The seasonal proration marketing program for raisins, with which we are now concerned, became effective on September 7, 1940. This provided that the program committee should classify raisins as "standard," "substandard," and "inferior"; "inferior" raisins are those which are unfit for human consumption, as defined in the Federal Food, Drug and Cosmetic Act, 21 U.S.C. 301et seq.The committee is required to establish receiving stations within the zone to which every producer must deliver all raisins which he desires to market. The raisins are graded at these stations. All inferior raisins are to be placed in the

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*348"inferior raisin pool," to be disposed of by the committee "only for assured by-product and other diversion purposes." All substandard raisins, and at least 20 per cent of the total standard and substandard raisins produced, must be placed in a "surplus pool." Raisins in this pool may also be disposed of only for "assured by-product and other diversion purposes," except that under certain circumstances the program committee may transfer standard raisins from the surplus pool to the stabilization pool. Fifty per cent of the crop must be placed in a "stabilization pool."

additional questions

1 Explain this statement: "If resources were unlimited and freely available, there would be no subject called economics."

2 Comment on the following statement from a newspaper article: "Our junior high school serves a splendid hot meal for $1 without costing the taxpayers anything, thanks in part to a government subsidy."

3 Critically analyze: "Wants arent insatiable. I can prove it. I get all the coffee I want to drink every morning at breakfast." Explain: "Goods and services are scarce because resources are scarce." Analyze: "It is the nature of all economic problems that absolute solutions are denied us."

4 What are economic resources? What are the major functions of the entrepreneur?

25 (Key Question) Why is the problem of unemployment a part of the subject matter of economics? Distinguish between allocative efficiency and productive efficiency. Give an illustration of achieving productive, but not allocative, efficiency.