Question

In recent​ years, the government of Pakistan has established a support price for wheat of about ​$0.22 per kilogram of wheat. At this​ price, consumers are willing to purchase 10 billion kilograms of wheat per​ year, while Pakistani farmers are willing to grow and harvest 19 billion kilograms of wheat per year. The government purchases and stores all surplus wheat. What are annual consumer expenditures on the Pakistani wheat​ crop? ​$ 2.20 billion ​(round your answer to two decimal places​) What are annual government expenditures on the Pakistani wheat​ crop? ​$ 1.98 billion ​(round your answer to two decimal places​) How​ much, in​ total, do Pakistani wheat farmers receive for the wheat they​ produce? ​$ 4.18 billion ​(round your answer to two decimal places​) Suppose that the market-clearing price of Pakistani wheat in the absence of price supports is equal to ​$0.18 per kilogram. At this​ price, the quantity of wheat demanded is 13 billion kilograms. In an unregulated​ market, how much is spent each year on wheat harvested in​ Pakistan? ​$ nothing

Answer 1

Market clearing price = $ 0.18 / kg

Market clearing quantity = 13 billion kg

Amount spent each year on wheat harvested = $ 0.18 × 13

= $ 2.34 billion.

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