Learning Activity 2

The demand and supply schedules for the wheat market are shown in the following table.

Price ($)	Quantity Demanded	Quantity Supplied
0.00	500	0
1.00	450	150
1.50	400	200
2.00	350	250
2.50	300	300
3.00	250	350
3.50	200	400
4.00	150	450
5.00	100	500

1. Graph the demand and supply curves. What is the market price and equilibrium quantity in this market?

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1. Suppose the local government enforces a price floor $3.0. Show in your diagram the effect on price and quantity exchanged.

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1. Suppose the local government enforces a price ceiling $1.5. Show in your diagram the effect on price and quantity exchanged.

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1. Suppose the local government enforces a price ceiling $4.0. Show in your diagram the effect on price and quantity exchanged.

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1. How a "good weather" and "increase in Canada population" would affect equilibrium price and equilibrium quantity of wheat in Canada. Show graphically the effect of these changes on wheat market in Canada.

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