1.With reference to the Supply and Demand curves, what might happen to the equilibrium price and quantity of MacBooks if the price of silicon (which goes into the production of microchips) were to increase; while, at the same time, the price of PC laptops (a substitute for MacBooks) also increased?

2.Explain the role of price as a mechanism for allocating resources in an economy.

3.What would happen if, in order to provide lower cost health care, the government decided to set a price ceiling (Pmax) in the health insurance market?

a.)What is the effect of this maximum price legislation on the market for health insurance?

b.)Briefly explain the situation for both consumers and producers (i.e. health care providers).

c.)What might the government do to achieve their intended aims (i.e. lower costs and increased quantity)?