Question 3 TABLE 2 shows production possibilities between wheat and ca rs a) If 16 cars are produced, approximately how much wheat is produced? b) If current production is at combination C, what is the cost of 10 more wheat? c) If current production is at combination D, what is the cost of 4 more cars? d) Assume there is a technology change that only affects the car industry. Label this shift PPC2. (Label cars on the vertical axis and wheat on the horizontal axis and label the original production possibility curve PPCl) Question 4 If QD = 40 2P and QS = 10 + 3P, what are the equilibrium values of price and quantity? Please provide a graph with price on the verticai axis and quantity on the horizontal axis showing the equilibrium price and equilibrium quantity. Question 5 a) If QD=1OOSPand QS =10+P, what are the equilibrium prices and quantity? b) If demand increases by 12 and price remains the same as in (a), will there be a shortage or surplus? And by how much? c) If demand increases by 12, what will be the new equilibrium price and quantity? Question 6 Assume the market for peanut butter is initially in equilibrium. a) Draw a demand and supply diagram to illustrate the initial equilibrium. b) Explain and graph the impact on the peanut butter market if there is a decrease in consumer incomes? c) What would occur to the demand for Strawberryjam? (Hint: Jam is either a substitute or compliment) Question 7 Assume the market for gasoline is initially in equilibrium. a) Draw a demand and supply diagram to illustrate the initial equilibrium. b) Explain and graph the impact on the market if there is simultaneously a decrease in population and an increase in business taxes. (Hint: neither demand nor supply dominate) Question 8 Discuss with graph the effect of a: a) price ceiling b) price floor. (Hint: draw supply and demand with a price floor and tell me if the price floor is effective above or below the equilibrium price. Do the same with a price ceiling. Also show on the graph where the equilibrium price and quantity are. Do one graph for a ceiling and one graph with a floor, along with the explanation described above)