Relating to the Economics in Practice on page 253: Subsidies for ethanol, a fuel produced from corn, have affected the market for
A) corn.
B) wheat.
C) farm land.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

Subsidies for ethanol, which is produced from corn, have a broad impact on the market. They directly affect the demand for corn, increasing its price and profitability for farmers. This, in turn, can lead to changes in the use of farm land, with more land being allocated to corn production at the expense of other crops like wheat. Therefore, subsidies for ethanol can indirectly affect the markets for related agricultural products and resources.

Relating to the Economics in Practice on Page 253: Subsidies