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Sex, Drugs, and Economics By: Diane Coyle Chapter 6 Food Fights Helping Lame Ducks to Waddle What does the Author say? • In the United States $100 billion a year is given in support to farmers, that is about $370 per person. • There are no other industries that receive as much as agricultural. • Agricultural gets about 22% of subsidy’s in the United States. • So who pays the subsidy? The citizens, as taxpayers and as buyers of food. • The effect of a tax is between 25 and 35 percent on food prices due to government price support and import restrictions. • So why do farmers complain about being on the brink of bankruptcy? • One reason is because of consumer taste. Consumers have a more varied in taste and have grown used to production of everything being available every season. • They are used to the varied of food regardless of the high cast of importing such goods. • Common sense states exports are better then imports. Countries are competing against each other in order to increase exports. • Economist say that benefits arrive from importing more things at a lower price, exporting is just to pay for the imports. All countries gain from trade, no one loses. • These difference are because economist care more about the people, not having the biggest car industry or richest farmers. • Basic principal is that countries should export products in which they have comparative advantage. • International trade is just a way to get technology and resource of another country, trade is always a win-win situation for the consumers. • Farmers should be easily taken off of import protection, something that low income families would appreciate, their food bills can make up half of their family budget, they would have more to spend on services and goods produced by other industries. • Not many people realize how much money they really are spending on food because of subsides. • Just think about how much more you can do with an extra $25 to $50 a week. Economic Concepts • • • • • Cost of Production Supply and Demand Tax subsidy’s International Trade GDP My Opinion • Many consumers are not aware of the intense subsidy’s given to farmers. The consumers are being taken for granted and having to pay more then necessary for food. Although food supply is high consumers are still paying for the subsidy through taxes and having to purchase the food from stores, they are paying twice for the same amount of food bought in one shopping trip. Consumers need to be aware of what is going on in the government and do something about it.