Computer Science homework help
Suppose Canada decides to subsidize exports of softwood lumber (as the U.S often accuses it of doing). We estimate that a 50% subsidy would result in lumber production in Canada increasing from 800 mbf to 1,000 mbf and domestic consumption falling from 300mbf to 200mbf (“thousand board feet”=mbf). Furthermore, since Canada is a large world supplier, we predict the world price will fall from C$450 to $400/mbf. a) Show the old and new equilibria using one partial equilibrium figureb) Calculate the gains to Canadian producersc) Calculate the deadweight social lossesd) Calculate the gain or loss to Canada as a whole e) If U.S producers are harmed by this practice, the appropriate U.S policy action is a_______________.