Question: 1. Using a supply and demand framework, explain the effect on the market when the government makes a good illegal. Which curve shifts and what


1. Using a supply and demand framework, explain the effect on the market when the government makes a good illegal. Which curve shifts and what is the impact on the equilibrium price and quantity of the good. 2. Consider your results to the equilibrium from Question 1, what is an unintended consequence of the change in the equilibrium in the market? 3. The Federal government taxes alcohol based on its proof per gallon, 80 proof is 40% pure alcohol, beer is about 6 to 10 proof. How would consumption patterns change if the government started taxing alcohol strictly on volume rather than its potency? (Hint: the result is similar as to what occurred during prohibition to consumption patterns) 4. In 2008, Long Island, New York began a "Wall of Shame" where individuals arrested of drunk driving had their photos posted publicly to the police website. Using supply and demand, what impact is this policy intended to have on the market and why? How does this policy avoid the problem created in Question 1, while achieving the same desired results
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