Problem Set 4: Market Interventions Due day: Monday, Oct 15, 2013, in class. 1. Consider a small open economy. Suppose the market for corn in Banana Republic is competitive. The domestic market demand function for corn is Q\"! = 10 0.513 and the domestic market supply,r function is Q\" = P 2, both measured in billions of bushels per year. Also assume the import supply curve is innitely elastic at a price of $4 per bushel. (a) Suppose the government imposes a tariff of $2 per bushel. What will the new equilibrium price and tpiantitg.r be? What is the domestic consumer surplus? domestic producer surplus? government tax revenue? dead weight loss? Show all of these numericale and graphically. (h) Ignore part (1a). Suppose the government impose an import quota such that the domestic equilibrium price is P9 = d. What is the domestic consumer surplus? domestic producer surplus? Foreign producer surplus? dead weight loss? Show all of these numerically and graphically