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

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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

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