Answer the following:

1) Comparative Statics: Consider the market for taxi sentice in San Francisco. Explain how the following events will affect the equilibrium (Q', P\") in the taxi market. Consider each case separately. Use supply and demand curves to defend your answer graphically. a) Bus Fares increase after a strike by bus drivers. b) Taxi drivers must pass a competency test, and one-third fail. c) The price of a taxi permit increases and consumer income increases. Assume that taxi service is a normal good. Show each event on separate graphs. After you perform comparative statics for each graph, determine the overall net effect on P5\" and Q*. Note, if you get conflicting results, e.g. Price increases and decreases, then the net result is indeterminate. d) Half the downtown parking lots are converted to ofce buildings. 2) Comparative Statics: Consider the market for Patriot T~Shires. What will happen to the equilibrium price and quantity if the Patriots win the Super Bowl on Sunday and the price of cotton increases? After you perform comparative statics for each graph, determine the overall net effect on P* and Q*. Note, if you get conicting results, e.g. Price increases and decreases, then the net result is indeterminate. 3) Read the article entitled \"Cheap gas makes suburban houses more valuable.\" You can nd the article on Canvas. After reading the article. Explain how cheap gas can affect the suburban housing market. Use a graph to show how cheap gas affects the suburban housing market. 4) The following equations represent the market for air travel between the United States and Europe. Use the equations to answer the following questions. QDI = 160.000 200.D Q"; = 5001' 1000 a) Find the price intercept for both the supply and demand curves. b) Find the equilibrium price and quantity for air travel between the United States and Europe. c) Show the price intercepts and equilibrium graphically. cl) Calculate consumer surplus and shade in the area on the graph above. e) Calculate producer surplus and shade in the area on the graph above