Question

It is argued that US Food Aid:

is a cost-effective way to assist the world's poor

is a side-product of providing large corporations with subsidies

results from free market food surpluses in the US

results from a US system of price ceilings on many agricultural goods.

A price ceiling above the equilibrium price will

result in the demand curve shifting left

result in a surplus

result in anyone willing and able to buy the good to be able to buy it with no surplus

result in a shortage

Answer 1

The price control is restrictions on prices by government to maintain affordability of essential product, to combat inflation or to ensure a minimum income for the producers and suppliers of the good. The price controls can be of two types, price floor and price ceiling. The price celling is restricting price below equilibrium price to ensure the affordability of the good. Price floor is restricting price above equilibrium price to ensure minimum income for the producers and suppliers of the good.

The US food Aid system help serving food to those in need all over the world. The system take the surplus US food and serve them to the people of other countries without any extra charges.

Therefore, the correct options are:

• results from free market food surpluses in the US
• result in a surplus