Thursday, June 26, 2008

Rising Prices Due to Flooding in Midwest

I am sure we have all heard the horrible flooding that has happend in the midwest. We can all only imagine how much damage has actually been done. Federal and state officials have started to tally up the total economic cost. They are projecting that the damages will cost in the billions. 88 million dollars has been given to the sufering states to start to rebuild their houses and for other important needs like crops.

Due to this natural disaster the price of corn and other crop food will rise and there might even be a shortage of supplies especially since we are now into the popular corn eating season. Most people think that the only economic problems occur to only the people that are located where the disaster took place but that is not the case. This disaster will cause problems all over the united states because the food will be more money and will be harder to find because of lack of supplies. What can the government do to help control this economic loss? Will setting a tax or a price ceiling/price floor? Where will the gain be, with the producers or consumers or neither? Do you think deadweight loss will be higher than normal?

1 comment:

Greg Delemeester said...

Jessica, how would you answer your own questions at the end of your blog post?