EC1006: Planet Money, the US National Public Radio Podcast, is an Excellent Resource for Understanding Economic Concepts: Economics of Business and Society Essay, UOA, Singapore

Task:

Planet Money, the US National Public Radio podcast, is an excellent resource for understanding economic concepts. Please listen to podcast 454: ‘The Lollipop War’ that was released on 16 March 2018. It can be found here:

https://www.npr.org/sections/money/2018/03/16/594317824/episode-454  the-lollipop-war

and the transcript can be found here:

https://www.npr.org/transcripts/594317012

In your essay, please address the following two items:

1) The podcast/article mentions an Act passed by the US Congress called the Food Conservation and Energy Act of 2008 (the so called US Farm Bill) which set a minimum price of sugar in the US to 22.9 cents per pound of sugar. Earlier in the podcast, it said that the world price of sugar was about 15 cents less than this. Using a supply and demand graph, explain what is going on in the sugar market in the US in comparison to the world market.

Assuming that the way sugar is produced is about the same in the US and in the world, what can you say about the relative efficiency of the US sugar market compared to the world market?

2) What is the effect of this law on candy producers – like the lollipop manufacturer mentioned in the article? Using supply and demand graphs show and explain what the market would look like both with and without the law on sugar prices in terms of the different prices and quantities of candy. From a purely market point of view, is the law efficient? Explain why or
why not.