1) Assume that the domestic supply and demand for a good are given by the following equations. Q = 500 – 20 P   Q = 80 + 10 P   a) If the world price is $10 what is the free trade level of imports? Calculate the net welfare effects of a quota of 60 units. (Quota rent goes to foreign suppliers ( VERS) . Use also graph to show the effects of this quota. b) If %30 tariff imposed on the world price(10$) , what will be net welfare effects? Compare this welfare effect  with the one in (a) and comment. Use a  new graph to show the effects.

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