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Would you please help me with graphs, please? 1. The federal government is concerned about rising gas prices for residential consumers due to lower international
Would you please help me with graphs, please? 1. The federal government is concerned about rising gas prices for residential consumers due to lower international transport costs driving increased exports. To reduce the domestic price paid by consumers of natural gas, the government is considering three policy options to effect exports: (i) a quota on the amount of gas that can be exported, (ii) a tax applied to all exported gas, and (iii) a consumer subsidy where domestic consumers are subsidised for each unit of gas they consume. Suppose the autarky price and quantity for natural gas in Australia is $100 per megajoule (MJ), and quantity of 10,000,000 MJ. The world price for gas is $150 per MJ, and at this price Australian consumers demand 5, 000, 000 MJ, and Australian suppliers supply 15,000,000 MJ. The government wants to reduce the domestic price paid by consumers to only $125 per MJ. a) Draw a demand-supply diagram showing the autarky, and free trade equilibrium outcomes prior to government intervention. b) Show that the desired fall in domestic price paid by consumers can be achieved by (i) an appropriate quota on the amount of gas that can be exported, (ii) an appropriate
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