1. Mr. Em Dente consumes a drink made from fermented honey and water or \"mead\2. Below is a table of reservation prices for apartments taken from the first Chapter. Person=A B C D E. F G H Price , 25, 30, 35 10.18 15. 5 A) If the balanced rent for an apartment turns out to be $20.00, how many consumers will have an apartment? b) If the breakeven rent for an apartment turns out to be $20.00, what is the net consumer surplus generated in this market for person A? C) For person B? D) If the equilibrium income is $20.00, what is the total net consumer surplus generated in the market? E) rent declines to $19, by how much does the net surplus increase? 3. Explain the difference between the compensating variation and the equivalent variation. 4. An individual has a utility function equal to U = x/xl + x2, a) What would be the tangency condition expressed in terms of pricesl _ _ 1 60' . 5\" _ _ of both goods? meta. 6x1 - ml y M - 1 ) b) What would be the optimal quantity of the good1 expressed in terms of input prices? c) What would be the optimal quantity of good 2 expressed in terms of input prices and consumer income? (1) What would be the optimal quantity of each of the goods if the consumer's income is $2 0, the price of good 1 is $1, and the price of good 2 is $2? e) What would be the optimal quantity of each of the goods if the consumer's income is $2 0, the price of good 1 is $2, and the price of good 2 is $2? 0 Show that when the price of good 1 incneases from $1 to $2, the compensating variation and the equivalent variation are equal. 5.Karl Wis willing to produce a quantity given by q = p 20 chairs at price, p>40. At prices below 40, it will not produce anything. a) If the price of the chairs is $100, Karl will produce chairs. b) At this price, how much is its producer surplus? 6.The number of bottles of W demanded annually is given by: Q51 = 1,000,000 60,000 p=,while your offer is given by: gs: 40,000 p. a) Determine the equilibrium quantity and price. b) If the government imposes a tax of $5 per bottle. 1) What is the new price that consumers will pay? ii) What is the new price that producers will receive? iii) What will be the new equilibrium quantity