Brazil Is the World's Largest Sugar Cane Producer and Sugar

question 36

Multiple Choice

Brazil is the world's largest sugar cane producer and sugar cane can be used for producing sugar and fuel ethanol for automobiles. Which of the following sequence of events is correct?

• A) Rising oil prices cause Brazilian producers to shift sugar cane production from sugar to fuel ethanol. The decrease in sugar supply raises the price of candy bars.
• B) Rising oil prices cause Brazilian producers to shift sugar cane production from fuel ethanol to sugar. The increase in sugar supply decreases the price of candy bars.
• C) Falling oil prices cause Brazilian producers to shift sugar cane production from sugar to fuel ethanol. The increase in sugar supply raises the price of candy bars.
• D) Falling oil prices cause Brazilian producers to shift sugar cane production from fuel ethanol to sugar. The increase in sugar supply raises the price of candy bars.

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Definitions:

Optimal Consumption

The consumption mix that provides the highest satisfaction or utility level to an individual, given their income and prices.

Indifference Curve

A graphical representation of different bundles of goods between which a consumer is indifferent, showing levels of utility.

Indifference Curves

Graphs representing different combinations of two goods that provide the same level of utility or satisfaction to a consumer.

Optimal Consumption

The consumption point at which a consumer achieves the highest possible satisfaction from available resources.