1. Consumer and producer surplus (12) a. Ann and Bob are ordering tacos. Each taco costs $3. Ann's willingness to pay for the first two is $5, for the third it is $3, and for every additional one it is $1. Bob's willingness to pay is $7 for the first one and decreases by $1 for each additional one. How many tacos should Ann and Bob order? What is going to be their consumer surplus? (3 3) b. Charlie puts up his car for sale for $10000, but he is willing to accept as low as $7500. Dan would be willing to pay $9000, while Eric offers $7500. Who is Charlie going to sell his car to? How much is the consumer, the producer, and the total surplus associated with the sale? (2 4) 2. Welfare (18) a. Consider the market for allergy medicine. The demand for allergy medicine is represented by the function Q=1000-20P and the supply is given by P=5 0.1Q. Graph the two functions and find the equilibrium price and quantity. (5) b. Mark the areas representing consumer and producer surplus in the graph! (2)\