If you were a government official that wanted to raise the equilibrium price of milk, which of the following actions would you take?
a. Take milk from government storage and sell it.
b. Encourage farmers to produce more milk.
c. Subsidize purchases of dairy equipment.
d. Encourage farmers to produce less milk.
Question 2
If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the equilibrium price of cigarettes will fall. This fall in the equilibrium price can be attributed to a(n):
a. upward movement along the supply curve for cigarettes.
b. rightward shift of the supply curve for cigarettes.
c. upward movement along the demand curve for cigarettes.
d. leftward shift of the supply curve for cigarettes.
Othmer’s Equilibrium Still Schematic Diagram
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