The government heavily subsidizes the production of ethanol to encourage the purchase of ethanol over oil, a less environmentally friendly form of energy. Given that the supply elasticity of ethanol, ?, is estimated to be about 0
13, what would the elasticity of demand, ?, have to be for consumers to receive at least half of the subsidy, and therefore encourage ethanol consumption? A) ? must be less than .
B) ? must be greater than .
C) ? must be more inelastic than the elasticity of supply.
D) Both A and C.
D
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New money is created in the U.S. economy by
A) increased federal government expenditures. B) banks that create checkable deposits. C) the U.S. Treasury. D) U.S. Department of Mint. E) the U.S. Congress.
In the face of gasoline prices approaching $4.00 automobile dealerships are heavily marketing their compact cars and hybrid vehicles
However, an interesting development is that many of these dealerships are offering their economy cars at MSRP (manufacturers suggested retail price) without offering discounts. What do you suppose these dealerships believe about the price elasticity of demand for these economy cars?
Since it is possible to grow coffee in the United States, the U.S. would gain by creating a domestic coffee industry rather than importing coffee from Brazil
a. True b. False Indicate whether the statement is true or false
Which of the following statements about bank loans is correct?
a. Banks are allowed to make loans to businesses, individuals, but not make loans to other banks or invest in the stock market. b. Banks are allowed to make loans to businesses, individuals, and other banks, but not invest in the stock market. c. Banks are allowed to make loans to businesses, individuals, and invest in the stock market, but not make loans to other banks. d. Banks are allowed to make loans to businesses, individuals, other banks, and invest in the stock market.