1. Show in a graph, one for each question, what will happen (if anything) in the market for coffee when each of the following happens. Then explain in one sentence.

a. the price of coffee falls b. the price of tea falls c. incomes fall d. a new study finds that moderate coffee consumption reduces the probability of certain cancers e. the price of highway tolls increases

2. The following equations are the market demand and supply schedules before the imposition of a per-unit tax. Good X Qs = 2P Qd = 20 Good Y Qs = 2P Qd = 10 - P Assume there is an imposition of a $2 per unit tax on producers. Graph the supply and demand curves before and after the tax, for each good. Show what happens to the market price and quantity in each case. Then, on each graph, carefully shade in the tax incidence for producers and consumers.