1.
a. Point a is where LONG-RUN DEMAND and OLD SUPPLY cross.
b. #1 passes through Point a and is steeper than LONG-RUN DEMAND.
c. NEW SUPPLY is to the right of OLD SUPPLY.
d. Point b is where #1 and NEW SUPPLY cross.
e. Point c is where LONG-RUN DEMAND and NEW SUPPLY cross.
f. #2 passes through Point c, is to the right of #1, and is steeper than LONG-RUN DEMAND.
a. X
b. 2, $8
c. Z
d. 4, $4
e. 6, $6
f. Y