In the United States and Western Europe, farmers are strong enough politically to persuade their governments to set price floors for many crops. In many less developed countries, governments that are worried about the standard of living of their urban populations impose price ceilings on food staples like rice and wheat. Use supply and demand curves to show how these policies can help to explain the food surpluses in the rich countries and the shortages in the poor countries.

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter5: Markets In Motion And Price Controls
Section: Chapter Questions
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  1. In the United States and Western Europe, farmers are strong enough politically to

persuade their governments to set price floors for many crops. In many less developed

countries, governments that are worried about the standard of living of their urban

populations impose price ceilings on food staples like rice and wheat. Use supply and

demand curves to show how these policies can help to explain the food surpluses in the rich

countries and the shortages in the poor countries.

 

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