Last year Pat was a soybean farmer and Chris was a corn farmer.This year,high demand for ethanol,an automobile fuel made from corn,causes the price of corn to increase.
Refer to the information above.Relative to last year,the price of soybeans is likely to be ______,and the price of corn is likely to be ______.
A)higher;higher
B)higher;lower
C)lower,higher
D)the same;higher

Question

Quizplus · Accepted Answer

The allocative function of price causes resources to move away from soybeans toward corn.A reduction in soybean supply will increase the price of soybeans.The shift in demand has increased the price of corn.

Last Year Pat Was a Soybean Farmer and Chris Was