Exercise 2 (10 points) Consider the following scenario: Group 1: Farmers living in the city ABC Group 2: Residents living in the city ABC People in Group 1 pay a much lower price of fuel than people in Group 2. Instructions: a) Is this allocation of fuel efficient and/or fair? b) Consider now that Group 1 is charged the same higher price as that of Group 2. For the market of agricultural products in the city ABC, study and comment (explain with words + graph) the welfare of these two groups of market participants; c) If all fuel in city ABC is sold for its market equilibrium price, (so that both groups pay the same market equilibrium price of fuel) evaluate the efficiency of this market equilibrium. Does the Social Planner need to intervene in such free market and can he raise the total economic well-being? (Explain with words and graph).