Corn is a major input in both food production and ethanol production. During the mid-to-late 2000s, Federal mandates increased the amount of ethanol in gasoline, requiring the use of more corn. As the ethanol mandates increase, what happens to the demand for corn (you can think about this as if there is an increase in the number of buyers)?

Economics:
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Chapter3: The Market And Price System
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Corn is a major input in both food production and ethanol production. During the mid-to-late 2000s, Federal mandates increased the amount of ethanol in gasoline, requiring the use of more corn. As the ethanol mandates increase, what happens to the demand for corn (you can think about this as if there is an increase in the number of buyers)?

What happens to the price of corn?

What happens to the supply of food?

What happens to price of food?

Are there any other effects of the increased ethanol mandates you can think of?

 

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