Type error. Cons takes two parameters. It is only being passed one parameter.
Incorrect. Suppose 'cons' is thrown out. Then this equation says that merge([2,4,6], [3,5,7]) = [2,3,5,7]. It also says that merge([2,3,4], [5,6,7]) = [2,5,6,7]. The first two members of the result list are not necessarily head(A) and head(B). Also, you can't just throw away tail(A).