Assume That Flooding Has Destroyed the Wheat Crops in Many

question 85

Essay

Assume that flooding has destroyed the wheat crops in many countries throughout the world, but not in Australia. Using demand and supply graphs, and your knowledge of elasticities, show the effect this would have on:
(a) the equilibrium price of wheat in Australia
(b) the equilibrium quantity of wheat in Australia
What would be the effect on Australian wheat farmers' incomes?

---

Definitions:

Average Rate

The mean value of rates over a specified period or under certain conditions.

Mortgage Rate

The interest rate charged on a mortgage, typically expressed as an annual percentage.

GST

Goods and Services Tax, a type of value-added tax imposed on the majority of goods and services that are sold within the country for local use.

Supplies

Materials and goods held for use in the production process or office operations, often considered short-term assets in financial accounting.