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Q1 Suppose the government builds and staffs a hospital in order to provide "free" medical care. a) What is the opportunity cost of the free medical care? b) Is it free from the perspective of the society as a whole? Q2 Suppose that an economy has the PPF shown is the following table. Possibility Maximum units of Maximum units of butter per week guns per week A 200 0 180 60 160 100 100 160 40 200 220 a) Plot these possibilities, label the points and draw the PPF. b) If the economy moves from possibility C to possibility D, the opportunity cost per unit of gun will be how many units of butter? c) If the economy moves from possibility D to possibility E, the opportunity cost per unit of gun will be how many units of butter? d) In general terms, what happens to the opportunity cost of guns as the output of guns increases? Q3 For each of the following markets, find the equilibrium price and quantity. a) Qs = 10 + 5P and Op =100-P b) Qs =-20+2P and On =100-3P c) Qs =5P and Op =1000-3P d) Qs = 22 + 2P and Op =118-P e) Qs =30 + 4P and On =170-2P