Answered: What was the major intent of the…

What was the major intent of the Freedom to Farm Act of 1996? Do you agree with the intent? Why or why not? Did the law succeed in reducing overall farm subsidies? Why or why not?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter31: Public Choice And Special Interet Group Politics

Section31.6: Constitutional Economics

Problem 1ST

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What was the major intent of the Freedom to Farm Act of 1996? Do you agree with the intent? Why or why not? Did the law succeed in reducing overall farm subsidies? Why or why not?

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Step 1: Define Farm Subsidies

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Step 2: Explain the FAIR Act

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Step 3: Analyze the effectiveness of the law in reducing subsidies

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Qd = 1,600 - 125P Qs = 440 + 165P Quantities are measured in millions of bushels; prices are measured in dollars per bushel. a. Calculate the equilibrium price and quantity that will prevail under a completely free market. b. Calculate the price elasticities of supply and demand at the equilibrium values. c. The government currently has a $4.50 bushel support price in place. What impact will this support price have on the market? Will the government be forced to purchase corn under a program that requires them to buy up any surpluses? If so, how much? 1四 "cause" causes
The government often meddles in markets, using price ceilings and price floors and taxes which move the market away from free market equilibrium. Should the government meddle in markets? When should it meddle? Should there be rent controls or other price ceilings? Should the government set a minimum wage be $15? Should the government control the price of life saving medicine, such as insulin? Should they set a price ceiling? Or use taxes? How does elasticity of demand affect who will pay the tax? What are some reasons that the government should meddle in markets using price controls and taxes?
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