You will analyze the justification and effectiveness of government subsidies. Find an example of an industry that is subsidized by the U.S. government and address the following:
- Explain why the U.S. government subsidizes the industry.
- Describe how the subsidy alters the market outcome (address issues like the production possibility curve, quantity supplied and demanded and price).
- Explain who gains and who loses from the government intervention. Address any beggar-thy-neighbor issues.
- Explain why you think the subsidy is or is not justified.