Scenario 1: Assume that the government imposed a price ceiling on gasoline in or

Question

Scenario 1: Assume that the government imposed a price ceiling on gasoline in order to prevent prices from getting too high. What are the economic implications of this action in the gasoline markets? Use graphs as needed and explain your answers thoroughly.

Scenario 2: Assume that the government imposed a price floor on wages (minimum wage) in order to make sure that workers can earn a living wage. Is this a price floor? What are the economic implications of this action in the labor markets? Use graphs as needed and explain your answers thoroughly.

Scenario 3: What are the gains and losses of international trade? What happens when tariffs are imposed, in terms of the importing and exporting countries? Use graphs as needed and explain your answers thoroughly.

Scenario 4: If the government doubled the tax on gasoline, would the tax revenues increase or decrease? Why? Use graphs as needed and explain your answers thoroughly.

Required:

Using the scenarios from above, create an 3-6 page paper in APA format. Submit your paper to the W2: Assignment 1 Dropbox by Wednesday, February 27, 2013.

Create a Microsoft PowerPoint presentation for each scenario, summarizing your paper and consisting of at least one slide per scenario.

Explanation / Answer

1.Price ceiling of gasoline wil stabilise the economic scenario preventing excess increase in price rates leading to healthy market but in the long run may ultimately lead to shortage of gasoline

2..Minimum wages rule benifits the workers as they get kind of fixed income and additional income will depend on hte amount of effort they put in thus leading competition among labours without affecting their survival and also benifiting production works thus fastening economic growth

3.International trade has its own profits and loses.It leads to reduction in prices thus increasing competition and benifiting the customers by availabel them with cheaper goods.But domestic industries get affected leading to loss of revenue of government as a whole.Imposing tariffs not only checks these loses but also increases tax benifits of country

4.Doubling tax on gasoline would actually decrease tax revenue of government as it will lead to lesser selling of gasoline thus reducing sales tax

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