Which of the following was an unintended consequence of the subsidies and mandated expansion in output of gasoline produced from corn-based ethanol?
a. higher food and grain prices.
b. a reduction in the demand for battery powered automobiles because of the low prices of gasoline produced from ethanol.
c. sharply lower prices for feed grains because of a reduction in the demand for corn.
d. a substantial reduction in crude oil prices because of the low-cost production of gasoline from ethanol.
a. higher food and grain prices.
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There are a few firms in the automobile industry in Poorland. In order to prevent a price war, these firms have secretly agreed to charge a price 20% above the marginal cost of production. This is an example of ________
A) free riding B) undercutting C) collusion D) cost-cutting
The aggregate production function
A) measures the productivity of labor as leisure decreases. B) increases only with increases in productivity. C) shows that real GDP can increase because of increased productivity as well as increased labor hours. D) cannot show the impacts of productivity improvements.