1. 4. (5 points) Suppose a unique Picasso painting is offered for sale at an auction. What does the supply function look like? (5 points) A few years ago the quantity supplied of domestically produced cheese was 350 thousand tons when the price was 400 rubles per kg. Now the quantity supplied of domestically produced cheese was 420 thousand tons when the price is 500 rubles per kg. Assuming that the supply and demand curves have normal slopes, how can you explain this phenomenon? (5 points) Assume that Joe is willing to produce a hamburger that costs $1 to make. Mary is hungry and is willing to buy a hamburger for $3. What is the efcient thing for them to do? (15 points) CFO Chapter 3, problem 15. Explain whether each of the following statements describes a change in demand or a change in quantity demanded, and specify whether each change represents an increase or a decrease. A. B. F11 Baby Steps Footwear experiences a 40 percent increase in sales of baby shoe during a 3-day, half- price sale. Tabitha gets a promotion and 15 percent increase in her salary and decides to reward herself by purchasing a new 3-D television. C. When the price of peaches unexpectedly rises, many consumers choose to purchase plums instead. D. Due to potential problems with its braking system, Asteroid Motors has experienced a decline in sales of its Galactiea automobile. Antonio, an accountant working for the city of Santa Christina, decides to forego his annual vacation to Hawaii when word leaks out that the city may be cutting all employee's salaries by 10 percent at the end of the year. (4 points) Dene consumer surplus and producer surplus. (4 points) Dene social (total) surplus and deadweight loss