1)Using the demand function Q = 8.56 - p - 0.3ps + 0.1Y and supply function Q = 9.6 + 0.5p - 0.2pc, determine the amount of any excess demand or excess supply at a price of $4 and explain the mechanism that would cause the equilibrium price to be ?

2)Using supply-and-demand diagrams, illustrate and explain the effect of an outward shift in the demand curve on price and quantity if a. The supply curve is horizontal. b. The supply curve is vertical. c. The supply curve is upward sloping.

4.2 Use supply-and-demand diagrams to illustrate the qualitative effect of the following possible shocks on the world coffee market. a. A new study shows significant health benefits from drinking coffee. b. An important new use for cocoa is discovered. c. A recession causes a decline in per capita income. d. A new coffee plant that allows for much greater output or yield without increasing cost is introduced into the market.