Question 1 Note: For all sub-questions of Question 1, your answer should not exceed SIDE! words excluding gures and tables. (a) (b) (C) Consider the following information for a product X and a related product Y: Quanti othmded Price 0\" $101000 $1- Iti $.3 $9.0M $1.20 IClassify X in terms of its price and income elasticities of demand and establish the relationship between product X and product '1". How does knowledge on the price elasticity of demand, the income elasticity of demand and the cross-price elasticity of demand helps a firm in making business decisions. Explain with suitable examples. (45 marks] The demand and supply functions of rice is given as P = EDD IIISQ and P = l + ESQ, respectiyely. Solve for the equilibrium price and quantity in the rice market. If the government implements a price oor of$13 per unit of rice, appraise the efciency of the rice market by computing the consumer surplus. the producer surplus and the deadweight loss {if any] in the rice market. Support your answers with a suitable rice market diagram and comment on the winner and loser under this policy. (30 marks] To discourage the consumption of a product. the government should impose a tax on the consumers instead of the producers. Do you agree? Explain with a suitable market diagram. (25 marks}