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In this paper you will analyze the justification and effectiveness of government subsidies. Find an example of an industry that is subsidized by the U.S. government and address the following:

  1. Explain why the U.S. government subsidizes the industry.
  2. Describe how the subsidy alters the market outcome (address issues like the production possibility curve, quantity supplied and demanded and price).
  3. Explain who gains and who loses from the government intervention. Address any beggar-thy-neighbor issues.
  4. Explain why you think the subsidy is or is not justified.

Note: Your assignment must be in expository essay form, comply with APA style formatting, be 3-7 pages long (not counting cover and references pages), and in MS Word.

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