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?

b. What would happen to Canadian welfare (total surplus) as a result of this policy?

c. What would happen to world welfare (total surplus) as a result of this policy?