L1. Suppose the market supply and demand curves for wheat in the United States are as follows (prices are in dollars, quantities are in millions of bushels ) Ps=0.4QsPD=450.1QD where PS and QS are the supply price and quantity, and PD and QD are the demand price and quantity. The U.S. government is considering two altemative price support policies: policy A and policy B. Policy A: The government buys enough wheat so that a market price of $40.00 is maintained. Wheat bought by the government is stored, destroyed or given away abroad. Policy B: The government subsidizes wheat by SX per bushel and buys no wheat itself. L1a. (5 points) (i) How much wheat does the government buy, (ii) how much is domestically consumed, and (iii) what is the cost to the government of this policy? L1b. ( 5 points) (i)Calculate the subsidy needed if farmers are to receive $40 per bushel in the new equilibrium. Under this policy, (ii) how much wheat will consumers buy? (iii) How much will the government have to pay out