The labor force of an island country consists of only five workers. There are only two industries in this island, one producing X (for example, goods} and the other producing Y (for example, services). The following graph shows the production possibilities frontier (PPF) for this island country. It shows the effects on the production of X and Y from shifting workers from one industry to another one worker at o time. For example, suppose that currently X = 1 and Y = 90. Now, if we shift one worker from Y to X production, the production of X will increase to X = 2 and the production of Y will decrease to Y = 75. There are no externalities. The following graph shows the monthly demand functions for a particular good such as a particular kind of pizza pertaining to two consumers; Mrs. Braun and Mr. Bleau. Currently the price of this pizza is $20 per unit and they are both buying 10 pizzas per month. Use the formulas for geometric areas to calculate the items like consumer surplus, total willingness to pay, or consumer expenditure. Enter your answers on Canvas without dollar signs or commas. $62 $60 $58 $56 $54 $52 $50 $48 Mrs. Braun $46 $44 $42 $40 $38 $36 $34 $32 Price per Unit $30 $28 $26 $24 $22 $20 $18 Mr. Bleau $16 $14 $12 $10 $8 $6 $4 $2 22 24 26 28 30 so 12 14 16 18 20 6 8 10There are always policy proposals to reduce gasoline consumption by American drivers. This is for several reasons. First, reduced gasoline consumption will reduce the nation's dependence on foreign oil. Second, a large portion (about 50%) of the air pollution comes from moving sources. Therefore, reducing gasoline consumption will help mitigate this externality. Third, reducing fuel consumption will mitigate the need to invest in expensive infrastructures such as reneries. Economic policy in this area may bejustifled since there might in fact be a conict between private incentives and public interest. Left alone, individual drivers may have little or no incentive to drive fewer miles simply to reduce the nation's dependence on foreign oil or to reduce air pollution. We will consider only the following three popular proposals: 1. Encourage production of more fuelefcient cars. 2. Levy a gasoline tax to discourage consumption of the product. 3. Invest in cars that run on alternative fuels such as methanol. We analyze the effectiveness of these proposals through a simple model. A consumer's total monthly expenditure on gasoline equals the number of gallons she puts in the car times the price per gallon of gasoline (135311\"): Expenditure = PCallon x Gallons Suppose the price of gasoline is $4fgallon and she buys 20 gallons per month. Then, her monthly expenditure on gasoline will be: Expenditure = Pam,\" >