If it is so obvious that farm subsidies hurt consumers, why do such subsidies continue to be voted in by Congress? Concept Introduction: Subsidy is a form of compensation given to economically backward people either to the consumer or to the producer in order to bring them with the mainstream of the economy. It can be in the form of direct cash, compensation and so on. Export: The goods or service which is produced in the domestic country and sold to a foreign country is referred to as export. Rational Theory of Ignorance: It says that benefit of a policy implemented by the federal government is concentrated in few hands while the cost is spread over million people. Hence, the overhead cost is negligible while the benefit is huge.

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Chapter 23, Problem 2DQ

To determine

If it is so obvious that farm subsidies hurt consumers, why do such subsidies continue to be voted in by Congress?

Concept Introduction:

Subsidy is a form of compensation given to economically backward people either to the consumer or to the producer in order to bring them with the mainstream of the economy. It can be in the form of direct cash, compensation and so on.

Export:

The goods or service which is produced in the domestic country and sold to a foreign country is referred to as export.

Rational Theory of Ignorance:

It says that benefit of a policy implemented by the federal government is concentrated in few hands while the cost is spread over million people. Hence, the overhead cost is negligible while the benefit is huge.

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