Economics lesson: America’s farmers have their hands tied as the world braces for a wheat shortage

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This teacher-selected article with suggested questions is part of the Financial Times Free Schools Access Program. Details/registration here.

Specification:

  • Price mechanism, supply and demand, price elasticity of supply, price elasticity of demand

Click to read the article below and then answer the questions:

U.S. farmers have their hands tied as the world braces for a wheat shortage

  • “Dumping the economic incentives offered by Chicago wheat prices which hit $13.40 a bushel this month, a record high.” Regarding the allocation of resources, explain how the price acts as a signal

  • Explain why high wheat prices do not encourage farmers to increase their acreage

  • “Russia’s attack on Ukraine has disrupted wheat exports from both countries, raising fears of food shortages in import-dependent countries.” Using a supply and demand diagram, analyze the impact on the price of wheat

  • Compare the yields of the world’s top 5 producers of wheat and meslin

  • “The world grain market typically reacts to shortages in one part of the world by exploiting other regions that have a surplus.” Using a diagram, analyze the typical market response to a shortage

Gavin Clarke, Emmanuel College

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