1. Peter Parker is a freelance photographer at a local newspaper. He currently earns $10,000 per year. He received a job offer from a national newspaper to work as a full-time reporter with salary as much as twice his current earning. However, Mary-Jane Watson suggests him to open his own business, a Spider Man memorabilia shop. To start the business, he needs to withdrawn all of his saving in the bank (he has a $100,000 saving with 5% interest). The bank offers him to invest in a corporate bond with a 7% coupon rate per annum. The expected annual revenue of the shop is $50,000 with the total cost of $30,000. In the second year of the business, the revenue and total cost will increase by 50% and 20% respectively. a. Using a one-year projection, should Peter start his own business? Explain your answer! b. Using a two-years projection, should Peter start his own business? Explain your answer! (Note: the concept of time value of money is inapplicable) Hint: use the concept of opportunity cost 2. You're given the following demand and supply tables: Demand Supply P D Dz D3 P S Sz S $30 20 5 10 $30 0 4 || 40 15 3 7 40 0 8 17 50 10 0 5 50 10 12 18 60 5 0 0 60 10 15 20 a. Draw the market demand and market supply curves b. What excess supply/demand is at price $30? Price $60? C. Label equilibrium price and quantity.