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India has come under criticism for their agricultural export subsidies. The table below describes how much wheat would be produced, consumed, and exported by India
India has come under criticism for their agricultural export subsidies. The table below describes how much wheat would be produced, consumed, and exported by India with and without an export subsidy. Situation without Export Subsidy Situation with Export Subsidy World Price $6 per bushel $6 per bushel Export Subsidy 0 $1 per bushel India Price $6 per bushel $7 per bushel India Consumption (million bushels) 400 300 India Production (million bushels) 600 700 Exports (million bushels) 200 400 Use the above table to calculate and answer the following. Assume that supply and demand are straight lines. Chapter 11 of the textbook will be helpful in answering these questions. a. India consumers' loss from imposing the export subsidy. b. India producers' gain from imposing the export subsidy. c. The government subsidy payment loss. d. The net welfare effect on India
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