Why does Congress persistently provide subsidies for ethanol, a corn-based substitute for gasoline?

a. Ethanol is less corrosive and therefore automobile engines run more efficiently and last longer when operated with ethanol.
b. Production of gasoline with ethanol is more economical.
c. Legislators gain political support from corn farmers and ethanol producers even though it is more expensive to produce gasoline with ethanol.
d. The production and distribution of ethanol is good for the environment.


Answer: c. Legislators gain political support from corn farmers and ethanol producers even though it is more expensive to produce gasoline with ethanol.

Economics

You might also like to view...

Recall the Application. As the world price of wool decreased, the quantity of wool supplied by individual ranchers would ________, and the quantity supplied in the whole market would ________

A) decrease; increase B) increase; decrease C) increase; increase D) decrease; decrease

Economics

Suppose inflation comes in the form of an across-the board increase in all prices by some percentage k. For a consumer with exogenous income operating in a 2-good world, this will cause the budget constraint to

A. rotate inward B. rotate outward C. shift out in a parallel way D. shift inward in a parallel way E. none of the above

Economics

Refer to Figure 11-13. The lines shown in the diagram are isocost lines. If the price of labor is $50 per unit, then along the isocost AF, the total cost

A) is $500. B) is $750. C) is $1,250. D) cannot be determined without the price of capital.

Economics

The average unemployment rate was lowest during what period?

A) 1980-1990 B) 1950-1970 C) 2000-2010 D) 1980-2000

Economics