Export Subsidy, Large Country, Exportable Product
(Figure 11.4)

Panel A of the figure shows what is happening in the exporting country. At $108 per pipe, production in the country increases from 160 million to 172 million. Press the "Show Production Increase" button to show the change in domestic production on the graph. As a result of the imposition of the subsidy, domestic consumption decreases from 70 to 62 million. Press the "Show Consumption Decrease" button to show the change in domestic consumption on the graph. Quantity exported increases from 90 million to 110 million. Press the "Show Change in Exports" button to show the change in exports on the graph.
Press "Continue" when you are ready to move on. The "Reset" button will clear the graph.