For the following, look at the market for avocados. Diagram the market and assess the impact of any change on the market clearing price and quantity and diagram the impact upon well-being (Consumer Surplus, Producer Surplus, Government, and total surplus). Consider each question separately (i.e. don’t build on your answer from #1 in #2).

1). Discovering that avocados are high in nicotine, members of the city council place a tax on avocados to deter their use as a gateway to full on nicotine addiction.
2). In an effort to protect consumers, members of the city council require you to obtain a license to make guacamole. This license requires you to pass an test and in order to sit for the test you have to have a bachelors degree and have completed 150 college credits.
3). In a fit of excitement about the supposed health benefits of avocados, the government enacts a subsidy that defrays 50% of the purchase price of avocados for consumers.
4). Biologists announce that the boll weevil has begun to destroy avocado buds as well as cotton bolls. There is also a binding price ceiling upon avocados at the current market clearing price.
5). In 2019, the city of Seattle increased the minimum wage to $15/hour. Many people argued that this was insufficient and that the minimum wage should be set higher, say $25. Your task is to assess the impact of a minimum wage of $25/hour in the Seattle labor market.

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1 Discovering that avocados are high in nicotine members of the city council place a tax on avocados to deter their use as a gateway to full on nicotine addiction The impact of the tax on avocados wil... View the full answer