What happens to USA corn production consumption and exports?

1. On the horizontal axis the quantity of corn in millions of bushels Show more International Econ Home work: 1. On the horizontal axis the quantity of corn in millions of bushels on the vertical axis the price of corn in bushels. Let the demand curve have a vertical intercepts of $14 and let the quantity of corn demanded increase by 40miilion bushels for every one dollar decline in the price of corn. Let the supply curve have a vertical intercept of $3 and let the quantity of corn supplied increase by 70 million bushels for every one dollar increase in price. This will yield a domestic equilibrium price and quantity of $7 per bushel and 280 million bushels of corn. Now assume that the world price of corn is $9 a bushel. Now suppose the U.S government places a $1 export subsidy for corn. That is the government pays farmers an additional dollar for each bushel of corn that sold outside the USA. What happens to USA corn production consumption and exports? Show and explain using thee diagram. Does this increase USA well-being as measured by consumer and producer surplus including the costs of the subsidy? Show and explain. Show less

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