1. Mexico s import restrictions on used cars _____ the price of 1998 cars and _____ the price of 1997 cars.
2. In Figure the taxi medallion policy prevents mutually beneficial transactions for consumers on the demand curve between points and _____ and _____ producers on the supply curve between point€™s _____ and _____.

3. In Figure, a consumer who is on the demand curve halfway between points c. and a. would be willing to pay $ _____ for a mile of taxi service, while a supplier who is halfway between points b and a on the supply curve would be willing to supply a mile of taxi service at a price of $ _____.

4. In Figure domestic firms will produce _____ tons of sugar at a price of $0.15, _____ tons at a price of $0.30, and _____ tons at a price of $0.28.

5. Arrow up or down: An import ban _____ the price of sugar, _____ the total (market) quantity of sugar, and _____ the quantity of sugar produced by domestic firms.
6. Compute the Changes. Consider the example of taxi medallions shown in Figure

a. The policy changes consumer surplus from $ _____ to $ _____.
b. The policy changes producer surplus from $ _____ to $ _____.
c. The policy changes the total surplus of the market from $ _____ to $ _____.
d. The deadweight loss is shown by the area of triangle _____, which equals $_____.

Supply with 80 medallions $6.00 $6.00 | surplus 3.60 Supply Supply 3.00 3.00 2.60 3 - -55 Producer Demand surplus Demand 1.00 0,000 0 8,000 10,000 Miles of taxi service per day (A) Market Equilibrium Miles of taxi service per day (B) Taxi Medallions Supply with 80 medallions $6.00 $6.00 | surplus 3.60 Supply Supply 3.00 3.00 2.60 3 - -55 Producer Demand surplus Demand 1.00 0,000 0 8,000 10,000 Miles of taxi service per day (A) Market Equilibrium Miles of taxi service per day (B) Taxi Medallions 5040 $0.40 U.S. consumer Domestic supply Domestic supply 0.30 0.26 0.26 Total supply 2 (domestic plus U.S producer surplus US. consumer surplas foreign) Foreign producer surpluu Demand Demand 0.03 360 160 Millions of pounds of sugar per day (A) Free Trade with No Domestic Production Millions of pounds of sugar per day (B) Import Ban and Domestic Production Supply with 80 medallions $6.00 $6.00 | surplus 3.60 Supply Supply 3.00 3.00 2.60 3 - -55 Producer Demand surplus Demand 1.00 0,000 0 8,000 10,000 Miles of taxi service per day (A) Market Equilibrium Miles of taxi service per day (B) Taxi Medallions