Discuss the view that the provision of subsidies by the government on goods such as

agricultural products will always be beneficial to stakeholders

[15 marks]

Answers may include

definition of subsidy, stakeholders

diagram to illustrate subsidy showingimpact on market price, government spending producer revenue

explanation that the provision of subsidies benefits producers and consumers

examples of subsidies on agricultural products or other goods

synthesis and evaluation(discuss)

Discussion may include: the disadvantages of subsidies such as: opportunity cost to the

government, higher taxes to fund subsidies, difficulties in removing subsidies once

established, distortion of the market, creation of inefficiency, equity issues(eg some

consumers and producers will benefit more than others