The market for watches in the 'domestic economy' is perfectly competitive. Suppose the demand and supply in the domestic economy are respectively given by: Demand: P = 300 -2QD Supply: P = 50 +3Qs where quantity is measured in thousands of watches, and the price is expressed in $'s/watch. (a) At the current world price (P), domestic supply is 20 thousand watches. Draw a well-labeled graph that illustrates the domestic demand, the domestic supply, and level of imports at the current world price (Pw). Also, calculate the consumer surplus (CS) and producer surplus (PS). Clearly show all calculations. (5 points) (b) The domestic government is considering establishing a tariff ($r/watch) on the import of watches. The government wants to impose a tariff that will increase domestic production by 5 thousand watches. Calculate the level of tariff that is consistent with this objective of the government. Clearly show all calculations, and illustrate your answer using a well-labeled graph. (10 points) (c) Discuss the impact of the tariff on the domestic economy using appropriate calcu- lations. Clearly show all your calculations, and illustrate your answer using a well- labeled graph. (10 points) (d) The watch lobby claims that the tariff benefits the domestic watch industry and, therefore, benefits the domestic economy. Do you agree with the watch lobby? Clearly explain your answer using appropriate calculations from part (c). (5 points) (e) Could you devise an alternative policy that will accomplish the same increase in domestic production of 5 thousand watches? If so, explain the effects of the suggested alternative policy in comparison to the tariff. Clearly show all calculations, and illustrate your answer using a well-labeled graph. (5 points)