus or a shortage of the good in the market? (1 mark) What is the magnitude of the surplus or shortage? _(1 mark) If the government supports this price floor, what will be the cost to government? (2 marks)Question 2 (10 Marks) Consider the market for a good, where demand and supply are given by the following equations. P=34-Q. P=10+2Q, With the aid of a labelled diagram analyse the economic effects of a $3 per unit tax on this good, charged to consumers. P Q Initial Equilibrium Price (1 mark) Initial Equilbrium Quantity (1 mark) New Equilibrium Quantity_ (1 mark) New Producers' Price (1 mark]New Consumers' (tax included) Price (1 mark) Burden of the Tax on Consumers (2 marks) Burden of the Tax on Producers (2 marks) Tax Revenue to the Government _(1 mark)Question 3 (10 marks) Consider the market for a good, where domestic demand and supply are given by the following equations. P=130-Q4 P=10+2QDOM Suppose that this country enters into a trade agreement with another country, whereby consumers in the foreign country are able to consume this domestically produced good. The demand for the good, by foreign consumers is given by the following equation: P=100-2050 With the aid of a labelled diagram, analyse the economic effects of this trade agreement on the domestic market for the good. P Initial Equilibrium Price (1 mark) Initial Equilbrium Quantity (1 mark) New Equilibrium Price (2 marks) New Equilibrium Quantity (2 marks) New Domestic Production (1 mark) New Domestic Consumption_ (2 marks) Foreign Consumption_ (1 mark)