1.) The U.S. business tax rate was (until recently) one of the world’s highest. Many argued that a lower tax rate is needed because it would lead to: (1) higher employment and (2) lower consumer prices. Using the concepts of “market equilibrium” and “supply shifters” explain why a lower business tax rate would likely produce these two beneficial outcomes. Prepare generic market demand and market supply curves (for any market) to explain your answer. 2.) For each of the following events, describe what would predictably happen to (1) the demand/supply curves and (2) to equilibrium price. You are not required to draw a graph for this problem; a description will suffice. You may draw a graph if you wish to do so. (Hint: don’t shift both curves unless appropriate).a. The impact on the U.S. “hybrid” automobile market in the event of a major increase in gasoline prices, ceteris paribus.i. There would be an increase in “hybrid” automobile sales and a decrease in “hybrid” automobile supply and a decrease in gasoline sales.b. The impact on the entire U.S. domestic auto market if the price for foreign autos increases due to a weakening of the U.S. dollar, ceteris paribus.i. The overall impact would be decrease in auto sales.c. The likely impact on the U.S. domestic auto market in the event of new health care legislation that mandates more employer-provided health care, ceteris paribus.i. The impact on the U.S. domestic auto market if a new heath care legislation that mandates more employer-provided health care would stay the same or have no impact. 3.) Go to problem #8 at the end of Chapter 3. Use the given data and complete the following questions:a. What is the initial equilibrium price based on the given data? Graph the solution to this answer. b. Now assume OPEC decides to decrease output of oil. If OPEC decreases oil output and this ultimately decreases gasoline supply at every price by 3 gallons (ceteris paribus), what will the new equilibrium price be? Illustrate this change in supply on your graph.c. c. Now assume the government worries about OPEC’s impact on price. Assume the government decides to freeze the price at the initial equilibrium price ($3). What is the impact on the market? Fully explain your answer.The impact on the market is that the market supply would decrease faster than it would if the prices were higher. Higher prices will lead to a lower demand but an increase in supply.4.) Using the concept of “Disequilibrium Pricing” explain why a higher minimum wage would likely contribute to higher unemployment.i. The concept of “Disequilibrium Pricing” is explained a as a price above or below the equilibrium price. IF a price is below the equilibrium price it creates a shortage. IF the price is above the equilibrium, price creates a surplus. If the minimal wage increases then the availability of jobs would decrease due to a reallocation of funds for wages. Many companies could be forced to reduce their workforce to offset the change. The reducing of the workforce would come as layoffs leading to higher employment.Application of Concepts; The Pharmaceutical Industry:5.) The author describes market interactions as including 2 major market segments and 4 major market participants. Now assume you have completed your studies and you work for a pharmaceutical firm that researches and manufactures prescription drugs. Does your company interact with both market segments and all 4 participants? Which do you think is the most important participant? Fully explain your answers with examples.I believe that my company would interact in both the factor and product market and focus on consumers. I think as a manufactures, raw materials/products are needed to be purchased for the production of our prescription drugs. Ws also would focus on the market because we are manufacturing prescription drugs to be sold to our consumers. The most important participants are consumers because the gain the most benefit from using the drugs.6.) Currently there is a discussion about possible price-ceilings for prescription drugs in the U.S. That’s what Canada does and it is the major reason why their prices are lower. What would be the predictable effect in the U.S. prescription drug market if the government imposed a price ceiling of $100 for a bottle of “XYZ” medicine and if the current “market price” for “XYZ” was $200? (Assume there is no generic equivalent or less expensive substitute) What would be the predictable effect in the U.S. prescription drug market if the government imposed a price ceiling of $100 for a bottle of “XYZ” medicine and if the current “market price” for “XYZ” was $200? (Assume there is no generic equivalent or less expensive substitute)The imposed price ceiling would cause the demand for medicine to rise. The price ceiling would also decrease the supply and that would result in a supply shortage.