The problem is as follows:
In the 2012 fiscal year, $74.6 billion in food assistance was distributed to 47.7 million Americans through the Supplemental Nutrition Assistance Program (SNAP). This represents about 12.5% of the U.S. population and about $135 per person per month. Aid can be used for prepackaged edible foods, not simply food staples (bread, beans, fruit, vegetables, rice, etc.)
A bill is being prepared for Congress to consider that would limit the types of products that could be bought via the SNAP program to food staples. For example, families will not be able to buy soft drinks and candy with the SNAP program anymore. This bill would have impacts on several different economic variables.
You are an intern for a U.S. Congressman. Prepare a 2-3 page memo with graphs and references for your Congressman that explains in economic terms the impact of this bill. Analyze the impacts on the following variables if the bill is passed. Using economic theory (graphs and equations) and short sentences explain the likely impacts in the short and long run on:
1. Price and quantity of rice sold in the U.S.
2. Price and quantity of sugar sold in the U.S.
3. Price and quantity of wheat exported out of the U.S.
4. Price and quantity of farm land for sale (for growing wheat and corn) in the Midwest.