A marginal adjustment only refers to a minor change

The government heavily subsidizes the production of ethanol to encourage the purchase of ethanol over oil, a less environmentally friendly form of energy. Given that the supply elasticity of ethanol, ?, is estimated to be about 0

13, what would the elasticity of demand, ?, have to be for consumers to receive at least half of the subsidy, and therefore encourage ethanol consumption? A) ? must be less than . B) ? must be greater than . C) ? must be more inelastic than the elasticity of supply. D) Both A and C.

It has been noted that when the price of a good increases, people purchase less of the good. This is an example of

A) macroeconomic analysis. B) irrational behavior. C) normative economic analysis. D) positive economic analysis.