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Suppose you are the Prime Minister of India and your country is experiencing a widespread famine. As a humanitarian response to the crisis, the US Congress enacts the following incentive programs; (1) The US government will impose a temporary legal price floor on a select group of producers of US farm goods. (2) It will also offer the option for a percentage of these farmers to "set aside" their land in support of the crisis. However, the participating US farmers must agree that all the goods they produce during this program must go directly to the Indian famine relief. Using a single competitive Supply/Demand diagram of the US Farm Market (and brief verbal explanations):
(a) Indicate the increase in Demand for US farm goods caused specifically by the Indian famine, ceteris paribus.
(b) Set the new legal price floor and indicate any economic problem this may create.
(c) Show the effect of the Set Aside program.
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