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In: Economics

a. The taxes imposed on gasoline in Barbados is excessive and inequitable to motorists. b. The...

a. The taxes imposed on gasoline in Barbados is excessive and inequitable to motorists. b. The government of Trinidad and Tobago should increase the minimum wage to $4000 per week to reduce poverty. For parts (a) and (b) respectively, DRAW a market that is initially in equilibrium, labelling the initial equilibrium price and equilibrium quantity. Then show what happens in each market based on the given scenarios. Label the new equilibrium price and equilibrium quantity. Write the given sentence after each scenario in your examination booklet and fill in the blanks with the words “increase” or “decrease” to describe what happens. a. There is an increase in income and the good is an inferior good: The equilibrium price will _______________ and the equilibrium quantity will _______________. b. Buyers expect the price of the good to fall in the future: The equilibrium price will _______________ and the equilibrium quantity will _______________.

PLEASE SHOW DRAWING CLEARLY.

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Expert Solution

Rahul Sunny answered 3 months ago
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