{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-09-13T01:39:13-04:00", "answer_date": "2024-09-13 01:39:13", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "2964276", "url": "\/study-help\/questions\/hello-i-have-started-my-new-semester-at-university-2964276", "question_creation_date_js": "2024-06-13T15:11:43-04:00", "question_creation_date": "Jun 13, 2024 03:11 PM", "meta_title": "[Solved] 1) Explain Figure 1. Particularly, explai | SolutionInn", "meta_description": "Answer of - 1) Explain Figure 1. Particularly, explain what the meaning of the figure is without considering price P**. Figure 1 U | SolutionInn", "meta_keywords": "1,figure,meaning,price,**,s,subsidies,reduce,african,exports,-,po", "question_title_h1": " 1) Explain Figure 1. Particularly, explain what the meaning of the figure is without considering price P**. Figure 1 U.S. Subsidies Reduce African Exports", "question_title": " 1) Explain Figure 1. Particularly, explain what the meaning of the", "question_title_for_js_snippet": "1) Explain Figure 1 Particularly, explain what the meaning of the figure is without considering price P Figure 1 U S Subsidies Reduce African Exports P Po Q Q Q Q US farm subsidies reduce the world price of this crop from P to P Exports from this African country fall from Qs Qp to 0 0 2) According to Bono, agricultural subsidies in the U S harm farmers in Africa Why What is exactly the welfare effect that is responsible for that outcome according to Figure 1 Think and explain it in terms of producer surplus 3) How exactly agricultural subsidies in the U S affect the U S market for crop Draw the corresponding demand supply diagram for the U S market for crop to explain your reasoning Alberto J APPLICATION 1 4 Supply and Demand According to Bono The unlikely 2002 trip to Africa by the Irish rock star Bono in the company of U S Treasury Secretary Paul O'Neill sparked much interesting dialogue about economics ' Especially intrigu ing was Bono's claim that recently expanded agricultural sub sidies in the United States were harming struggling farmers in Africa a charge that O'Neill was forced to attempt to refute at every stop A simple supply demand analysis shows that, overall, Bono did indeed have the better of the arguments, though he neglected to mention a few fine points Graphing African Exports Figure 1 shows the supply and demand curves for a typical crop that is being produced by an African country If the world price of this crop (P ) exceeds the price that would prevail in the absence of trade (Pp), this country will be an exporter of this crop The total quantity of exports is given by the distance Qs Qp That is, exports are given by the difference in the quan tity of this crop produced and the quantity that is demanded domestically Such exporting is common for many African coun tries because they have large agrarian populations and generally favorable climates for many types of food production Figure 1 U S Subsidies Reduce African Exports P S P P Pp QD Qb Q's Qs D Q U S farm subsidies reduce the world price of this crop from P to P Exports from this African country fall from 0 0 to 0 0 Cengage Learning this crop (P ) exceeds the price that would prevail in the absence of trade (Pp), this country will be an exporter of this crop The total quantity of exports is given by the distance Qs Qp That is, exports are given by the difference in the quan tity of this crop produced and the quantity that is demanded domestically Such exporting is common for many African coun tries because they have large agrarian populations and generally favorable climates for many types of food production In May 2002, the United States adopted a program of vastly increased agricultural subsidies to U S farmers From the point of view of world markets, the main effect of such a program was to reduce world crop prices This is shown in Figure 1 as a drop in the world price to P This fall in price would be met by a reduction in quantity produced of the crop to Q's and an increase in the quantity demanded to Op Crop exports would decline significantly So, Bono's point is essentially correct U S farm subsi dies do harm African farmers, especially those in the export business But he might also have pointed out that African consumers of food also benefit from the price reduction They are able to buy more food at lower prices Effectively, some of the subsidy to U S farmers has been transferred to African consumers Hence, even disregarding whether farm subsidies make any sense for Americans, their effects on the welfare of Africans is ambiguous QD D Kento Tanabe Qb Q's Q U S farm subsidies reduce the world price of this crop from P to P Exports from this African country fall from Qs Qp to Q's Qp Cengage Learning have a major effect in thwarting African exports Perhaps even more devastating are the large number of special mea sures adopted in various developed countries to protect favored domestic industries such as peanuts in the United States, rice in Japan, and livestock and bananas in the Euro pean Union Because expanded trade is one of the major avenues through which poor African economies might grow, these restrictions deserve serious scrutiny POLICY CHALLENGE Why do the United States and European countries subsidize farm output What goals do these countries seek to achieve by such programs (possibly lower food prices or higher Alberto J sidies in the United States were harming struggling farmers in Africa a charge that O'Neill was forced to attempt to refute at every stop A simple supply demand analysis shows that, overall, Bono did indeed have the better of the arguments, though he neglected to mention a few fine points Graphing African Exports Figure 1 shows