In 2009, it was estimated that the total value of all corn-production subsidies
ID: 1207292 • Letter: I
Question
In 2009, it was estimated that the total value of all corn-production subsidies in the United States totaled about $4 billion. The population of the United States was approximately 300 million people that year. a. On average, how much did corn subsidies cost per person in the United States in 2009? (Hint: A billion is a 1 followed by nine zeros. A million is a 1 followed by six zeros.) Instructions: Round your answer to 2 decimal places.$ per person. b. If each person in the United States is only willing to spend $0.40 to support efforts to overturn the corn subsidy, and if antisubsidy advocates can only raise funds from 20 percent of the population, how much money will they be able to raise for their lobbying efforts? Instructions: Round your answer to 1 decimal place. $ million. c. If the recipients of corn subsidies donate just one percent of the total amount that they receive in subsidies, how much could they raise to support lobbying efforts to continue the corn subsidy? Instructions: Enter your answer as a whole number. $ million. 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? Instructions: Round your answer to 1 decimal place. $ million.
Explanation / Answer
Total Population: 300 million
Total Corn production subsidies: $4 billion
Ans a) 300 million people's subsidy costs $4 billion
1 person's subsidy costs = ($4 billion / 300 million) = $ 133.33
Ans b) Each person in the United States is only willing to spend $0.40 and only 20% of the population advocates antisubsidy. It means 6 million (20% of 30 million) people are willing to spend $0.40 to support efforts to overturn the corn subsidy,
Therefore, the total money they will be able to raise for their lobbying efforts = $0.40 * 6 million
= $ 2,400,000
The total money they will be able to raise for their lobbying efforts = $ 2.4 million
Ans c) If the recipients of corn subsidies donate just one percent of the total amount that they receive in subsidies it means each donates an amount = 0.01 * 133.33 = $ 1.33
20% of the population is opposing corn subsidy which means 80% of the population is in favour of subsidy i.e. 24 million people donate 1% of total amount received to support subsidy.
=> Total amount raised to support subsidy = ($1.33 * 24 million) = $ 31.9 million
Ans d) The amount raised by the recipients of the corn subsidy = $ 31.9 million
The amount raised by the opponents of the corn subsidy = $ 2.4 million
Thus, the amount raised by the recipients of the corn subsidy exceed the amount raised by the opponents of the corn subsidy = $ 31.9 million - $ 2.4 million = $ 29.5 million
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