Question 1 Assume that the world consists of only two countries: Australia and Indonesia. Australia's demand curve for A4 copy paper and Australia's supply of A4 copy paper are

Q = 100-20P (Demand)

Q = -20+20P (Supply)

Indonesia's demand curve for A4 copy paper and Indonesia's supply of A4 copy paper are:

Q = 80-20P (Demand)

Q = 40+20P (Supply)

where Q and P denote quantity and the price in Australian dollars, respectively.

Assume now that Indonesia currently provides a specific export subsidy of AU$ 0.5 to its domestic producers of A4 copy paper.

Please identify the trade patterns between Australia and Indonesia in presence of the export subsidy. Specifically, which country will be the exporter of A4 copy paper? What is the price of A4 copy paper in Indonesia and in Australia? What is the volume of their bilateral trade? What is the export subsidy payment? How much does the export subsidy help Indonesian producers to increase their exports of A4 copy paper to Australia? Please be elaborate in your answers.