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: The government drops the mandatory requirement of minimum ethanol fuel content for cars. Will have multiple answers j) Equilibrium Price and Quantity will remain unchanged. e) Supply will decrease. h) Equilibrium Price will increase. i) Equilibrium Price will decrease. d) Supply 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. c) Demand will decrease. g) Equilibrium Quantity will decrease. b) Demand will increase. f) Equilibrium Quantity will increase
16. 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
|
j) Equilibrium Price and Quantity will remain unchanged. |
||
|
e) Supply will decrease. |
||
|
h) Equilibrium Price will increase. |
||
|
i) Equilibrium Price will decrease. |
||
|
d) Supply 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. |
||
|
c) Demand will decrease. |
||
|
g) Equilibrium Quantity will decrease. |
||
|
b) Demand will increase. |
||
|
f) Equilibrium Quantity will increase |
Step by step
Solved in 2 steps
