Instructions: This problem set asks you to apply what you've learned about nutrition targeting to understand some real-world issues. Please wr-ite answers that are short and to the point. Some of the questions can be answered by drawing a graph. Please make sure you add an explanation of any image or graph. (It may be easiest to draw out graphs by hand and scan/screenshot it to submit it.) In your response please ensure that your answers are clear and unambiguous.

Questions:

1. In West Africa most people consume salt in the form of rock salt from the many salt mines in the area (500 years ago this was the region's most lucrative export). That means they don't consume regular table salt that can be fortified with iodine to prevent goiter. Goiter is a major health problem in the region with as much as 28% of the population in Africa suffering from it and the problem is worse in rural areas.

a. If you wanted to fortify a food to address the goiter problem, what kind of food would you want to choose? What are the important criteria you would use for choosing that food.

b. Nestle makes a very popular spice addition that most urban cooks in West Africa include in their sauces, the Maggi Cube (https://www.nestle-cwa.com/en/ask-nestle/products-brands/what-is-in-the-maggi-cube#:~:text=Maggi%20cubes%20are%20made%20from,cassava%2C%20but%20fermented%20soy%20beans.), which contains iodized salt. How does this d-o at targeting the goiter problem in West Africa? Is there a policy you could conceive of to help make it more effective?

2. In 2023 global rice prices spiked to an 11 year high, rising 21% over the 2022 levels. Rice is a staple of the Senegalese diet for rich and poor in both rural and urban areas, with the average Senegalese eating close to 200 pounds of rice per year. In terms of income elasticity, rice is a normal good in Senegal. The last time rice prices spiked there were food riots in Senegal. Over 70% of the rice consumed by the Senegalese is imported, so the world price of rice sets the local Senegalese price.

a. The government of Senegal is considering artificially lowering the price of rice for consumers by setting a maximum price for rice that is at the 2022 price level. Draw out how this would affect supply and demand in the Senegalese rice market. What are the costs and benefits of setting a maximum price for rice? Note that the world price of rice is determined by the amount of exports from Thailand, Vietnam, the US and not affected by Senegalese policy. What would happen to overall rice consumption?

b. How would the price ceiling on rice d-o at targeting for maintaining or improving the nutrition of various sectors of Senegalese society? Who would benefit the most or the least?

c. The Senegalese Minister of Agriculture proposes an alternative plan: increase domestic production of rice with a new rice seed variety that produces 20% more rice for the same land and labor.

Assuming all Senegalese rice producers adopt this new seed, draw the new supply curve and new equilibrium between supply and demand for rice. (Examples are shown) Is it possible that the new rice seed lowers the rice price to same leve as the price ceiling? Explain your answer clearly

HOW ACHIEVE HIGHER FOOD SUPPLY? Price Supply Price Supply Supply curve with Psubsidized subsidized input P* p* New P* Demand Demand QDemanded* Supplied Quantity Q' New Q' Quantity Price ceilings Supply improvement-> It is not easy to do at allTWO MAIN WAYS OF SUPPLY IMPROVEMENT 1. Expanding supply by Subsidizing inputs 2. Expanding supply with new technologies (Decreasing costs) (Increase efficiency) Supply and Demand Curves: w/ new technology EXPANDING SUPPLY WITH A SUBSIDIZED Price Supply INPUTS (E.G. Supply curve with subsidized input FERTILIZER) 1. Subsidized input shifts out the supply P* curve in a parallel fashion 2. Generates new supply and demand New P* equilibrium 3. Prices go down and quantities consumed go up. 1. Consumers unambiguously better Demand off, get more at a lower price 2. Farmers/ producers may or may not New Q* Quantity be better off depending on elasticities 3. Government bears the cost of the subsidySupply and Demand Curves: w/ new technology EXPANDING Price Supply SUPPLY WITH A Supply curve with new technology NEW TECHNOLOGY P* 1. New technology shifts out the supply curve New P* 2. Generates new supply and demand equilibrium 3. Prices go down and quantities Demand consumed go up. a) Consumers: Better off (more at New Q* Quantity lower price) b) Farmers /Producers: Depends on elasticities1. Fortification to Address Goiter Problem in West Africa:a. To address the goiter problem in West Africa, choosing a food that is widely consumed and easily fortifiable would be ideal. Staple foods like rice, wheat flour, or maize flour are good options as they are consumed in large quantities by the population. The important criteria for choosing the food would include its popularity and widespread consumption, ease of fortification without altering taste or texture significantly, and nutritional compatibility with iodine fortification.b. Maggi Cube, being a popular spice addition in urban West African cooking, presents an opportunity for iodine fortification. However, its effectiveness in targeting the goiter problem depends on the extent of its usage and reach, especially in rural areas where the goiter problem is more prevalent. To make it more effective, a policy could involve mandatory iodization of salt used in Maggi Cube production, ensuring consistent and adequate iodine levels in the product. Additionally, educational campaigns highlighting the importance of using iodized Maggi Cube could raise awareness and encourage its consumption for addressing iodine deficiency. 2. Effects of Artificially Lowering Rice Prices in Senegal:a. Artificially lowering the price of rice in Senegal to the 2022 level would create excess demand at that price point, leading to shortages as local producers may find it unprofitable to supply rice at that price. The government would need to subsidize rice producers to maintain supply levels, incurring costs. Overall rice consumption would likely increase due to the lower price, benefiting consumers in the short term.b. The price ceiling on rice could help maintain or improve the nutrition of various sectors of Senegalese society by ensuring affordable access to a staple food. Those with lower incomes would benefit the most as they spend a larger portion of their income on food. However, if the price ceiling leads to supply shortages or quality deterioration due to decreased profitability for producers, the nutritional quality of rice available in the market may suffer, potentially harming consumers' health in the long term.c. If all Senegalese rice producers adopt the new rice seed variety that produces 20% more rice for the same land and labor, the supply curve for rice would shift to the right, indicating an increase in supply. The new equilibrium between supply and demand would depend on various factors such as consumer preferences, production costs, and market dynamics. It's possible that the increased supply resulting from the new rice seed could lower the rice price, but whether it lowers the price to the same level as the price ceiling would depend on the effectiveness of other policies and market conditions