1. Johnson and Johnson (J&J) provides mothers with safe and clinically proven mild baby products. Amongst other products they also provide Listerine products. Due to the lack in sales of the baby products, Johnson and Johnson decided to decrease the production of baby products and increase the production of Listerine. Illustrate on a graph and explain the opportunity cost of producing Listerine products.

2. The market for electricity in Utopia is characterised by the following equations

Qd = 100-5P ; Qs = 50+5P

(a) Using a graph, draw the demand and supply curve of electricity

(b) Suppose the government of Utopia set a maximum price of R2.50 per unit of electricity. Explain and show in the graph drawn in (a) the effect of the government intervention in the electricity market.