Problem
Concerned about the political fallout from rising gas prices, the government cuts the tax on gasoline. Use this information to work Problems 1 and 2.
1. Explain the effect of this tax cut on the price of gasoline and the quantity bought if, at the same time, the oil-producing nations increase production.
2. Explain the effect of this tax cut on the price of gasoline and the quantity bought if, at the same time, a global shortage of oil sends the price up.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.