Question 3 (26 points): The figure below illustrates the demand and supply schedules for sunflowers in Malawi, a small importing nation that is unable to affect the world price. The world price of sunflowers fluctuates between is $4 and $6 per pound. Given this information answer the following questions: Malawi World market Price Price Sunflowers Sunflowers 3.1 (3 points) In the World Market panel, draw the excess demand function and label it ED. 3.2 (5 points) Find Malawi's imports (in bunches), consumer surplus, producer surplus and social welfare (only the areas) in the presence of free trade when the world price of sunflowers is $4/bunch and when it is $6/bunch. World Price = $4 World Price = $6 Imports 20- 80 = 60 30-70 - YO Consumer Surplus 80 70 Producer Surplus Social Welfare 3.3 (2 points) The government of Malawi uses a variable import levy to guarantee a price of sunflowers of $8/bunch for its domestic producers. What is the import levy that will be needed to guarantee the domestic price of $8 when the world price is $4/bunch? When the world price is $6/bunch? When the world price is $4/bunch: When the world price is $6/bunch: 3.4 (2 points) What are Malawi's imports with this variable import levy when the world price of sunflowers is $4/bunch? 3.5 (2 points) What are Malawi's imports with this variable import levy when the world price of sunflowers is $6/bunch? 3.6 (3 points) Draw the excess demand function with the variable import levy in the World Market panel and label it EDv. 3.7 (3 points) Find the dollar values of the change in consumer surplus, producer surplus, government revenue, and social welfare with the variable import levy as compared to free trade when the world price of sunflowers is $4/bunch. Change in consumer surplus: Change in producer surplus: Change in government revenue: Change in social welfare: 3.8 (3 points) Now suppose the world price of sunflowers goes up to $6 and the government maintains the domestic price at $8/bunch. Would the loss in social welfare due to the variable