Corn and soybeans are alternatives that could be grown by most farmers. If government subsidies for ethanol lead to higher corn prices, this will
A) increase the supply of corn.
B) increase the supply of soybeans.
C) decrease the supply of soybeans.
D) decrease the supply of corn.
E) have no effect on the supplies of corn and soybeans.

Question

Quizplus · Accepted Answer

Higher corn prices make corn more profitable, leading farmers to allocate more resources to growing corn instead of soybeans, thus decreasing the supply of soybeans.

Corn and Soybeans Are Alternatives That Could Be Grown by Most