1. A nation has a Gini coefficient of 0. 72 a. Draw a correctly labeled Lorenz curve graph that shows this information. Your graph should have the correct axes, line of equality, curve shape, and approximated area sizes. (2 pts) b. Explain how to calculate the Gini coefficient using a Lorenz curve. You may use labels on your graph in part a to help explain. (2 pts) C. Explain why the majority of the people in this nation will have incomes less than the average income. (1 pt) 2. Assume that the production of art promotes happiness and well-being for all members of society a. State whether the production and consumption create a positive or negative externality. (1 pt) b. In a fully labeled Marginal Private Cost/ Marginal Private Benefit graph, show i . The market quantity and price for art, labeled QM and PM. (2 pts) ii. The deadweight loss society experiences at the market price. (2 pts) C . Assume that economists monetize the benefit to society of a piece of art. On the same graph as part b above, show i. The marginal benefit curve to society, labeled MBs. (1 pt) ii. The socially optimal price and quantity for art sales, labeled Ps and Qs . (2 pts) d. From an economist's point of view, explain why it would be preferable to impose a correctly calculated subsidy on art, rather than allowing the market determined outcome (2 pts)