Answer Happy

S = 20 + 20P and D = 100-20P are Home's supply and demand curves for wheat. S = 40 + 20P and D = 80-20P are Foreign's supply and demand curves for wheat. Suppose that Foreign pays a subsidy of $0.50 per unit of wheat it exports. On the graph to the right, show the effects of the subsidy on Foreign: 1) Show the domestic price of wheat in Foreign. Using the line drawing tool, draw a horizontal line at the correct price. Label the line Ps* 2) Show the price that Home importers pay for wheat Using the line drawing tool, draw a horizontal line at the correct price. Label the line Ps. 3) Using the point drawing tool, indicate the quantity supplied by Foreign. Label the point Q. 4) Using the point drawing tool, indicate the quantity demanded by Foreign. Label the point Qd. Carefully follow the instructions above and only draw the required objects. (...) 3- 2- Price, P DForeign Pworld SForeign 0 10 20 30 40 50 60 70 80 90 100 110 120 Quantity, Q