Suppose the export demand for wheat falls

Assignment Help Business Economics

Reference no: EM131238715

Much of the demand for U.S. agricultural output has come from other countries. In 1998, the total demand for wheat was Q=3244-283P. Of this, total domestic demand was Qd=1700-107P, and domestic supply was Qs=1944+207P. Suppose the export demand for wheat falls by 40 percent.

a. U.S. farmers are concerned about this drop in export demand. What happens to the free-market price of wheat in the United States? Do farmers have much reason to worry?

b. Now suppose the U.S government wants to buy enough wheat to raise the price to $3.50 per bushel. With the drop in export demand, how much wheat would the government have to buy? How much would this cost the government? Please do this step by step so I can understand how to solve this.

Reference no: EM131238715

Questions Cloud

Write out the linear budget equation : Assume that the world price of one unit of Flower (PF) is $2 per unit and the world price of a unit of Bread (PB) is $2 per unit and the citizens of the Home Country has a budget amount R = $1,600 million to spend on these two goods. Using the infor..

Pollution fees and marketable permits : Explain how the following two market-based incentives: Pollution fees and Marketable Permits provide a market based solution to Pollution in the U. S. Is this issue growing in importance? Why?

Airport baggage handling equipment : Airport baggage handling equipment can be purchased for $80,000 cash (now) or for $84,000 to be financed over 60 months at 0% interest (with annual payments, where the first payment is due at the time of purchase). The sales person states that at lea..

Define and graph your budget set in terms of leisure : You are willing to work up to 80 hours a week. You make $10(B + 1) an hour, where B is the second-to-last digit of your Student ID. Define and graph your budget set in terms of leisure (equal to non–worked hours) -Good 1- and ”money spent on every ot..

Suppose the export demand for wheat falls : Much of the demand for U.S. agricultural output has come from other countries. In 1998, the total demand for wheat was Q=3244-283P. Of this, total domestic demand was Qd=1700-107P, and domestic supply was Qs=1944+207P. Suppose the export demand for w..

Estimate the value of the firm : Rewarding insights, LLC. current annual profits are $20,000. If they anticipated a 2% growth rate in profits and a long-term interest rate of 3%, estimate the value of the firm.

?nd another bundle that gives her same level of satisfaction : Rachel’s preferences for goods x and y are represented by the following utility function: U(X,Y ) = X1/2.Y 1/2. Find the marginal rate of substitution. Comment if it is increasing, constant or decreasing in x. Graph the indi?erence curves correspondi..

Interested in the ordering of bundles : We saw in class that since we are only interested in the ordering of bundles, a positive monotonic transformation (one that does not change the order) of a utility function also represents the same preferences. Mathematically, a positive monotonic tr..

Project the amount in her pension plan at retirement : Jill starts working on her 23rd birthday with an annual saary of $57,000. She sets aside 4.5% of her salary at the end of each year for her pension plan, whch is matched by her employer. She hopes her retirement account can make 5.5% per year interes..

User Account

All Pages