the supply and demand curves for a typical crop that is being produced by an African country If the world price of this crop (P ) exceeds the price that would prevail in the absence of trade (Pp), this country will be an exporter of this crop The total quantity of exports is given by the distance Qs Qp That is, exports are given by the difference in the quan tity of this crop produced and the quantity that is demanded domestically Such exporting is common for many African coun tries because they have large agrarian populations and generally favorable climates for many types of food production In May 2002, the United States adopted a program of vastly increased agricultural subsidies to U S farmers From the point of view of world markets, the main effect of such a program was to reduce world crop prices This is shown in Figure 1 as a drop in the world price to P This fall in price would be met by a reduction in quantity produced of the crop to Q's and an increase in the quantity demanded to Q Crop exports would decline significantly P P Pp QD Qb Q's Qs S D U S farm subsidies reduce the world price of this crop from P to P Exports from this African country fall from Qs Qp to Q's Q Cengage Learning have a major effect in thwarting African exports Perhaps even more devastating are the large number of special mea sures adopted in various developed countries to protect favored domestic industries such as peanuts in the United States, rice in Japan, and livestock and bananas in the Euro Alberto J sidies in the United States were harming struggling farmers in Africa a charge that O'Neill was forced to attempt to refute at every stop A simple supply demand analysis shows that, overall, Bono did indeed have the better of the arguments, though he neglected to mention a few fine points Graphing African Exports Figure 1 shows the supply and demand curves for a typical crop that is being produced by an African country If the world price of this crop (P ) exceeds the price that would prevail in the absence of trade (Pp), this country will be an exporter of this crop The total quantity of exports is given by the distance Qs Qp That is, exports are given by the difference in the quan tity of this crop produced and the quantity that is demanded domestically Such exporting is common for many African coun tries because they have large agrarian populations and generally favorable climates for many types of food production In May 2002, the United States adopted a program of vastly increased agricultural subsidies to U S farmers From the point of view of world markets, the main effect of such a program was to reduce world crop prices This is shown in Figure 1 as a drop in the world price to P This fall in price would be met by a reduction in quantity produced of the crop to Q's and an increase in the quantity demanded to Q Crop exports would decline significantly P P Pp QD Qb Q's Qs S D U S farm subsidies reduce the world price of this crop from P to P Exports from this African country fall from Qs Qp to Q's Q Cengage Learning have a major effect in thwarting African exports Perhaps even more devastating are the large number of special mea sures adopted in various developed countries to protect favored domestic industries such as peanuts in the United States, rice in Japan, and livestock and bananas in the Euro consomcaly, Quen txporting la common t many MINGON COURT tries because they have large agrarian populations and generally favorable climates for many types of food production In May 2002, the United States adopted a program of vastly increased agricultural subsidies to U S farmers From the point of view of world markets, the main effect of such a program was to reduce world crop prices This is shown in Figure 1 as a drop in the world price to P This fall in price would be met by a reduction in quantity produced of the crop to 0 and an increase in the quantity demanded to 0 Crop exports would decline significantly So, Bono's point is essentially correct U S farm subsi dies do harm African farmers, especially those in the export business But he might also have pointed out that African consumers of food also benefit from the price reduction They are able to buy more food at lower prices Effectively some of the subsidy to U S farmers has been transferred to African consumers Hence, even disregarding whether farm subsidies make any sense for Americans, their effects on the welfare of Africans is ambiguous Other Barriers to African Agricultural Trade Agricultural subsidies by the United States and the European Union amount to over $500 billion per year Undoubtedly, they U S farm subsidies reduce the world price of this cystaro Kakia from P to P Exports from this African country fall from Os Op to O's Ob Ongage o have a major effect in thwarting African exports Perhaps even more devastating are the large number of special mea sures adopted in various developed countries to protect favored domestic industries such as peanuts in the United States, rice in Japan, and livestock and bananas in the Euro pean Union Because expanded trade is one of the major avenues through which poor African economies might grow these restrictions deserve serious scrutiny POLICY CHALLENGE Why do the United States and European countries subsidize farm output What goals do these countries seek to achieve by such programs (possibly lower food prices or higher incomes for farmers) Is the subsidization of crop prices the best way to achieve these goals ", "question_description": "

