subsidies and farmers, etc

[daj224]

ok, rdg 15 is pretty cool b/c it talks about farmers and drugs and alcohol. i like all that stuff...

confised on subsidies, they say that they are inefficient, as are quotas.


are subsidies inefficient b/c the govt reduces costs (negative tax) for farmers so that farmrs can produce more and lower prices? is that the govts motivation?

sorry if this is a dumb question.

subsidies have a negative global effect b/c farmers elsewhere get hit by the oversupply here in the US that subsidies cause? am i getting it?

thanks

 

[gogiants]

the motivation of the gvt is always smth vague for me
but here additional help leads to the overproduction --> MC>MB --> nonefficient use of resources; they should've produced smth else to achieve better return

 

[zizou]

subsides are inefficient because they move away from EQ.

with say a $30 subsidy, the Q increases by 30, the new EQ price drops, and the farmer receives the new EQ price + subside amount (30).

so the gov't helps the farmers.

(i think that's right....)

so much to review...sigh...