kitbyf
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‘Some economists argue that the increase in food prices, caused by the rapid rise in biofuel production, is a major cause of famine and poverty in some of the world’s economies’. Evaluate the case for and against governments intervening to prevent agricultural products from being used to produce biofuel.

I do not know how to even approach this - what would you put???
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Toastiekid
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(Original post by kitbyf)
‘Some economists argue that the increase in food prices, caused by the rapid rise in biofuel production, is a major cause of famine and poverty in some of the world’s economies’. Evaluate the case for and against governments intervening to prevent agricultural products from being used to produce biofuel.

I do not know how to even approach this - what would you put???
I’d write a paragraph on how they intervene then one for it and one against it:dontknow: then a big conclusion where everything is evaluated
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Shazzer38
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1 para- evaluate and explain the way a government could intervene with a subsidy to make food more affordable. Evaluation could be where does the government get this money from and if it extra spending then isn’t it the same as the consumers simply paying a higher price.

2- another government intervention. Mention that biofuel and food are in composite demand, I.e the increase in production of biofuel means there is less food available and therefore high prices for it. Solution could be subsidizing other sources of energy so that those become cheaper and people move away to those

3. Against government intervention. Talk about the signaling function of prices and the rationing etc. to explain how the market could solve itself. Evaluate that this is unlikely to solve the problem, especially considering food is a necessity good etc.

Obviously add your own evaluation analysis and application, but I hope this gives you a general idea of what sort of things you are expected to discuss
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kitbyf
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Thank you! This is so helpful
(Original post by AdilShaydullin)
1 para- evaluate and explain the way a government could intervene with a subsidy to make food more affordable. Evaluation could be where does the government get this money from and if it extra spending then isn’t it the same as the consumers simply paying a higher price.

2- another government intervention. Mention that biofuel and food are in composite demand, I.e the increase in production of biofuel means there is less food available and therefore high prices for it. Solution could be subsidizing other sources of energy so that those become cheaper and people move away to those

3. Against government intervention. Talk about the signaling function of prices and the rationing etc. to explain how the market could solve itself. Evaluate that this is unlikely to solve the problem, especially considering food is a necessity good etc.

Obviously add your own evaluation analysis and application, but I hope this gives you a general idea of what sort of things you are expected to discuss
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