case boeing and airbus are in a dogfight over illegal subsidies

Read the case and answer the questions that follow. You can see the case in the file.

These are the question:

1. Are there any circumstances under which the subsidies that Airbus received in its early years might be justified?

2. Do you think that Boeing originally benefited from subsidies? If they did, could they be justified?

3. Boeing and Airbus have allegedly been receiving subsidies for decades. How might ongoing subsidies distort the market for large commercial jet aircraft?

4. Who benefits from government subsidies to Boeing and Airbus? Who loses?

5. Under what circumstances, if any, should national governments subsidize the development of new technologies?

6. What would be the optimal outcome (in terms of economic welfare) of the ongoing trade dispute between the United States and the EU countries backing Airbus? How might such an agreement be enforced?

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