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<\/div><\/div><\/div><\/figure>", "transcribed_text": "1) Explain Figure 1. Particularly, explain what the meaning of the figure is without considering price P**. Figure 1 U.S. Subsidies Reduce African Exports P- Po Q Q Q. Q. US. farm subsidies reduce the world price of this crop from P to P** Exports from this African country fall from Qs-Qp to 0-0 2) According to Bono, agricultural subsidies in the U.S. harm farmers in Africa. Why? What is exactly the welfare effect that is responsible for that outcome according to Figure 1? Think and explain it in terms of producer surplus. 3) How exactly agricultural subsidies in the U.S. affect the U.S. market for crop? Draw the corresponding demand-supply diagram for the U.S. market for crop to explain your reasoning. Alberto J APPLICATION 1.4 Supply and Demand According to Bono The unlikely 2002 trip to Africa by the Irish rock star Bono in the company of U.S. Treasury Secretary Paul O'Neill sparked much interesting dialogue about economics.' Especially intrigu- ing was Bono's claim that recently expanded agricultural sub- sidies in the United States were harming struggling farmers in Africa a charge that O'Neill was forced to attempt to refute at every stop. A simple supply-demand analysis shows that, overall, Bono did indeed have the better of the arguments, though he neglected to mention a few fine points. Graphing African Exports Figure 1 shows the supply and demand curves for a typical crop that is being produced by an African country. If the world price of this crop (P*) exceeds the price that would prevail in the absence of trade (Pp), this country will be an exporter of this crop. The total quantity of exports is given by the distance Qs Qp. That is, exports are given by the difference in the quan- tity of this crop produced and the quantity that is demanded domestically. Such exporting is common for many African coun- tries because they have large agrarian populations and generally favorable climates for many types of food production. Figure 1 U.S. Subsidies Reduce African Exports P S P* P** Pp QD Qb Q's Qs D Q U.S. farm subsidies reduce the world price of this crop from P* to P**. Exports from this African country fall from 0-0 to 0-0 Cengage Learning this crop (P*) exceeds the price that would prevail in the absence of trade (Pp), this country will be an exporter of this crop. The total quantity of exports is given by the distance Qs-Qp. That is, exports are given by the difference in the quan- tity of this crop produced and the quantity that is demanded domestically. Such exporting is common for many African coun- tries because they have large agrarian populations and generally favorable climates for many types of food production. In May 2002, the United States adopted a program of vastly increased agricultural subsidies to U.S. farmers. From the point of view of world markets, the main effect of such a program was to reduce world crop prices. This is shown in Figure 1 as a drop in the world price to P**. This fall in price would be met by a reduction in quantity produced of the crop to Q's and an increase in the quantity demanded to Op. Crop exports would decline significantly. So, Bono's point is essentially correct-U.S. farm subsi- dies do harm African farmers, especially those in the export business. But he might also have pointed out that African consumers of food also benefit from the price reduction. They are able to buy more food at lower prices. Effectively, some of the subsidy to U.S. farmers has been transferred to African consumers. Hence, even disregarding whether farm subsidies make any sense for Americans, their effects on the welfare of Africans is ambiguous. QD D Kento Tanabe Qb Q's Q U.S. farm subsidies reduce the world price of this crop from P* to P**. Exports from this African country fall from Qs-Qp to Q's-Qp. Cengage Learning have a major effect in thwarting African exports. Perhaps even more devastating are the large number of special mea- sures adopted in various developed countries to protect favored domestic industries such as peanuts in the United States, rice in Japan, and livestock and bananas in the Euro- pean Union. Because expanded trade is one of the major avenues through which poor African economies might grow, these restrictions deserve serious scrutiny. POLICY CHALLENGE Why do the United States and European countries subsidize farm output? What goals do these countries seek to achieve by such programs (possibly lower food prices or higher Alberto J sidies in the United States were harming struggling farmers in Africa a charge that O'Neill was forced to attempt to refute at every stop. A simple supply-demand analysis shows that, overall, Bono did indeed have the better of the arguments, though he neglected to mention a few fine points. Graphing African Exports Figure 1 shows the supply and demand curves for a typical crop that is being produced by an African country. If the world price of this crop (P*) exceeds the price that would prevail in the absence of trade (Pp), this country will be an exporter of this crop. The total quantity of exports is given by the distance Qs Qp. That is, exports are given by the difference in the quan- tity of this crop produced and the quantity that is demanded domestically. Such exporting is common for many African coun- tries because they have large agrarian populations and generally favorable climates for many types of food production. In May 2002, the United States adopted a program of vastly increased agricultural subsidies to U.S. farmers. From the point of view of world markets, the main effect of such a program was to reduce world crop prices. This is shown in Figure 1 as a drop in the world price to P**. This fall in price. would be met by a reduction in quantity produced of the crop to Q's and an increase in the quantity demanded to Q. Crop exports would