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#### All Subjects Economics Microeconomics BHM 101.3 - The demand and supply schedules for US wheat

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# BHM 101.3 - The demand and supply schedules for US wheat

Question # 00544483
Subject: Economics
Topic: Microeconomics
Due on: 06/11/2017
Posted On: 06/11/2017 09:03 AM

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Part A: Answer the following questions.

Price

(dollar per tonne)

Quantity

demanded

(kilotonnes)

Quantity

supplied

(kilotonnes)

 100 150 200 250 300 350 400

 2,000 1,400 1,200 1,000 800 600 0

 0 600 800 1,000 1,200 1,400 2,000

The table shows the demand and supply schedules for US wheat market.The US Farm Bill 2012 indicates that the domestic price of wheat will be set at \$300 per tonne, which is above the market equilibrium level of \$250 per tonne, in order to support for domestic wheat growers. At the market equilibrium, 1,000 kilo tonnes(Kt) are supplied.

(a) The US Farm Bill 2012 indicates that the domestic price of wheat is set at \$300 per tonne, which is above the market equilibrium level of \$250 per tonne, in order to support for domestic wheat growers. On a graph, show if it creates a shortage or a surplus in the market for wheat, and explain why and by how much.(2 marks)

(b) On a graph, explain how the price control in the US would change the consumer surplus, producer surplus, and deadweight loss in the domestic wheat market. Assume that the US does not trade wheat internationally. Also, calculate the changes in consumer surplus, producer surplus and deadweight loss. (Remember 1 kilo tonne = 1,000 tonnes)(8 marks)

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#### BHM 101.3 - The demand and supply schedules for US wheat

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Posted On: 06/11/2017 09:03 AM
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