Table 4-4 Table 4-4 Above Contains Information About the Wheat Market. Answer

question 13

Essay

Table 4-4

Table 4-4 above contains information about the wheat market. Answer the following questions based on this table.
-Refer to Table 4-4. An agricultural price floor is a price that the government guarantees farmers will receive for a particular crop. Suppose the federal government sets a price floor for wheat at $21 per bushel.
a.What is the amount of shortage or surplus in the wheat market as result of the price floor?
b.If the government agrees to purchase any surplus output at $21,how much will it cost the government?
c.If the government buys all of the farmers' output at the floor price,how many bushels of wheat will it have to purchase and how much will it cost the government?
d.Suppose the government buys up all of the farmers' output at the floor price and then sells the output to consumers at whatever price it can get. Under this scheme,what is the price at which the government will be able to sell off all of the output it had purchased from farmers? What is the revenue received from the government's sale?
e.In this problem we have considered two government schemes: (1)a price floor is established and the government purchases any excess output and (2)the government buys all the farmers' output at the floor price and resells at whatever price it can get.Which scheme will taxpayers prefer?
f.Consider again the two schemes.Which scheme will the farmers prefer?
g.Consider again the two schemes.Which scheme will wheat buyers prefer?

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Definitions:

Stock Turn Rate

A measure of how many times inventory is sold or used over a certain period, indicating the efficiency of inventory management.

Invested

The act of committing money or resources to a project, entity, or asset in the expectation of receiving future returns.

Marketing Plan

A comprehensive document or blueprint outlining an organization's advertising and marketing efforts for the coming period, including strategies, targets, and actions.

Bullet Points

A formatting style in documents and presentations used to list items, features, or points in a concise, easily readable manner.