iven 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 negotiation of a trade agreement with Brazil that allows importation of Brazilian ethanol produced from sugar cane. May be multiple answers f) Equilibrium Quantity will increase. h) Equilibrium Price will increase. j) Equilibrium Price and Quantity will remain unchanged. d) Supply will increase. g) Equilibrium Quantity will decrease. e) Supply will decrease. i) Equilibrium Price will decrease. c) Demand will decrease. b) Demand 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.
13. 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
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f) |
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h) Equilibrium Price will increase. |
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j) Equilibrium Price and Quantity will remain unchanged. |
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d) Supply will increase. |
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g) Equilibrium Quantity will decrease. |
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e) Supply will decrease. |
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i) Equilibrium Price will decrease. |
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c) Demand will decrease. |
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b) Demand will increase. |
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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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