1. Explain each of the following statements using a supplyanddemand diagram {5 points for explanab'on, 5 points for the diagram for each sub-item]. Why do the shifts in the demand curve} supply curve happen? What is the impact on equilibrium price and output? a. When a war breaks out in the Russia, the price of gasoline rises and the price of used cars decreases. b. Due to the CDVIDl'} pandemic, price of surgical masks increased. c. When a typhoon ravages Central Luzon, the price of rice calces throughout Luzon increases. 2. The train management office reported that metre train ridership declined after a fare increase: "There were nearly four million fewer riders in last month, after the price of each ride increased by 3.5 pesos to 15 pesos in the previous month, a 4.3 percent decline." a. Use these data to compute for the price elasticity of demand for metro train rides. {5 points] b. Interpret the result is it price elasb'c or price inelastic. Why? (5 points} 3. The market for donuts has the following demand and supply schedules: Price Quantity Demanded Quantity Supplied 6 135 26 12 104 53 18 81 81 24 68 98 30 53 110 36 39 121 a. Graph the demand and supply curve. Make sure each curve and the axes are labeled accordingly. (15 points) b. Identify the equilibrium price and equilibrium quantity for this market using the graph in (a). Write your answer here. (5 points) c. If the price in this market were above the equilibrium price, what will the market experience? Illustrate by identifying a price higher than the equilibrium price and explain. (10 points). d. If the price in this market were below the equilibrium price, what will the market experience? Illustrate by identifying a price lower than the equilibrium price and explain. (10 points). e. The health department publishes a study that indicates donuts to be a major contributor to obesity, what will happen to the graph? Use a new graph separate from (a) and illustrate the impact on the market for donuts. Explain. (10 points) 4. The government has decided that the price of sugar is too low. Suppose the government imposes a binding price floor in the sugar market. Draw a supply- and-demand diagram to show the effect of this policy on the price of sugar and quantity of sugar sold in the market. Will there be a surplus or shortage? Explain. (10 points)