• Aoslia is a small country that takes the world price of corn as given. Its domestic supply and demand for corn are given by the following: QD = 45 − 3P QS = 3P − 9 a) Assume initially that Aoslia does not open to trade. What is the autarky equilibrium price and quantity? b) Suppose Aoslia decides to engage in trade. Determine the quantity demanded, quantity supplied, and import given the world price of $6 per bushel of corn. c) If the Aoslia government imposes a tariff in the amount of $1 (i.e., t = $1), what is the new domestic price? What is the amount imported? d) Determine the effect of the tariff on the Aoslian consumers, producers, and government. e) What is the net effect of the tariff on Aoslia’s welfare? Explain. ONLY ANSWER QUESTION 3 3. Refer to the previous problem. Suppose the Aoslian government applies an import quota that limits imports to 12 bushels. a) Determine the quantity demanded, quantity supplied, and new domestic price with the quota. b) Calculate the quota rent. c) Assuming that the quota licenses are allocated to domestic producers for free, what is the net effect of the quota on Aoslia’s welfare? d) Assuming that the quota rents are allocated to foreign exporters for free, what is the net effect of the quota on Aoslia’s welfare?