Section 1 Supply 8; Demand (35 Marks) Q1. Q2. Q3. Consider the feasible frontier for a student and answer the below questions: Feasible Frontier 100 an a Final Exam Mark 40 0 3 6 9 12 Hours of free time per day (a) Currently the student is at point A but intends to improve their nal exam mark by studying more. Calculate the opportunity cost of moving from point A to point B. (b) Explain why the student cannot simply choose point C to improve their exam mark. (c) Calculate the marginal rate of transformation (MRT) for this feasible 'ontier and interpret your answer. Consider the following market information and answer the below questions: D:p=36Q S:p=15+2Q (a) Calculate quantity demanded and quantity supplied if p = 21. (b) Calculate the excess demand based on your answer to a. (0) Calculate equilibrium price and quantity in this market. The demand for coffee is given by the function: Q = 8.5 p 0.2ps +0.1Y, where p is the price of coffee, ,0, is the price of sugar, and Y is consumer income. (3) Calculate quantity demanded given p = 4- , p5 = 2.5 and Y = 20 (b) Hold income, Y = 20, and the price of sugar, p3 = 2.5, constant and derive quantity demand as a function of only the price of coffee (p). (c) The supply of coffee is given by the function: Q = 2 + p, where p is the price of coffee. Based on your answer to b. calculate equilibrium price and quantity for this market. Sketch this market. (C!) Now assume that consumer income increases such that Y = 40. Derive the new demand function and solve for the new equilibrium price and quantity. Add this to your sketch in (c). Page 3 of 5