3. Following a pipeline disruption, poolinc prices skyrocketed on the west coned. California state officials reneled by pulling a price ceiling on proline sales, dis loving prices above $4 per gallon. Demand for queline is chameterived by Q - 30 0 P and supply following the disruption is given by Q - 120 | 12 P. (In each equation Q is the quantity of grecoline demanded or supplied and P is the price per gallon.) Relative to the free market equilibrium with no price control, how does this price ceiling alloct consumer surplus in this market? Consumer surplus pors up / down (circle one) by $ (write in a number) 4. Sarah and David are looking to buy a new home. Last weekend they found a home that costs $100,0oo Lhal they thought was perfect. They immediately put down a non-refundable deposit of $2,200 that would be applied towards their purchase of the house. Today however, they found another home that Lhey like just as much that costs only $250 000. Thies home won't be available for several months which means that they will have to spend an additional $4,000 on rent if they buy the second home. (Hen Ling coeds them $4,010 but does not provide any additional utility or discomfort beyond the cost. Assume Lhall both houses will sell for $320,100 if Sumh and David ever decide to move.) Which home should Samh and David buy? (a) The fired home (h) The second home (e) Neither home (d) They should be indifferent 5. Consider the competitive market for hotel rooms in Ann Arbor. Prior to the COVID-19 crisis the hotel market was in long-run equilibrium with no incentives for entry and no reasons for exit. Then The COVID -19 crisis hit, darkly reducing consumer demand. How would you model the impact of the COVID-19 crisis in the short-run? (You can nowme that in the short-run the supply curve for hotel rooms is upward sloping and demand is downward sloping; Le., neither are perfectly clastic nor inclastic.) How would the demand and supply curves in this market he affected? . Demand: shifts out / shifts in / does not shill / cannot be determined (circle one) . Supply: chills out / shifts in / does not shill / cannot be determined (circle one) How would price and quantity change after the COVID-19 crisis hiler . Price: will be lover / will be higher / will be unchanged / cannot be determined (aincde one) . Quantity: will be lower / will be higher / will be unchanged / cannot be determined (circle one)