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Question: disos increases from 8 to 10 if your income is...

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disos increases from $8 to $10 if your income is $12,000 b Calculate your income elasticity of demand as your income increnses from the price is S16 (2) (30 points) Suppose that the demand supply for rice is as follows: The equilibrium price is pE and the equilibrium quantity is QF in free market. (1) What area can represent the consumer surplus and producer surplus? (2) If govemment want to control the r rice price level at Po, what area can represent the consumer surplus and producer surplus in this case? (3) What kind of policies can fulfill this target? Give some specific example. What is the governments surplus in this case. Draw another graph and color this area. 3 Graph (20 points) . Use Demand and supply diagram and draw graphs to explain why the burden of a tax falls more heavily on the side of the market that is less elastic.

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