1. Illustrate the effects of the EU’s sugar subsidies in a diagram of the EU sugar market. Clearly show the quantities mentioned above (make the axis on scale: on the vertical axis, use 1cm=$100/tonne, and on the horizontal axis, use 0.5cm=100 million tonnes). Identify the world prices with and without subsidy, the EU price (paid to producers and aid by consumers) the quantities produced and consumed in the EU, and EU exports. (10 points)

2. Using the information above, how much is the EU export subsidy (in $/tonne)? Show your work. Illustrate in the figure above. (7 points)

3. And how much is the total amount of subsidies ($ millions)? Show your work. Illustrate in the figure above. (8 points)

4. Why does the paper say that ” (…) EU sugar policies hurt poor countries”? Explain and discuss, referring to the diagram above, the impact on developing countries (15 points)