I. Suppose the free market equilibrium price of rice in Thailand would be 100 baht per pound. But suppose the government institutes a price floor on rice at 140 baht per pound, by offering to buy up all excess rice at this 140 baht price. Then, when compared to the unregulated, free-market 100 baht market, state yes (Y), no (N), or maybe (M) for whether the following things

are likely to happen in Thailand. After your Y, N, or M answer, provide not more than two sentences of explanation of the reasoning behind your answer. If your answer is M, you can add an additional sentence for the conditions under which it is likely to happen or not happen.

A) The quality of rice in Thailand will increase.

B) The quantity of rice produced in Thailand will increase.

C) A black market will form where rice is traded illegally at

a price below 140 baht.

D) An excess supply of rice will be realized, forcing the government to purchase some rice, and either store it, give it away, or trash it.