What would Congresswoman Knowitall's proposed program cost and how is it set up and computed? Will her program lower the price to consumers like the MLP and how is that set up?

I. Costs of Policy Proposals (50%) In working these problems, assume that you are a policy analyst working for the Secretary of Agriculture. The information you need to answer the questions is given in the table below. Note that quantities are given in million hundredweight (cwt) and prices are given in S/cwt. You may not need all the information given in the table for every question. You must show your work on one or more separate sheets and staple them to the problem set. Equilibrium price Before Rice Quantities and Prices elasticities Programs Supply (million cwt) 0.75 189.886 Demand (million cwt) -0.4 189.886 Farm Price (S/cwt) 10.00 Consumer price (S/cwt) 10.00 Target Price (S/cwt) None Support Price (S/cwt) None Government Cost (mil $) None NOTE: -- = Not applicable.5. Congresswoman Knowitall doesn't like the policy recommendations of the Secretary, Congressman Drinksalot, Senator City Slicker, or the U.S. Rice Producers Association. She proposes a price loss coverage (PLC) payment program with a reference price of $14.00/cwt and a NR loan rate set at a much lower $2.00/cwt safety net level because she says this program will lower the price to consumers like Congressman Drinksalot's proposed marketing loan program but will be cheaper than either the Secretary's or Congressman Drinksalot's programs. The Secretary asks you to determine if she is right. What would Congresswoman Knowitall's proposed program cost? Is Congresswoman Knowitall right? - Does her program lower the price to consumers like the MLP? How much cheaper or more expensive is her program than Secretary Perdue's proposed program? - How much cheaper or more expensive is her program than Congressman Drinksalot's proposed program