Question

When he ran for President in 2000, Al Gore said that American farmland was disappearing at an "alarming" rate and that soon it would be impossible to grow enough food on the remaining land to feed the entire country, which would mean the prospect of people not having enough to eat. His proposed solution was to have the government place restrictions on converting farmland to other uses, such as subdividing lots for building new homes.

Was Gore's assessment of the situation, along with his policy prescription, based upon accurate economic theory and analysis? Why or why not? (Note: For this question, we will assume that all food consumed in the USA is grown or produced here. Yes, I know we import food, but this question can be answered even with the assumption that we don't import any food.)

Answer 1

Gore's assessment of the situation is based upon accurate economic theory and analysis because disappearance of the farmlands in America will lead to leftwards shift of the aggregate supply curve of food in America. This will lead to increase in the price of food and reduction in the quantity demanded and supplied of food. This might lead to hunger for few people and some people might not have enough to eat. Thus, to prevent this situation , the government can place restrictions on converting farmland to other uses and this will prevent fall in the farmland in America and thus aggregate supply will not fall and hunger situation in the country can be prevented.

Thus, the policy suggestion is correct and restriction an prevent food shortage in the country.