Purpose of AssignmentÿIn Week 2, students will employ the supply and demand model to develop consumer surplus and producer surplus as a measure of welfare and market efficiency. Students learn about welfare economics–the study of how the allocation of resources affects economic well-being–and will discover that under most circumstances, the equilibrium price and quantity is also the one that maximizes welfare. Students will review different sources of externalities and a variety of potential cures and will see that while markets are usually a good way to organize economic activity, governments can sometimes improve market outcomes. Students will see how the U.S. government raises and spends money and the difficulty of making a tax system both efficient and equitable.ÿAssignment StepsÿScenario:ÿYou have been assigned to a team that has the responsibility of preparing a paper for the governor’s next economic conference.ÿPrepareÿYou have been assigned to a team that has the responsibility of preparing a 15-20 PPP slides to analyze the current market conditions. Address the following topics: (You need to address each bullet point in a separate slide and include your major points in the slides.)Explain why equilibrium of supply and demand is desirable.Explain the following concepts using the concept of consumer and producer surplus:Efficiency of marketsCosts of taxationBenefits of international tradeDiscuss how externalities may prevent market equilibrium and the various governments policies used to remedy the inefficiencies in markets caused by externalities.Analyze the difference between the efficiency of a tax system and the equity of a tax system as it refers to the costs imposed on taxpayers using the benefits principles.ÿCiteÿa minimum of three peer-reviewed sources, not including your textbook.Formatÿyour cover and reference slides consistent with APA guidelines.