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QUESTION 2 (25 MARKS] 1 The Investment-Savings (IS) and Liquidity Preference - Money Supply (LM) models of a certain 3-sector economy, Y = C + I + G, economy compose the following: LM IS C = 100+0.8Y: Y, = Y-T 1 = 50-251 G=1 = 50 M'=Y-25i.....demand M P = 200..........Supply Derive the IS and LM equations and hence determine the equilibrium levels of income and rate of interest. [5] 2 Grass Cutters CC produces and sells riding lawnmowers. The demand function for the lawnmowers is given as p = -x + 1880 and the cost to produce the lawnmowers is given by the cost function C(x) = 80x +8000. 2.1 Determine the revenue function R(x) (2) 2.2 Express the profit it as a function of x [3] 2.3 Using the vertex method determine the number of lawnmowers that would maximize profit and calculate the maximum profit for Grass Cutters CC. [4]