There are some government programs that pay farmers not to plant wheat on part of their land. This would help farmers: A) by increasing total revenue but it hurts consumers. B) by increasing prices for wheat by increasing total revenue and it also helps consumers by lowering the price of wheat. C) since the government payment will reduce the costs of production and increase the supply of wheat. D) since the government payment will increase income to farmers and it helps consumers too by lowering the price of wheat.
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The government programs that pay farmers not to plant wheat on part of their land typically affect the supply of wheat in the market. The likely impact of such programs is:
D) Since the government payment will increase income to farmers and it helps consumers too by lowering the price of wheat.
When farmers are paid not to plant wheat, it reduces the overall supply of wheat available in the market. As a result, the reduced supply can lead to increased prices due to scarcity. However, the increased income to farmers via government payments may balance out the effects on the price by ensuring stable or lower prices for consumers despite the reduced supply.