Question 1 (25 points)What would happen to the equilibrium price and quantity of lattes if thecost to produce steamed milk, which is used to make lattes, increases and scientistsdiscoveredthatlattescauseheartattacks. (Show your answer using graph and provide explanation)

Question2(25points)Newcarsarenormalgoods.Whatwillhappentotheequilibriumpriceofnewcarsifthepriceofgasolinerises, thepriceofsteel(whichisaninputforthecarmanufacturing) falls, public transportation becomes cheaper and more comfortable,auto-workersacceptlowerwages,andautomobileinsurancebecomesmoreexpensive?(Show your answer using graph and provide explanation)

Question 3(25 points)New oak tables are normal goods. What would happen to the equilibriumprice and quantity in the market for oak tables if the price of maple tables roses, theprice of oak wood rises, more buyers enter the market for oak tables, and the price oftheglueusedintheproductionofthenewoaktablesincreased?(Show your answer using graph and provide explanation)

Question4(25points)assumethedemandfunctioninthemarketforshoesisshownwithP=0.5Q^d+4andthesupplyinthismarketisshownwithP=0.5Q^s+2.Findtheequilibriumpriceandquantityinthismarket. (Show your answer using graph and provide explanation)