Given that the U.S. government mandates the use of ethanol as a partial substitute for gasoline (10% by volume), and that ethanol manufactured in the U.S. is made from corn; how will the supply of ethanol, the demand for ethanol, as well as its equilibrium price and quantity, be affected by the following event: Development of a new highly efficient method of storing electrical energy (e.g. a light weight, yet structurally strong, composite material that can serve as the car body and store electricity as well).will have multiple answers f) Equilibrium Quantity will increase. a) To the extent the amount of ethanol additive in gasoline is determined by government fiat, neither demand for not supply of ethanol will be affected unless the government changes its requirements. b) Demand will increase. c) Demand will decrease. h) Equilibrium Price will increase. i) Equilibrium Price will decrease. g) Equilibrium Quantity will decrease. e) Supply will decrease. d) Supply will increase. j) Equilibrium Price and Quantity will remain unchanged.
15. Given that the U.S. government mandates the use of ethanol as a partial substitute for gasoline (10% by volume), and that ethanol manufactured in the U.S. is made from corn; how will the supply of ethanol, the
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f) |
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a) To the extent the amount of ethanol additive in gasoline is determined by government fiat, neither demand for not supply of ethanol will be affected unless the government changes its requirements. |
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b) Demand will increase. |
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c) Demand will decrease. |
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h) Equilibrium Price will increase. |
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i) Equilibrium Price will decrease. |
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g) Equilibrium Quantity will decrease. |
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e) Supply will decrease. |
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d) Supply will increase. |
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j) Equilibrium Price and Quantity will remain unchanged. |
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