In 2008, increased gasoline prices led to increased corn prices primarily because
A. gasoline is a good substitute for corn oil, and corn oil is an input to gasoline production.
B. ethanol is a good substitute for gasoline, and corn is an input to ethanol production.
C. corn oil is a good substitute for gasoline, and ethanol is an essential input to corn production.
D. corn production and gasoline production are both concentrated in the high-cost Midwest.
Answer: B
You might also like to view...
Upstream and downstream refer to the degree of horizontal integration
Indicate whether the statement is true or false
As a result of specialization and trade, individuals no longer have to make choices about how to spend their incomes.
Answer the following statement true (T) or false (F)
The efficiency loss of a tax is:
A. the net value of sacrificed output caused by the tax. B. that portion of the tax paid by producers minus the portion paid by consumers. C. that portion of the tax paid by consumers minus the portion paid by producers. D. the total tax revenue minus the output loss caused by the tax.
A decreasing-cost industry will have
A) a perfectly elastic long-run supply curve. B) a perfectly inelastic long-run supply curve. C) an upward sloping demand curve in the long run. D) a downward sloping supply curve in the long run.