2. Use neat and well labelled gures to illustrate each of the following scenarios. Let country Z be the other country in each case. (a) Country A is a small country that places an import tariff on wheat. Use a graph of Country A's market (Supply and Demand for Wheat in A) to show the change to consumer surplus in Country A. (b) Country B is a large country that provides an export subsidy on Batteries. Use a graph of the world market to show the change to Country B' 3 Total Surplus. (the graph for the world market should show the export supply of country B along with the import demand of country Z). 1 (c) Country 0 is a small country that sets a tariff rate quota on Cheese. The inquota specic tariff is t.-, the overquota specic tariff is to. The level of the quota is Q. With the tariff rate quota in place Country 0' imports Q units of Cheese and the price to consumers is greater than the sum of the world price and the inquota tariff. Use a graph of Country C's market for Cheese to show the quota rents. (d) Country D is a large country that sets an export quota. Q6 on exports of Drums. Country D allocates export licences to rms within country D. Use a graph of the market for Drums in country D to show the Consumer Surplus, the Producer Surplus, any Government Revenues or Costs, and Quota Rents arising from the export quota. (e) Country D is a large country that sets an export quota. Q8 on exports of Drums. Country D allocates export licences to rms within country D. Use a graph world market for Drums to show any terms of trade gain or loss for country D as well as any distortionary losses for country D