1.Kim is in the market for a new automobile, and since she was just promoted at work, her tastes in higher-end automobiles has increased, but to her surprise taxes have decreased, which make a new automobile more attractive; therefore, please illustrate by constructing a supply and demand graph, the direction in which the curves will shift and state the new equilibrium price and quantity; for example, state whether price and quantity increased, decreased, or are indeterminate. Please explain your rationale based on the determinants of demand and supply.

The desire and tax break will cause the demand for higher end vehicles to go up. The tax break will also affect the automobile company's ability to produce more vehicles which will increase the supply of the vehicles. This will cause an increase in price and an increase in overall quantity. In summary, Demand went up, quantity went up, supply went up and the price went up. (E = equilibrium)

2.Due to advanced technology, substitute goods for higher education have seen an increase in demand. Please illustrate this circumstance by constructing a supply and demand graph, showing the direction in which the curves will shift, and state the new equilibrium price and quantity; for example, state whether price and quantity increased, decreased, or are indeterminate. Please explain your rationale based on the determinants of demand and supply.

The increase in demand for the substitute goods cause the price and quantity to go up.

The increase in demand for the substitute goods caused the higher education provider's to have a surplus in supply which caused their prices to go down while their quantity went up.