1. The state of California has recently been experiencing high electricity prices. The government has yet to intervene in the market. Therefore, the Demand curve intersects the Price axis at $12. The Supply Curve intersects the Price Axis at $0. Equilibrium Price is $4 and Equilibrium Quantity is 5,500. a. Draw a representative market.' Make sure to label all pieces. b. Calculate Consumer Surplus (without a price ceiling) c. Calculate Producer Surplus (without a price ceiling.) d. To combat high energy prices, the Governor of California wants to regulate electricity with price ceilings. Examine the effect of a price ceiling on electricity. e. What is a price ceiling? If the price ceiling is set at $2. Quantity demanded is 8,000 units and there is a shortage of 5,725 units. What is Quantity supplied? f. Draw and Calculate Consumer Surplus (with the price ceiling.) g. Draw and Calculate Producer Surplus (with the price ceiling.) h. Draw the Deadweight loss. What does this represent? 2. Briefly explain what is meant by the term "externality" and how it occurs. a. What are the two types of externalities? b. How does government fix both of these issues? C. Is government intervention necessary? Why or why not