Economics Statement: Assume, there was 20% import tax rate on import of agricultural machinery to Afghanistan, which has just decreased to 8%. Required A: Who would benefit the change? Why? How will this affect the market demand and supply for agricultural machinery in Afghanistan? Explain it with the help of graphical illustration Statement 2: The demand for Toyota Cars, model 2010 in Kabul is given by the following equation: Qd = 12000 - 0.4P + 0.3PM + 0.2Y ; where 'Qd' is the demand quantity, 'P' is the price car, 'PM' is the price of Mercedes Benz and 'Y' is consumer's average annual income. Required A. Looking at the demand function, what do '12,000', '-' and '+' mean? Why do we have '' before 'P' and have '+' before 'Y' and 'PM'? Can the sign before income be '-' also? How? Required B. Calculate the market demand for the following two situations: Situation P (USD) PM (USD) Y (USD) Qd (Toyota Model 2010) A 7,000 5,000 25,000 ? B 11,000 8,000 18,000 ? Please provide economical

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The change in import tax rate from 20 to 8 would benefit the producers ... View the full answer