The figure below represents the domestic market for wheat in a small country. Imports of wheat are prohibited. Price ($ per bushel) $180 $160 0 40 60 $1 billion. $2.2 billion. $300 million. 120 $200 million. 150 With an export subsidy of $20 per bushel, the production effect of the export subsidy amounts to Sa (domestic supply curve) World price Da (domestic demand curve) Quantity (millions of bushels)
The figure below represents the domestic market for wheat in a small country. Imports of wheat are prohibited. Price ($ per bushel) $180 $160 0 40 60 $1 billion. $2.2 billion. $300 million. 120 $200 million. 150 With an export subsidy of $20 per bushel, the production effect of the export subsidy amounts to Sa (domestic supply curve) World price Da (domestic demand curve) Quantity (millions of bushels)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The figure below represents the domestic market for wheat in a small
country. Imports of wheat are prohibited.
Price
($ per bushel)
$180
$160
0 40
60
$1 billion.
$2.2 billion.
$300 million.
120
$200 million.
150
Sa (domestic supply curve)
With an export subsidy of $20 per bushel, the production effect of the
export subsidy amounts to
-World price
Da (domestic demand curve)
Quantity
(millions of bushels)
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