1. Refer to the materials studied in chapter 5. Assume the following equations define the behaviour of consumers and firms in the economy. I. Utility Function = U(c, 1) II. Consumers Budget Constraint C = WNS + I- T III. Firms Production Function Y = f(K, Nd) IV. Economy's Equilibrium Y = C+G A). Assume capital (K) is exogenously determined and fixed, state the firms profit maximization problem for this economy B) Suppose that there is a natural disaster that destroys part of our hypothetical economy's capital stock. With reference to income and substitution effects, determine the effect of this on: (a) the economy's aggregate output (b) current consumption (c) employment (d) the real wage