Q21. Answer all the following questions.

b. Suppose your college expenses for this year are as follows: tuition: $20,000, room and board: $8,000, books and other education supplies: $5,000. Furthermore, during this year, you cannot work at all, which means you have to give up your full-time salary of $40,000. What is the opportunity cost of going to college this year, assuming that your room and board expenses would be the same even if you did not go to college? Show all your work. (2pts)

c. All the points along the PPF show allocative efficiency, but not productive efficiency. True or false? Briefly explain your reasoning. (2pts)

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Q22. In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is a normal good. And briefly explain your reasoning by using demand and supply theory. If you answer the questions without a diagram, you should briefly explain why/how either demand or supply curve or both curves shift(s).

a. The price of a complement increases. (3pts)

b. Consumer income decreases and the price of a substitute increases. (3pts)