1.The COVID-19 pandemic is, for all intents and purposes, causing a worldwide eco-nomic recession, with businesses shutting their doors and many people out of work.Consider the market for electricity during this crisis. Draw a diagram for each of thesesituations.

(a) What effect does COVID-19 have on supply and demand in the market forelectricity? (5%)

(b) Suppose that the government considers banning electricity bills until theCOVID-19 subsides. What effect might this have on the market for electricity? (5%)

(c) Instead of the proposal in (b), the government consider subsidizing the marketfor electricity. What effect would this have on the market for electricity? (5%)

(d) Is there an argument, based on externalities, for subsidizing electricity? (5%)