Storage: With the intention of saving, holding placement of materials or products in a place and releasing them at a later stage when there is a high demand for the product in the market is called storage. Answer: The answers are as under- The consumer expenditure incurred on Pakistani wheat crop is $2billion per year. The annual government expenditure incurred on Pakistani wheat crop is $1.60 billion per year. Amount received by Pakistani wheat farmers is $3.60 billion per year. Explanation: Formula Used: Annual Expenditure/Income=Quantity x Price per kilogram Calculation: In the given case the price per kilogram of wheat is $0.20. Hence the expenditures and amount received by the farmers is calculated as under − The quantity that consumers are willing to purchase is 10 billion kilograms. Hence, the annual consumer expenditure is = Quantity x price per kilogram = 10 billion x $0.20 = $2billion As given in the question, the excess quantity will be purchased and stored by the government. Hence, the annual government expenditure is = Quantity x price per kilogram = 8 billion x $0.20 = $1.6billion The quantity that farmers are willing to grow and harvest is 18billion kilograms. Hence, the amount received by them will be = Quantity x price per kilogram = 18 billion x $0.20 = $3.60 billion

Question

Want to see the full answer?

Answer 1

Question

Chapter 4, Problem 9P

To determine

Concept introduction:

Storage: With the intention of saving, holding placement of materials or products in a place and releasing them at a later stage when there is a high demand for the product in the market is called storage.

Answer:

The answers are as under-

The consumer expenditure incurred on Pakistani wheat crop is $2billion per year.
The annual government expenditure incurred on Pakistani wheat crop is $1.60 billion per year.
Amount received by Pakistani wheat farmers is $3.60 billion per year.

Explanation:

Formula Used:

Annual Expenditure/Income=Quantity x Price per kilogram
Calculation: In the given case the price per kilogram of wheat is $0.20. Hence the expenditures and amount received by the farmers is calculated as under −

The quantity that consumers are willing to purchase is 10 billion kilograms. Hence, the annual consumer expenditure is
= Quantity x price per kilogram
= 10 billion x $0.20

= $2billion

As given in the question, the excess quantity will be purchased and stored by the government. Hence, the annual government expenditure is
= Quantity x price per kilogram
= 8 billion x $0.20

= $1.6billion

The quantity that farmers are willing to grow and harvest is 18billion kilograms. Hence, the amount received by them will be
= Quantity x price per kilogram
= 18 billion x $0.20

= $3.60 billion

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

A hospital charges $200 for a medical procedure, and 1,000 patients use the service. The hospital raises the price to $250, and the number of patients drops to 900. Calculate the price elasticity of demand (PED) and explain your answer. (show all working) Briefly explain how elasticity affects government health policies in the following cases: • Taxes on unhealthy products (cigarettes, alcohol, sugary drinks) • Subsidizing Preventive Care (e.g., vaccines, screenings) Drug Price Controls & Generic Substitutions Co-Payments & Insurance Design

Assume the United States is a large consumer of steel, able to influence the world price. DUS and SUS denote its demand and supply schedules in Figure 1. The overall (United States plus world) supply schedule of steel is denoted by SUS.+W. Figure 1 Import Tariff Levied by a Large Country Answer all questions (a-f) by referring to Figure 1 above. a) Calculate the free trade market equilibrium price, domestic consumption, and volumE Answer all questions (a-f) by referring to Figure 1 above. a) Calculate the free trade market equilibrium price, domestic consumption, and volume of steel imports by the US. [5 marks] b) Suppose the United States imposes a tariff (t) of $100 on each ton of steel imported. With the tariff, calculate the price of steel and the volume of steel imports by the US. [5 marks] c) Of the $100 tariff, how much is passed on to the US consumer via a higher price, and how much is borne by the foreign exporter? [5 marks] d) Calculate the tariff's deadweight welfare loss to…

1. A doctor quits his job, which pays $77,000 per annum, to open a non-governmental organization (NGO) to serve the needs of orphans. His annual expenses for the NGO amounts to $62,700 for food and daily supplies, $9,400 for maintenance, and $1,800 for books. What is his opportunity cost of opening the NGO? (Show working) 2. During the COVID-19 pandemic, hospitals worldwide faced severe resource constraints, including: a. Limited ICU beds b. Shortage of ventilators c. Insufficient doctors and nurses d. Lack of vaccines in early 2021 Governments and hospitals had to make critical decisions about who receives treatment first and how to allocate limited resources efficiently. In no more than 150 words and using core economic concepts of scarcity, choice and opportunity cost, how would you help your government make these critical decisions?