The impact of farm support programs to the economy

The impact of farm support programs to the economy

Consider the two attached case studies and answer the following questions"

Farm Subsidies

1. "Subsidizing the price of milk or other agricultural products is not very expensive considering how many consumers there are in the United States. Therefore there is little harmful effect from such subsidies." Evaluate this statement.
2. Subsidy programs are likely to have a number of secondary effects in addition to the direct effect on airy prices. What impact do you suppose farm subsidies are likely to have on the following:
a. Housing prices
b. Technological change in the dairy industry
c. The price of dairy product substitutes

Campaign Finance Reform

1. The motivation behind campaign finance reform was to limit the influence of special interests. In what sense could that legislation have the opposite effect?

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