1. The village of Copsi has 100 identical residents who all love the local drink, Copsi, named after the village. Each resident of Copsi has the following willingness to pay for Copsi: First bottle: $5 Second bottle: $4 Third bottle: $3 Fourth bottle: $2 Fifth bottle: $1 Sixth bottle: $0 The equilibrium price of Copsi is $1.50/bottle. The cost of producing Copsi is $1.50/bottle, no matter how many bottles are produced. To keep things simpler, for all questions assume that Copsi can only be produced and consumed in single bottles. bottles cannot be consumed or produced. a. c. How many bottles of Copsi will each resident consume? b. How much consumer surplus will each resident get? How much economic surplus is created per resident of Copsi? What is total economic surplus? Now, Copsians discover that producing a bottle of Copsi creates $1 worth of pollution. How, if at all, does this affect economic surplus? d. In response, the mayor of Copsi imposes a $1 tax on each bottle of Copsi that consumers purchase (consumers pay the tax). How much Copsi does each resident consume? e. Does the tax increase or reduce economic surplus per resident? f. Consumers of Copsi are outraged that they must pay the tax when, "It's the sellers creating the pollution!" In response, the mayor eliminates the tax on consumers, and replaces it with a $1 tax on Copsi sellers. How does this change your answer to parts d and e? g. Based on your answers, would you support a $1 tax on Copsi (on either the buyers or the sellers)? h. Would you favor a $2 tax on Copsi? Explain. i. Based on your answers, do you favor a carbon tax? Do you favor ANY carbon tax