Question 1 (1 point)
Suppose that the government imposes a $2 a cup tax on coffee.
a. (0.5 point) How will the quantity of coffee bought in coffee shops change?
b. (0.5 point) Will this tax raise much revenue?Question 2 (1.5 points)
The figure below shows the demand for on-campus housing. The college has 200 rooms to rent. If the college puts a strictly enforced rent ceiling on rooms of $550 a month:
a. (0.5 point) What is the rent?
b. (1 point) How many rooms are rented?
c. (1 point) Is the on-campus housing market efficient? Explain why or why not. Question 3 (1.5 points)
The figure below shows the markets for shoes if there is no trade between the United States and Brazil.
a. (0.5 point)
b. (1 point) With international trade, explain which country would export shoes and how the price of shoes in the importing country and the quantity produced by the importing country would change.
c. (1 point) Explain which country gains from this trade. Question 4 (1 point)
U.S. steelmakers seek antidumping action Steelmakers want the United States to put restrictions on imports from five nations, alleging unfair pricing of steel for the automobile and construction industries. Explain who in the United States gains and who loses from restrictions on steel imports.
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