Question

Consider a specific example of the special-interest effect. In 2012, it was estimated that the total value of all corn-production subsidies in the United States was about $3 billion. The population of the United States was approximately 300 million people that year.
A. On average, how much did corn subsidies cost per person in the United States in 2012?
B. If each person in the United States is willing to spend only $0.50 to support efforts to overturn the corn subsidy, and if antisubsidy advocates can only raise funds from 10% of the population, how much money will they be able to raise for their lobbying efforts?
C. If the recipients of corn subsidies donate just 1% of the total amount that they receive in subsidies, how much could they raise to support lobbying efforts to continue the corn subsidy?
D. By how many dollars does the amount raised by the recipients of the corn subsidy exceed the amount raised by the opponents of the corn subsidy?

Answer 1

Answer:

A) $10 per person

B) $15000000

C) $30000000

D) $15000000

Explanation:

A) Cost of corn subsidies per person in the United States in 2012 = 3 billion/300 million = 3000000000/300000000 = $10 per person

B) We are told that 10 percent of 300 million population are those willing to provide funding. Thus;

Number of people providing funding = 10% × 300 million = 30,000,000

Each of these 30,000,000 people are willing to only provide $0.50.

Thus;

total funding raised for their lobbying efforts = $0.50 × 30,000,000

total funding raised for their lobbying efforts = $15000000

C) We are told that the recipients of corn subsidies donated just 1% of the total amount which they received via subsidies. Thus;

Amount raise to support lobbying efforts to continue the corn subsidy =

1% × $3 billion = $30000000

D). the difference between which the amount raised by the recipients of the corn subsidy exceeds that of the amount raised by the opponents of the corn subsidy = $30000000 - $15000000 = $15000000