1) The estimated global supply function for coffee is Q = 9 + 0.5p. The estimated demand function is Q = 8.5 - p + 0.1 Y, where Y is the average income in thousand of dollars. The initial income is Y = 35 ($35.000). Determine :

a. The initial equilibrium price of coffee.

b. The initial equilibrium quantity of coffee.

c. Determine how the equilibrium price and quantity change if the average income increases by 15 to Y = 50.

d. Provide the graph or diagram before and after the change in income (in a graph).

2)A government rations water, setting a quota on how much a customer can purchase. If a consumer can afford to buy 12 thousand gallons a month but the government restricts purchases to no than 10 thousand gallons a month,

a. How does the customer's opportunity set change?

b. Provide your answer with a graph or diagram.