Question: Suppose during 2002, wheat farmers in Canada and Australia experienced drought. As a result, the amount of wheat harvested in Canada and Australia went to zero (there was a decrease in the amount of suppliers to the world wheat market).

a. Draw a supply-demand graph to show the equilibrium in the world wheat market in a normal year.

b. Use your graph to illustrate the effects of the smaller harvests in Canada and Australia, assuming that other wheat-growing nations experienced normal growing conditions (can be done on the graph for part a, just label the part b depiction)

c. What do you predict happened to the price of wheat and the quantity bought and sold in 2002? Why?

d. What do you predict happened to the price of bread in 2002? Why?