Comparing an acreage allotment program versus a taxpayer-subsidized price-support program, the acreage allotment program

Question

Quizplus · Accepted Answer

An acreage allotment program limits the amount of crop that can be grown on a certain amount of land, while a taxpayer-subsidized price-support program provides farmers with a set price for their crops, regardless of market demand. The latter program can lead to overproduction and an excess supply of crops, which inevitably leads to surplus costs that are borne by taxpayers. An acreage allotment program, on the other hand, limits production to a level that matches market demand, which is likely to have a smaller cost on taxpayers. Therefore, Option B is the best choice.

Comparing an Acreage Allotment Program Versus a Taxpayer-Subsidized Price-Support Program