Suppose that oil prices rise sharply for years as a result of a war in the Middle East. Illustrate with a diagram what happens to the: i) Demand for automobiles? ii) Demand for home insulation? iii) Demand for coal? iv) Demand for tyres? v) Demand for bicycles? Explain the impact of external costs and external benefits on resource allocation. Why are public goods not produced in sufficient quantities by private markets? Explain why scarcity forces individuals and society to incur opportunity costs. Give specific examples.