If you could please help with these as soon as possible that would be amazing.

2. (5 Marks) A bakery in a small town has a supply curve for custom cakes that is given by the equation ???? = 1/5???? + 5. The bakery faces a weekly demand curve for cakes given by ???? = 50 2/5???? where price is measured in dollars and quantity is measured per cake.

a) Plot the supply and demand curves on a scale diagram.

b) What is the equilibrium market price the bakery will charge and how many cakes will consumers buy?

c) How much is the consumer surplus?

d) What is the bakery's revenue?

e) Suppose the government added a tax of $3 per cake. How many cakes will consumers now buy and how much will they pay?

3. (3 Marks) Suppose that wheat producers throughout the Midwestern United States experience unusually good weather and so produce a larger than normal harvest. Explain using a diagram what effect this harvest will have on Canadian wheat farmers?

4. (4 Marks) In December 1998, after a year in which Asian demand for B.C. lumber had fallen dramatically, an article in The Globe and Mail had the following headline: "Drastic Cost Reductions Needed to Save 13 B.C. Sawmills".

a) Does this headline suggest that B.C. lumber companies are not profit maximizers?

b) If short-run unit costs are "too high", what is stopping the lumber companies from simply moving along their long-run average cost curve to a more efficient level?

5. (4 Marks) Consider the perfectly competitive Corn industry. It is initially in long run equilibrium at quantity Q0 and price P0.

a) Draw a supply and demand diagram for the Corn market showing this equilibrium.

b) Draw a diagram for a typical firm in its initial long run equilibrium, showing its Marginal Cost, Average Total Cost, and Long Run Average Cost curves. Are any profits being made by this firm?

c) A major use for Corn in Canada and the United States is to produce ethanol for use as a gasoline additive. Suppose that a new technology allows for the production of ethanol from trees, which is MUCH more efficient than producing ethanol from Corn. What happens to your diagram in part (a)? Use your diagram from part (b) to show how the firm reacts to this new situation. Are any profits being made by this firm?

d) Explain how this industry adjusts to its new long run equilibrium using both the diagrams from parts (a) and (b). (You may assume that it is a constant cost industry)