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4. Consider the product market for Winter Wheat. If the Government has established a price floor and intends to purchase all surplus wheat draw the probable demand and supply curves and identify the equilibrium price and quantity demanded. (a) Determine the cost to the government to buy all the surplus wheat during a bumper crop year (b) An alternative program wil1 pay farmers to restrict acreage production. Explain how this alternative could result in the same price floor by shifting the appropriate curve (c) The President has proposed massive loan guarantees to a certain war-ravaged Balkan country for the purchase of staples such as agricultural goods. Should either the subsidy or the restriction program be continued?

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