On September 14th, 2023, the Canadian government threatened major grocers(Loblaws, Costco, Walmart, etc.) with new taxes if they failed to lower their foodprices.1Assume that the government imposes such taxes. Using a supply and demand diagram,show what effect this has on the equilibrium in the market for food. Does this help tolower food prices?If you were in charge of the government, how would you reduce food prices for Canadianconsumers?

The government has decided that the free-market price of cheese is too low. Suppose the government imposes a binding price floor in the cheese market. Draw a supply-and-demand diagram to show the effect of this policy on the price of cheese and the quantity of cheese sold. Is there a shortage or surplus of cheese?

Supply and Demand

1. The government mandates that the minimum price of the textbooks hold above the equilibrium price level, i.e. the government imposes a price floor. How does this government mandated price floor impact the price and quantity of books? WHY?

The government mandates that the price of textbooks be held below the equilibrium price level, i.e. the government imposes a price ceiling. How does this government mandated price impact the price and quantity of books? WHY? What do you call this type of market price or price condition?

What have been the implications of the strong growth in house prices for Canadian households and the financial system?

The Government is concerned with promoting the stability of the Canadian housing market, financial system, and economy over the long-term. What policies, if any, could the government pursue to promote these goals? The essay should include policy initiatives or ideas that the government could contemplate, with pros and cons associated with each option. What would you recommend and why?