Answer from cs61c-ck (Allen Lee 16583554) for Question 2
We use the lower-order (rightmost) bits for finding corresponding locations in cache because these lower order bits are the ones mostly likely to change, so we are likely to utilize our entire cache.  Consider the case in which we use the 3 highest-order bits in address to determine the cache location.  The CPU will most likely ask for data from the memory that is close to each other, so these high order bits will always be identical, so we constantly overwrite one location in cache, which is wasteful.