2. REcoin, a new digital cryptocurrency, has the following demand and supply schedule: Quantity Supplied Price per REcoin Quantity Demanded $60 2 million 16 million $50 3 million 13 million $40 4 million 10 million $30 7 million 7 million $20 12 million 4 million $10 16 million 2 million For each of the questions below, illustrate your answers graphically and label all relevant values. Explain the results. (a) What are the equilibrium price and quantity of REcoin? Briefly explain why this is the equilibrium. Label each point as shown in the schedule above. (6 marks) Project 2 continues on the following page Projects.7 Copyright 2020 by the UBC Real Estate Division Micro Foundations of Real Estate Economics (b) Parliament has voted and determines that it is in the public's interest to regulate the price of all cryptocurrencies. They have imposed a price floor $20 above the equilibrium market price. What is the new market price? How many REcoins are supplied and how many are demanded? Does this result in a shortage, a surplus, or neither? If a shortage or surplus does occur, calculate its size. (6 marks) (c) University students march on Ottawa and demand a reduction in the price of Recoin. An even more concerned Parliament votes to repeal the price floor and impose a price ceiling $30 below the former price floor - from part (b). What is the new market price? How many REcoins are supplied and how many are demanded? Does this result in a shortage, a surplus, or neither? If a shortage or surplus does occur, calculate its size. (4 marks) (d) What would happen if the price ceiling was instead set at $40? How many REcoins are supplied and how many are demanded? Does this result in a shortage, a surplus, or neither? If a shortage or surplus does occur, calculate its size. (4 marks) 3. The following questions are based on the diagram below: Price P A P B 0 D 0 E Q Q Demand Quantity 4. (a) If the price for the product shown is P, how many units will be purchased? (1 mark) (b) What area represents the consumer surplus if the consumer pays P? (1 mark) (c) If the price increases to P2, how many units will be purchased? (1 mark) (d) What area represents the consumer surplus if the price increases to P2? (1 mark) A recent technology advancement has reduced the cost of production batteries. For each of the questions below, illustrate your answers with a supply and demand diagram. Explain the results. (a) Illustrate and state the effect of falling production costs on the price and quantity of batteries. (6 marks) (b) Illustrate and explain what happens to consumer surplus, producer surplus, and total surplus. (Hint: label your diagram with letters representing the areas of surplus.) (7 marks) (c) Suppose the supply of batteries is perfectly elastic. Illustrate and explain who benefits most from falling production costs-consumers or producers of these batteries? (7 marks) 4. A recent technology advancement has reduced the cost of production batteries. For each of the questions below, illustrate your answers with a supply and demand diagram. Explain the results. (a) Illustrate and state the effect of falling production costs on the price and quantity of batteries. (6 marks) (b) Illustrate and explain what happens to consumer surplus, producer surplus, and total surplus. (Hint: label your diagram with letters representing the areas of surplus.) (7 marks) (c) Suppose the supply of batteries is perfectly elastic. Illustrate and explain who benefits most from falling production costs-consumers or producers of these batteries? (7 marks)