Question: Consider the following market demand and supply functions for wheat,

where Q _D is the quantity of wheat demanded (in metric tons), Q _S is the quantity of wheat supplied (in metric tons), P is the price of wheat ($/metric ton), P _B is the price of barley ($/metric ton), and Y is per capita disposable income ($).

1. Circle the best solution below. From the perspective of consumers of wheat, are wheat and barley substitutes, complements, or unrelated?
   SUBSTITUTES COMPLEMENTS UNRELATED
2. Circle the best solution below. From the perspective of consumers of wheat, is wheat considered a normal good, inferior good, or none of the above?
   NORMAL INFERIOR NONE
3. Calculate the change in quantity supplied when price decreases by $2. Be sure to also indicate the direction of the change.
4. Calculate the change in the demand for wheat when income increases by $1. Be sure to also indicate the direction of the change.
5. Circle the best solution below. Does a shortage or surplus exist when P=$100, P _B =$3 and Y=$1,000?
   SHORTAGE SURPLUS
   →
6. (3 points) Quantify the disequilibrium you identified in part e.
7. (2 points) Quantify the inefficiency generated by the disequilibrium in part e.

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