Suppose that the Pacific island economies as a whole decide to reduce air pollution in the midstof climate change by reducing its use of petrol fuel. They impose a $0.50 tax on each liter ofpetrol sold.a. Should they impose this tax on producers or consumers? Explain carefully using a supply anddemand diagram.b. If the demand for petrol fuel were more elastic, would this tax be more effective or lesseffective in reducing the quantity of petrol fuel purchased? Explain with both words and adiagram
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