**Explaining the Impact of a US Subsidy for Domestic Corn Farmers**This diagram outlines how a US subsidy for domestic corn farmers can affect different groups within the economy. Each group is impacted in distinct ways:1. **Domestic Consumers (US Consumers):** - **Impact:** Benefit from an increased supply of cheaper corn. - **Consideration:** The funds for subsidies come from taxpayer dollars, potentially affecting the production of other products.2. **Foreign Producers:** - **Impact:** Face unfair competition as they cannot compete with the artificially lowered prices of corn due to subsidies.3. **Domestic Producers:** - **Impact:** Experience reduced costs of production, enabling them to supply more corn.4. **US Government:** - **Impact:** Gains from providing support to US producers. - **Consideration:** Subsidies can create long-term political and economic challenges, as they are difficult to remove.Each group in the economy responds differently to government subsidies, reflecting a balance of economic benefits and challenges.

Subsidy: A subsidy, often known as a government incentive, is a type of financial assistance or support given to a particular economic sector with the goal of supporting economic and social policies. Although most usually associated with government assistance, the phrase subsidy can refer to any sort of assistance, such as that provided by NGOs or as implicit subsidies. A subsidy is a monetary transfer from the government to a third party. It causes the price of subsidized goods to drop. The goal of a subsidy is to improve society's well-being.In the given question, a subsidy on US corn farmers would affect each group of the economy like the consumers, producers, government, and foreign producers. Domestic consumers will benefit as with subsidy for farmers there will be an increase in the supply of corn at cheaper prices. The consumer surplus will also increase as the motive of the subsidy is to increase the number of goods sold at lower prices. So the first point matches with domestic consumers. i.e. Benefit from increased supply/cheaper corns. However, taxpayer dollars are being used to fund subsidies which may interfere with the production of other goods. With the imposition of subsidy, the tendency to compete with artificially cheaper corn vanishes thus Foreign producers find it as unfair competition. The second point matches with the foreign producers. For the domestic producers, the cost of production declines with the imposition of subsidies on corn. This benefits the domestic producers as well. So the third point matches with Domestic producers. The US government is benefited from the domestic producer's support as they are happy to sell more and produce at the low cost of production but it would be difficult for the government to remove subsidy which will create economic and political difficulties. Thus the last point matches with the US Government.

Business

Economics

Explain how a US Subsidy for domestic corn farmers would affect each group in the economy. Benefit from an increased supply/ cheaper corn. However, taxpayer dollars are being used to fund subsidies which may interfere with the production of other products Unfair competition, cannot compete with artificially cheaper corn. Reduces costs of production so they can supply more corn. Benefits from support from US producers, but subsidies are hard to remove creating political and economic difficulties : Foreign Producers : US Government :: Domestic Producers :: Domestic Consumers (US consumers)

Explain how a US Subsidy for domestic corn farmers would affect each group in the economy. Benefit from an increased supply/ cheaper corn. However, taxpayer dollars are being used to fund subsidies which may interfere with the production of other products Unfair competition, cannot compete with artificially cheaper corn. Reduces costs of production so they can supply more corn. Benefits from support from US producers, but subsidies are hard to remove creating political and economic difficulties : Foreign Producers : US Government :: Domestic Producers :: Domestic Consumers (US consumers)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

00 7 F. PRICE (Dollars per ton) 4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for soybeans in Honduras. The world price (Pw) of soybeans is $530 per ton and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of soybeans and that there are no transportation or transaction costs associated with international trade in soybeans. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. 2. Domestic Demand Domestic Supply 770 740 710 680 650 620 06 P, 530 MacBook Pro Search or type URL 4. 51 9.
Import demand is given by A by the difference between the demand for a good and the supply of a good in the world market. B the import quota C the difference between the domestic demand for a good and the domestic supply for a good. D the difference between the domestic supply for good and the domestic demand for a good
Government standards for products sold in the domestic market can have the effect of protecting domestic producers from foreign competition. True False
A particular metal is traded in a highly competitive world market at a world price of $11.2 per ounce. Unlimited quantities are available for import into Canada at this price. The supply of this metal from domestic Canadian producers can be represented by Qs = 322 + 52P and the demand for the metal in Canada is Qd = 2589 - 74P, where Qs and Qd are in units of million ounces and P is the price per ounce. The Canadian government plans to impose an import quota of 310 million ounces per year. What is the net domestic loss to the Canadian economy as a result of the import quota? Answer: $ __________million
None
Write a 10 page paper for an international economics class. The topic is the Effects of the U.S imposing tariffs on Chinese steel imports on the American economy, particularly the steel industry and jobs in that industry. Include analysis on the effect of U.S steel prices, jobs, welfare effects (consumer and producer surplus).
A large enough production subsidy can turn an imported product into an exportable product. A) false B) true
If a large country pays a subsidy to its producers of a product, Group of answer choices Foreign countries that are net exporters of the product lose. Foreign consumers lose. Foreign producers gain. Foreign countries that are net importers of the product lose.
Climate change endangers the Philippines' food security. What impact these changes have on the country's agricultural and fishing industries
Explain how a US QUOTA on foreign dairy would affect each group in the economy. Use the picture below to answer the question, each word is only used once.
Tariffs and quotas are costly to consumers because О Multiple Choice consumers have to switch to higher-priced domestic goods. the price of the imported good falls. the supply of the imported good increases. import competition increases for domestic goods.
Domestic Demand Function: p= 80-4Q Domestic Supply Function: p= 20+2.5Q There was an international trade world price of $30 and now it dropped to $20 how will that decline the producer surplus?