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1. The demand function for a good is Q=1200-2P while the supply functions is Q=-200+3P. World price is $350 and the nation is giving $50 export subsidy.
a. Graph the demand and supply function to scale and label axis and intercepts.
b. Determine the quantity demanded before and after the subsidy.
c. Determine the quantity supplied before and after the subsidy.
d. Determine the quantity exported before and after the subsidy.
e. Determine the consumer surplus before and after the subsidy.
f. Determine the producer surplus before and after the subsidy.
g. Determine government cost of the subsidy.
h. Determine the dead weight loss.
i. Identify on the graph in part (a) the dead weight loss.
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