1. Assume the government wishes to adopt a more environmentally friendly agenda and has thus decide to enter markets where externalities are found.Show using supply and demand analysis the effect on where society maximizes welfare when: (6 points)

a. A government regulation that taxes the amount of production (and thus pollution) is added to the market.

b. The government provides an income tax break to people who buy electric cars.

c. The government subsidizes firms if the develop new "green" products