THIS WEEK IN 251
251N12
FALL 2005
EDIT IN 14 POINT FONT
THIS IS A SHORT WEEK/THANKSGIVING BREAK THURSDAY
ABBREVIATED
AGRICULTURAL ECONOMICS CH
29
SIMPLE
AS SUPPLY AND DEMAND
FIRMS
FAMILY FARMS/CLEARLY PRICE
TAKERS
EVEN LARGE GROWERS AS PRICE TAKERS
INDUSTRY
LITTLE PRICE ELASTICITY OF
DEMAND
SHORT RUN INELASTIC SUPPLY
WEATHER CHANGES FUTURE SUPPLY
INELASTIC SUPPLY + ERRATIC SUPPLY =
VOLATILE PRICES
LONG
LAG FROM INVESTMENT TO SALES
ROLE
OF INSURANCE IN CAPITAL MARKET
APPLICATION: ELASTICITY OF DEMAND
EOD = PCT
dQ/PCT dP
THEREFORE
PCT
dP = PCT dQ/ EOD
SINCE
EOD IS LESS THAN ONE
PCT
dP IS MORE THAN PCT dQ
FARM POLICY
WHAT
IS THE GOAL?
WHO
GETS THE MONEY?
MINK
FARMERS
PRICE
SUPPORTS/CONTROLS/FLOORS
DEFICIENCY
PAYMENTS FOR THE SHORTFALL
CORN
CREATES
SURPLUS
PROBLEM:
GETTING RID OF THE SURPLUS
DONATING
SURPLUS EXPORTS THE PROBLEM
EUROPEAN
PILES OF CHEESE
PRICE FLOORS WITH ACREAGE SET-ASIDES
OTHER
OUTPUT RESTRICTIONS
TOBACCO IN NORTH CAROLINA
IMPORT
CONTROLS
SUGAR
EAU
CLAIRE DAIRY DISASTER
BEFORE REFRIGERATION
COST SUBSIDIES
MARGINAL
COST
SUBSIDIZED MARGINAL COST
EXAMPLE: IRRIGATION
SHOW
PRICE TAKING FIRM WITH
SUBSIDIZED
MC
POLICIES
DON’T ALWAYS COORDINATE
CLASSIC:
TOBACCO
TAX
PREFERENCES
SUBSIDIZED
INSURANCE
MORAL
HAZARD
FOOD PROCESSORS
ADM
(ARCHER-DANIELS MIDLAND)
CARGILL
MOSTLY
GIANTS AND PRICE SETTERS
PRICE
SETTERS AS BUYERS USE LESS AND PAY LESS
INTERNATIONAL
TRADE DISPUTES
VS
WORLD PRICE FOR SUGAR
VS
CANADIAN BEEF
VS
EUROPE
WINE
AND CHEESE
GENETIC
FOOD
MONOPOLY
VS
POOR COUNTRIES
DUMPING
THE EXTRA EXPORTS THE PROBLEM
FREE
TRADE VS FOREIGN AID