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5. Suppose that the United States paid exporters a subsidy of $1/bushel for every bushel of wheat exported to Canada. Canada then charges a $1/bushel

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5. Suppose that the United States paid exporters a subsidy of $1/bushel for every bushel of wheat exported to Canada. Canada then charges a $1/bushel countervailing duty on every bushel of wheat imported from the United States. The market for wheat is perfectly competitive. a. What would happen to American welfare (total surplus) as a result of this policy? (5 points) b. What would happen to Canadian welfare (total surplus) as a result of this policy? (5 points) c. What would happen to world welfare (total surplus) as a result of this policy? (5 points)

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