4. Answer the following questions based on the lesson notes describing how wealth is created.

a.How does eBay create wealth?

b.Which individual has created the most wealth during your lifetime?

c.How do you create wealth?

5. The U.S. government subsidizes flood insurance because those who want to buy it live in the flood plain and cannot get it at reasonable rates.What inefficiency does this create?

6. The ABC marketing consulting firm found that a particular brand of tablet PCs has the following demand curve for a certain region:

Q=10,000200P+0.03Pop+0.6I+0.2A

where Q is the quantity per month, P is price ($), Pop is population, I is disposable income per household (S), and A is advertising expenditure ($).

a. Determine the demand function for the company in a market in which P = 300, Pop = 1,000,000, I = 30,000, and A = 15,000.

b. Calculate the quantity demanded at prices of $200, $175, $150, and $125.

c. Calculate the price necessary to sell 45,000 units.