1.The nominal price of apples is p_A = $1.20/lb, the nominal price of coffee is $2.10/cup, and Peter makes $215/week income. Calculate the relative price of a cup coffee and Peter's real income. Make sure you show the correct units for this price and income.

2.In France, good wine is sold at price equivalent to $12/bottle and a lower quality cheap wine is sold at price equivalent to $6/bottle. It costs $10/bottle to ship French wine to British Columbia.

a.Who would you expect to drink more French wine, people in France or people in BC? Explain.

b.Who would you expect to drink on average a higher quality French wine, people in France or people in BC? Explain.

3."The Best Things in Life are Free" is a phrase used a lot. It's found in many speeches, there are numerous articles in magazines and online titled "The Best Things in Life are Free," The Best Things in Life are Free was a 1956 American musical movie, and "The Best Things in Life are Free" was a 1992 Grammy-nominated song recorded by Luther Vandross and Janet Jackson. Make sense of the statement, "The Best Things in Life are Free" by applying what you have learned about the marginal and total values.