Chapter 14: Farm Policy

Agriculture

________ has moved from an industry of primarily rural family farms to an increasingly specialized business with a high degree of technological sophistication and high levels of productivity.

subsidy

A(n) ________ is a program of financial or other assistance given to a business or industrial sector.

Supply restrictions

________ raise the prices of agricultural goods by reducing their supply.

price support

A(n) ________ is a policy aimed at preventing the price of a given good of service from falling below a target level.

Two characteristics that contributed to government's long-standing involvement in agricultural markets

The first is the long-term decline in agricultural employment
The second is the inelastic nature of the demand for agricultural products.

price floor

A price floor is minimum amount that can be legally charged for a good or service.