1. Mark buys an old airplane with the intention of repairing, restoring, and selling it. He anticipates that it will cost him $295,000 to purchase, repair, and restore the plane, and that he can sell the finished plane for $350,000. When he has spent a total of $295,000 on the project, he discovers that he needs to replace the engine. It will cost Mark $100,000 to replace the engine. He can sell the plane without the new engine for $220,000. What should he do? Explain. How much money does Mark make/lose overall on the project? In your answer, refer to the marginal benefits and marginal costs of each option. (4 marks) 2. Chapter 1 of the course textbook lists the ten principles of economics. Find an online news article that relates to one of the principles. Briefly explain how the principle relates to the news article you have chosen. Provide a link to the article, the title of the article, and the news source from which you retrieved the article. (5 marks) 3. City planners have proposed changing one lane on a highway to an electric-only lane in an attempt to reduce carbon emissions and commute times. To drive in this lane, travelers must be driving in an electric vehicle (a) If the electric-only lane is implemented, how may this impact the sales of electric vehicles? Briefly explain. (2 marks) b) Provide two externalities that may result from the implementation of the new electric-only lane. Briefly explain and indicate whether the externality is positive or negative. (6 marks) (c) A local newspaper has written an article regarding the proposed electric-only lane, exclaiming: "City planners should implement an electric-only lane to reduce carbon emissions." Is this an example of a positive or normative statement? Briefly explain. (2 marks) 4. (a) Draw a production possibilities frontier representing the economy's possible production of milk and eggs. Now, show what will happen to the frontier or the production point under each of the following circumstances in parts (b) to (e). Use a separate graph to illustrate each situation. For parts (c), (d), and (e), show your answers relative to the original production possibilities frontier. (2 marks) (b) The outcome for the economy is efficient, with society choosing approximately equal amounts of milk and eggs. (2 marks) (c) A recession causes a significant percentage of the labour force to become unemployed. (2 marks) 'd) Some cows are found to be infected with Mad Cow Disease, and about one-third of the cows must be destroyed. (2 marks) (e) Improvements in animal nutrition raise the general productivity of cows and chickens. (2 marks)