Answer the following questions. Each part of the question is not related to each other.

a) Suppose there is an increase in the demand of the imported commodity subject to a given import quota, determine whether each of the following statements is true, false, or uncertain.

Statement I - There will be no change in the quantity of the commodity consumed. (5 points)

Statement II - There will be an increase in the domestic price of the commodity. (5 points)

b) On May 13, 2022, the Government of India announced a ban on wheat export, citing s food security and soaring (food) prices. i) Explain how a ban on wheat export may help to stabilize food price in India. (5 points)

ii) Russia, Europe, the United States and Canada are traditionally the top global wheat exporters. However, each has faced significant wheat crop setbacks in recent seasons, mainly due to mainly due to droughts in North America and Europe. Given what have happened in the traditional world wheat exporters and the recent export ban from India. What happens to the world market for wheat? (4 points)

iii) Continued from the previous parts, discuss the impacts on the Canada's terms of trade and the (domestic) market for wheat. (6 points