Relating to the Economics in Practice on page 252: Ethanol is a fuel produced from corn, and ethanol subsidies have increased the supply of corn. As a result, demand for farm land has ________. Further, the supply of other grains has ________.
A) increased; increased
B) decreased; decreased
C) increased; decreased
D) decreased; increased

Question

Quizplus · Accepted Answer

Ethanol subsidies have increased the demand for corn, leading to an increase in the supply of corn which, in turn, has resulted in an increase in demand for farm land to grow corn. Since the land used to grow corn can not be used to grow other grains, the supply of other grains has decreased. Therefore, choice C is the best answer.

Relating to the Economics in Practice on Page 252: Ethanol