$1.$ Based on the above table, answer the following;

a$)$ What is the opportunity cost of the first four bottles of mineral water? First eight bottles? First twelve bottles? $(9$ marks$)$

b$)$ Draw the production possibilities frontier. Put bread on the horizontal axis. $(5$ marks$)$

$2.$ Using supply$-$and$-$demand diagrams, show and explain the effects of the following events on the price of CD$-$Rs and the quantity of CD$-$Rs sold. For each event, identify which of the determinants of demand or supply is affected, how it influences demand or supply, and what happens to the equilibrium price and quantity.

a$)$ The price of a CD burner falls. $(7$ marks$)$

b$)$ Producers introduce new cost$-$saving technologies in their CD$-$R production plants.

$(7$ marks$)$

$3.$ Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPod music player. CEO Steve Jobs also unveiled cheaper models of its Touch music player, a touchscreen$-$only device. An $8-$gigabyte version now costs RM$920,$ down from RM$1200.$ A $32-$gigabyte model costs RM$1600,$ down from RM$2000.$ Calculate the price elasticity of demand for a $32$ gigabyte Touch player if the quantity demanded increases from $850,000$ to $950,000$ the month after the price decrease. What is the right price to charge for $32-$gigabyte model so that the total revenue is maximized? $(10$ marks$)$