1) Which is the Nash equilibrium if Boeing produces and why ?
2) Suppose home is a small exporter of wheat. At the price of $100 per ton, home growers exports 20 tons. Now Suppose the home government decides to support its domestic producer with an export subsidy of $40 per ton. Use the following figure to answer these questions.
2) Suppose home is a small exporter of wheat. At the price of $100 per ton, home growers exports 20 tons. Now Suppose the home government decides to support its domestic producer with an export subsidy of $40 per ton. Use the following figure to answer these questions.
2) Suppose home is a small exporter of wheat. At the price of $100 per ton, home growers exports 20 tons. Now Suppose the home government decides to support its domestic producer with an export subsidy of $40 per ton. Use the following figure to answer these questions.
a) What is the quantity exported under free trade and with the export subsidy?
b) Calculate the effect of export subsidy in government revenue
c) If
d) Using the same graph, suppose now that instead of an export subsidy, Home government provides the domestic producer with a production subsidy, What is the quantity exported with the production subsidy? . Is consumer surplus affected? Why?
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