Solve the following correctly

Part II - Supply and Demand (18 points - 3 points each) There are six separate questions below. Each question begins with a news headline. After you read the headline in bold, please answer the question directly below it. Examine what happens to equilibrium price and equilibrium quantity in the market listed below the headline. In answering these questions, please provide the correct graphical representation of each situation (i.e., in the first question, you should provide a graph for the market for vacations to Hawaii). Identify whether the demand curve or supply curve is impacted in the given market and make sure to explain why the curve would be impacted. Please explain how you came to your answer (the more detail you give the more points you receive). Each question is worth 3 points. 1) Household incomes increased 25% over the last year How does this impact the market for vacations to Hawail? 2) Bad weather leads to a lower than expected harvest of the orange crop How does that impact the market for apple juice at local grocery stores? 3) The State of Connecticut imposes tolls on route 1-95 (the main route used to travel to NYC for many workers) How does this impact the market for train tickets on the Metro-North into New York City? 4) The John Deere Company manufactures a new tractor that allows farmers to harvest their crops in 12 the time it used to take to harvest How does this impact the market for cereal? 5) The U.S. Government mandates that fast food restaurants (like Mcdonald's) have to increase the quality of their beef used in the production of their hamburgers How does this impact the market for McDonald's hamburgers? 6) Meteorologists predict an above average amount of snow for the Northeast United States this coming winter How does this impact the market for snow blowers in the Northeast United States?PAGE 1 -- Consumer Utility Assume both Good X1 and Good X2 cost 52, and Person] has a budget of $24 for the two goods. Assume, given the shape of hisfher indifference curves, Person J most prefers to consume equal units of Goods A and B. 1a. (i) Draw an indifference curve for Person J for goods X1 and X2. In your diagram place Good X2 on the yaxis and Good X1 on the xaxis, and label the indifference curve l1. (ii) Insert a budget line curve into the diagram that reflects the optimal preference of Person] with his/her cui'rent budget. On each axis, indicate the amount of X1 and X2 that Person] is consuming. 1b. (i) Return to la and draw two additional indifference curvesone below the original indifference curve and one above the original indifference curve. Assume the price of Good X1 falls to $1. Make changes to your diagram in (a) above as a result of this price change. 1c. At the new price for good X1, how many units of X1 does consumer] consume? 1d. At the new price for good X1, how many units of X2 does consumer] consume? 1e. Depict the individual demand curve of Person] for Good X1 for quantities demanded at prices 51 and 52. Show numerical values for price and quantity. explain what happens tn shortrun output in each of the fellcwing cases. 1. EL. increases by 5 percentage paints. 2. g decreases by 1 percentage point. 3. The real interest rate rises from 2.5% tn 5%. :1. Potential entpnt increases by 10%. 19. Suppose the parameters of the IS curve are a, = 0, b = 0.5, r = 3% and the real interest rate is initially R = 3%. (a) Is the economy in its long-term equilibrium? Explain. (b) Suppose the real interest rate falls to 2 percent; what happens to the short-run equilibrium, holding everything else constant? (c) What happens to the short-run equilibrium if a falls 3 percent, holding everything else constant? (d) What occurs if the marginal product of capital rises to 5%? What would cause this to happen?19. Suppose the parameters of the IS curve are a, = 0, b = 0.5, r = 3% and the real interest rate is initially R = 3%. (a) Is the economy in its long-term equilibrium? Explain. (b) Suppose the real interest rate falls to 2 percent; what happens to the short-run equilibrium, holding everything else constant? (c) What happens to the short-run equilibrium if a falls 3 percent, holding everything else constant? (d) What occurs if the marginal product of capital rises to 5%? What would cause this to happen