The American supply and demand curves for bananas cross at $5. Foreigners will buy as many bananas as Americans want to sell at $10. The government subsidizes exports by giving sellers $2 for each banana they sell abroad. Bananas cannot be imported into the United States.

a. Illustrate the deadweight loss from the subsidy.

b. Devise a program that everyone-buyers, sellers, and the recipients of the revenue-prefers to the subsidy.