decline significantly. P* P** Pp QD Qb Q's Qs S D U.S. farm subsidies reduce the world price of this crop from P* to P**. Exports from this African country fall from Qs-Qp to Q's-Q Cengage Learning have a major effect in thwarting African exports. Perhaps even more devastating are the large number of special mea- sures adopted in various developed countries to protect favored domestic industries such as peanuts in the United States, rice in Japan, and livestock and bananas in the Euro- Alberto J sidies in the United States were harming struggling farmers in Africa a charge that O'Neill was forced to attempt to refute at every stop. A simple supply-demand analysis shows that, overall, Bono did indeed have the better of the arguments, though he neglected to mention a few fine points. Graphing African Exports Figure 1 shows the supply and demand curves for a typical crop that is being produced by an African country. If the world price of this crop (P*) exceeds the price that would prevail in the absence of trade (Pp), this country will be an exporter of this crop. The total quantity of exports is given by the distance Qs Qp. That is, exports are given by the difference in the quan- tity of this crop produced and the quantity that is demanded domestically. Such exporting is common for many African coun- tries because they have large agrarian populations and generally favorable climates for many types of food production. In May 2002, the United States adopted a program of vastly increased agricultural subsidies to U.S. farmers. From the point of view of world markets, the main effect of such a program was to reduce world crop prices. This is shown in Figure 1 as a drop in the world price to P**. This fall in price. would be met by a reduction in quantity produced of the crop to Q's and an increase in the quantity demanded to Q. Crop exports would decline significantly. P* P** Pp QD Qb Q's Qs S D U.S. farm subsidies reduce the world price of this crop from P* to P**. Exports from this African country fall from Qs-Qp to Q's-Q Cengage Learning have a major effect in thwarting African exports. Perhaps even more devastating are the large number of special mea- sures adopted in various developed countries to protect favored domestic industries such as peanuts in the United States, rice in Japan, and livestock and bananas in the Euro- consomcaly, Quen txporting la common t many MINGON COURT\" tries because they have large agrarian populations and generally favorable climates for many types of food production. In May 2002, the United States adopted a program of vastly increased agricultural subsidies to U.S. farmers. From the point of view of world markets, the main effect of such a program was to reduce world crop prices. This is shown in Figure 1 as a drop in the world price to P** This fall in price would be met by a reduction in quantity produced of the crop to 0 and an increase in the quantity demanded to 0. Crop exports would decline significantly So, Bono's point is essentially correct-U.S. farm subsi dies do harm African farmers, especially those in the export business. But he might also have pointed out that African consumers of food also benefit from the price reduction. They are able to buy more food at lower prices. Effectively. some of the subsidy to U.S. farmers has been transferred to African consumers. Hence, even disregarding whether farm subsidies make any sense for Americans, their effects on the welfare of Africans is ambiguous. Other Barriers to African Agricultural Trade Agricultural subsidies by the United States and the European Union amount to over $500 billion per year. Undoubtedly, they U.S. farm subsidies reduce the world price of this cystaro Kakia from P to P. Exports from this African country fall from Os Op to O's Ob Ongage o have a major effect in thwarting African exports. Perhaps even more devastating are the large number of special mea- sures adopted in various developed countries to protect favored domestic industries such as peanuts in the United States, rice in Japan, and livestock and bananas in the Euro- pean Union. Because expanded trade is one of the major avenues through which poor African economies might grow. these restrictions deserve serious scrutiny. POLICY CHALLENGE Why do the United States and European countries subsidize farm output? What goals do these countries seek to achieve by such programs (possibly lower food prices or higher incomes for farmers)? Is the subsidization of crop prices the best way to achieve these goals?", "related_book": { "title": "Microeconomics An Intuitive Approach with Calculus", "isbn": "538453257, 978-0538453257", "edition": "1st edition", "authors": "Thomas Nechyba", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/643.jpg", "uri": "\/textbooks\/microeconomics-an-intuitive-approach-with-calculus-1st-edition-643", "see_more_uri": "" }, "free_related_book": { "isbn": "3642758967", "uri": "\/textbooks\/adaptive-algorithms-and-stochastic-approximations-1st-edition-978-3642758966-161905", "name": "Adaptive Algorithms And Stochastic Approximations", "edition": "1st Edition" }, "question_posted": "2024-06-13 15:11:43", "see_more_questions_link": "\/study-help\/questions\/business-accounting-2024-September-20", "step_by_step_answer": "Lets go through the questions based on the information provided in the images 1 Explain Figure 1 Without Considering Price P Figure 1 Overview The gra...", "students_also_viewed": [ { "url": "\/why-are-depreciation-and-amortization-added-back-to-net-income", "description": "Why are depreciation and amortization added back to net income when calculating CFO using the indirect method? 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