1. Q1. A company has actual unit demand for four consecutive years of 100, 105, 135, and 150. The respective forecasts were 120 for all four years. Illustrate what is the resulting MAD value that can be computed from this data?
Q2. Antonio buys 8 new college textbooks during his first year at school at a cost of $50 each. Assume that he buys only new books. Used books cost only $40 each. When the bookstore announces that there will be a 20-percent price increase in new texts and a 10-percent increase in used texts for the coming year, Antonio's father offers him $80 extra. Is Antonio better off or worse off after the price change? (Hint: draw Antonio's budget lines before and after the price increase.) Now suppose Antonio was also buying some old books before the price increase. Does your answer change?