7 In 2011 the US Government declared that the country must increase the manufacture of fuel from crops such as corn that have previously only been used for food.What is likely to happen in the market for corn?1 pointA a movement along the demand curve for cornB a movement along the supply curve for cornC a shift to the left in the demand curve for cornD a shift to the left in the supply curve for corn
Question
7 In 2011 the US Government declared that the country must increase the manufacture of fuel from crops such as corn that have previously only been used for food.What is likely to happen in the market for corn?1 pointA a movement along the demand curve for cornB a movement along the supply curve for cornC a shift to the left in the demand curve for cornD a shift to the left in the supply curve for corn
Solution
The answer is likely to be a movement along the demand curve for corn (Option A). Here's why:
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The US Government's declaration to increase the manufacture of fuel from crops like corn is essentially an increase in demand for corn. This is because corn is now being demanded not just for food, but also for fuel.
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An increase in demand, with supply remaining constant, usually results in a movement along the demand curve, not a shift of the curve itself. A shift in the demand curve would imply a change in factors other than price, such as consumer preferences or income levels.
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The supply curve for corn is not likely to be affected directly by this declaration, unless there are changes in factors affecting supply, such as production costs or technology. Therefore, options B and D can be ruled out.
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A shift to the left in the demand curve for corn (Option C) would imply a decrease in demand, which is the opposite of what the government's declaration is aiming to achieve. Therefore, this option can also be ruled out.
So, based on the information given, the most likely outcome is a movement along the demand curve for corn (Option A), indicating an increase in demand due to the new use of corn for fuel production.
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