Question 3. Market Demand Curve [Ch.4] Imagine Sue's demand curve for shoes is Q-8-2P and Jackie's demand curve is Q=12-2P. The market supply curve for shoes is given by Q-4P-8. (Hint: Don't worry if your equilibrium quantity and equilibrium price calculations do not amount to a whole number.) a. [graphing question] Graph Sue's demand curve and Jackie's demand curve on separate graphs. Graph the market supply curve on each of the separate graphs. (0.5 mark) b. [graphing question] Now on a new graph, graph the market demand curve for shoes by horizontally combining Sue and Jackie's demand curves. (0.5 mark) Question 4. Price Intervention [Ch.6, 7. Also see lecture notes Cho] (2 marks) A price support program for farmers producing wheat is put into effect by the government. In order to increase farms' income, the government creates a price floor in the market for wheat and buy any surplus wheat and store it in Alberta at $4/lb. The government sets the price floor at Pfloor = $12/lb. of wheat. The supply and demand schedules for wheat are as follows: QSupply = (P - 8)/2 QDemand = (14 - P)/2 a. [graphing question] Imagine the government currently implements a price floor of $12/lb of wheat.-Plot the demand and supply curves in a graph. Record the initial equilibrium price and quantity in your graph. On your graph identify the y-intercept and x- intercept for the demand curve and the y-intercept for the supply curve. In your graph shade the area that denotes/signifies the cost to the government net of storage costs. b. [graphing question] Shade the area of the cost to consumers on the graph. c. [graphing question] With the same demand and supply schedules, create a new graph where the government institutes a price subsidy instead of a price floor. There is no longer a cost for storage, and the guarantee(d) price equals the floor price, Pguarantee = $12. Shade the area that indicates the total cost to the government for the subsidy program on your new graph. d. [graphing question] Shade the area of the cost to consumers with the price subsidy program on the graph