1. Supply and Demand (1) 1.1. Draw the standard supply and demand curves for a market (e.g., boxes of donuts), please find and label the market equilibrium, price, and quantity, why is this point an equilibrium., 1.2. Why are the demand and supply curves move in the direction that they do? What is the economic rationale behind this movement? 1.3. What are the key assumptions required for the above market to generate the largest overall welfare for society? 1.4. How do the key assumptions interact to make sure that the highest social welfare is achieved, 2. Societal welfare (1) 2.1. Suppose now that a market can be represented by the following pare of equations to representing the relationships between the market price and the quantity demanded or supplied Please calculate the producer and consumer surplus that occurs when the market reaches its equilibrium. Also, indicate it on a relevant graph, Qdemaned (P) = 21 - 2P QSupplied (P) = P 2.2. Suppose that the government intervenes in the market and creates a law that says that the maximum price that can be charged is $3.50. Please, calculate the new societal welfare from this law, also indicate how the graph you drew for 2.1 would change as a result, and any change in overall welfare should be labelled.. 2.3. Which outcome, that of 2,1 or 2,2 would the government prefer and why is that (1pt)3. Societal welfare (2) 3.1. Suppose now that a market can be represented by the following pare of equations to representing the relationships between the market price and the quantity demanded or supplied Please calculate the producer and consumer surplus that occurs when the market reaches its equilibrium. Also, indicate it on a relevant graph, Quemaned (P) = 100 - 2P Supplied (P) = 50 + 3P 3.2. Suppose that the government intervenes in the market and creates a law that forces the suppliers to sell a market total of 90units (allowing the price to change accordingly). Please, calculate the new societal welfare from this law, also indicate how the graph you drew for 3.1 would change as a result, and any change in overall welfare should be labelled., 3.3. Do you think the consequences of this policy would be? Would the government be required to further intervene in this market for the policy to be via