Question 1(30 marks)Suppose the market for corn in Cornucopia is competitive. No imports and exports are possible

Question 1(30 marks)Suppose the market for corn in Cornucopia is competitive. No imports and exports are possible. The demand curve is Qd = 10 ? Pd, where, Qd is the quantity demanded (in millions of bushels) when the price consumers pay is Pd. The supply curve iswhere Qs is the quantity supplied (in millions of bushels) when the price producers receive is Ps.a)What are the equilibrium price and quantity?b)At the equilibrium in part (a), what is consumer surplus? producer surplus? deadweight loss? Show all of these graphically.c)Suppose the government imposes a tax of $2 per unit to raise government revenues. What will the new equilibrium quantity be? What price will buyers pay? What price will sellers receive?d)At the equilibrium in part (c), what is consumer surplus? producer surplus? the impact on the government budget? deadweight loss? Show all of these graphically.e)Suppose the government has a change of heart about the importance of corn revenues to the happiness of the Cornucopian farmers. The tax is removed, and a subsidy of $1 per unit is granted to corn producers. What will the equilibrium quantity be? What price will the buyer pay? What amount (including the subsidy) will corn farmers receive?f)At the equilibrium in part (e), what is consumer surplus? producer surplus? What will be the total cost to the government? deadweight loss? Show all of these graphically.Question 2 (20 marks)Suppose that the market demand curve is and the market supply curve is .a.Calculate the equilibrium price and output level.b.Suppose a price floor of 16 is imposed in this market. What is the new equilibrium quantity transacted in the market?c.How does the price that firms receive — net any additional marginal effort costs they incur — compare to the price consumers pay?d.What is the total cost of the additional effort firms have to exert in equilibrium?1ECN 700 Assignment #1 Emilia BarbuQuestion 3(20 marks)Suppose all firms in a perfectly competitive industry have production processes characterized by the production function . Suppose the cost of labor is 20 and the cost of capital is 10.a.Suppose that the industry is in long run equilibrium and that firms are using 1 unit of capital. What is the short run cost function of each firm?b.Suppose there are 5,000 firms in long run equilibrium. What is the short run market supply function?c.Suppose market demand is What is the equilibrium price?d.Firms in this industry face a recurring fixed cost FC. What must FC be in order for this industry to indeed be in long run equilibrium with its 100 firms?Question 4 (30 marks)Explain the effect of tariffs on the domestic market. Using data and information from WTO website, UNCTAD, Canada Border Services Agency(http://www.cbsa-asfc.gc.ca/), World Bank Trade Database(http://data.worldbank.org/topic/trade), Statistics Canada(http://www.statcan.gc.ca/eng/trade/data) and/or other data sources of your choice, search for Trade data on a specific import industry (for example Manufacturing, Primary Resources) or commodity (like poultry, textiles) which is subject to a tariff in Canada. Use a graph to show imports (quantity or prices) over time. Explain how data would be different in the absence of tariffs.