1. If a demand curve is perfectly elastic and consumers buy 1,000 units of the good at a price of $6, how many units will be purchased if the price increases to $8?

2. If a demand curve is perfectly inelastic and consumers buy 1,000 units of the good at a price of $6, how many units will be purchased if the price increases to $8?

3. Explain why allowing the producer to choose his inputs (amount of labor, capital, land, etc.) allows him to affect the shape/size of the PPF, which we previously had assumed was his immutable production limitation.

4. Explain how the producer and consumer problems are related to each other. You should start by stating what both problems are. Your explanation should include the commonality between them and an emphasis on why the producer is so intent on his maximization.