Need help - Principles of Microeconomics

Hand-written answers and/or hand- drawn graphs will not be graded. Any answer without clear and precise explanation will not receive any credit.

Question 1. 

[25 points] Suppose the market for cigarettes is characterized by the following information:

Qd=70–5P [Demand] Qs =3P–10 [Supply]

Suppose the government imposes a sales tax of $2 per unit. Calculate the Dead-Weight- Loss due to the sales tax.

[Note: P = price per unit; Qd = thousands of units demanded; Qs = thousands of units supplied]

Question2.

[25points]SupposethemarketforwineintheU.S.ischaracterizedby: Qd = 100 – 20P [Demand]

Qs = 20 + 20P [Supply] The market for wine in the rest of the world is characterized by:

Qd = 80 – 20P [Demand] Qs = 40 + 20P [Supply]

Calculate the deadweight loss if the U.S. imposes a prohibitive tariff per unit of imported wine.

[Note: P = price per unit; Qd = billions of units demanded; Qs = billions of units supplied]