Price Supports in Agriculture Have Been Criticized Because They

question 170

Multiple Choice

Price supports in agriculture have been criticized because they

• A) have hastened the exodus of labor from agriculture.
• B) subsidize consumers at the expense of farmers.
• C) help large farmers more than small farmers.
• D) create product shortages.

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Definitions:

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one product for another more affordable one.

Competitive Firm

A competitive firm is a business that operates in a market where there are many sellers and buyers, the product offered is similar, and the firm can only be a price taker, not a price maker.

Monopolist

A single seller in a market with no close substitutes for the product or service offered, possessing significant market power.