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Demand-Supply Analysis and the American Revolution a. Before the American Revolution, the British government required that all imports to the colonies from outside the British Empire were first shipped to England (part of the Navigation Acts). A Boston business selling French wine, for example, would need to have it shipped from France to England, and then to Boston. Draw a demand-supply diagram for wine imported to the colonies. Illustrate the effect of the import requirement. Show the loss in consumer surplus, and the dead weight loss. Provide an explanation. b. Although a broad generalization, today, Americas are mainly coffee drinkers and the English are mainly tea drinkers. This was not always so. Prior to the American Revolution, more colonists drank tea than coffee. Suppose that after the Revolution, the U.S. government imposed a tax on imported tea. On two demand-supply diagrams, one for tea and the other for coffee in the United States, illustrate the effect of the tea tax on the price and quantity of both tea and coffee. Provide an explanation with your diagrams.
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