1. GOVERNMENT INTERVENTIONS AND DEAD WEIGHT LOSS.] (25 marks) Consider a closed economy. Suppose the market for corn in Banana Republic is competitive. The domestic market demand function for corn is Q" = 25 - P and the domestic market supply function is Q" = P - 5, both measured in billions of bushels per year. In order to help the corn industry, the government initiated a price support program by purchasing 2 billion bushels corn in the market. (a) (5 marks) Draw a graph to show the new market equilibrium price and quantity without calculating the numbers. Identify the area of the dead weight loss on the graph. (b) (6 marks) Calculate the new market equilibrium price and quantity. Now instead of purchasing the goods in the market, the government provides a $2/unit subsidy to the firms. (c) (5 marks) Draw a graph to show the new market equilibrium price and quantity without calculating the numbers. Identify the area of the dead weight loss on the graph. (d) (5 marks) Calculate the new market equilibrium price and quantity. Now consider a small open economy. The domestic supply and demand functions are the same as before. Also assume the import supply curve in infinitely elastic at a price of $6 per bushel. (c) (5 marks) Suppose the government imposes a tariff of $2 per bushel. Calculate the new equilibrium price and quantity. Calculate the total willingness to pay of the domestic consumers, domestic producer surplus and dead weight loss