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III. Consider the case of a small exporting country that grants its exporters a specific subsidy of size s. Assume further that domestic consumers are
III. Consider the case of a small exporting country that grants its exporters a specific subsidy of size "s". Assume further that domestic consumers are unable to obtain the product at the world price P" so the domestic price is P" + s. Suppose a new finance minister takes office and decides to ban exports (i.e. producers are now unable to export the commodity). Identify how consumer surplus, producer surplus, government revenue and total welfare will change as a result of this
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