Export Subsidy, Small Country, Exportable Product
(Figure 11.3)

As a result of the subsidy, the quantity exported increases to 140 million. Press the "Show Exports" button to show the exports on the graph. Producers gain surplus equal to areas e + f + g. Press the "Producer surplus" button to show the increase in producer surplus. Consumers lose surplus equal to the area e + f. Press the "Consumer surplus" button to show the decrease in consumer surplus. The cost to the government of paying the export subsidy is areas f + g + h. Press the "Government cost" button to see the cost to the government of paying the export subsidy. Press the "Consumption effect" button to display the consumption effect that arises from the subsidy. Press the "Production effect" button to display the production effect that arises from the subsidy. The net loss in national well-being can be displays by pressing the "Net loss" button.
Press "Continue" when you are ready to move on. The "Reset" button will clear the graph.