Asked by Katelyn Tilden on Jul 14, 2024
Verified
Farm programs such as those of the United States and the European Union
A) are consistent with free world trade in agricultural products.
B) cause a misallocation of agricultural resources internationally.
C) cause the United States and the European Union to underproduce, while other nations overproduce, farm products.
D) raise productivity in developing nations.
Misallocation
Misallocation refers to an inefficient allocation of resources, where goods or services are not distributed or allocated according to an optimal pattern, often leading to a loss of economic value.
Agricultural Resources
Inputs used in the production of agricultural goods, such as land, labor, capital, and raw materials.
Free World Trade
The international exchange of goods and services without restrictive tariffs, quotas, or other trade barriers.
- Comprehend the worldwide consequences of local farm initiatives on the allocation of agricultural assets.
Verified Answer
MG
Maria GaytanJul 21, 2024
Final Answer :
B
Explanation :
Farm programs in the United States and the European Union often involve subsidies and protections that distort market prices and trade flows, leading to a misallocation of agricultural resources on a global scale. These policies can encourage overproduction in subsidized regions and make it harder for producers in other countries to compete, thus affecting the efficient allocation of resources.
Learning Objectives
- Comprehend the worldwide consequences of local farm initiatives on the allocation of agricultural assets.