The Demand and Supply of Ethanol (A Renewable Fuel from Plant

question 77

Multiple Choice

The demand and supply of ethanol (a renewable fuel from plant materials) are given by Q^D = 8,000 - 2,000P and Q^S = 1,000P - 1,000, where P is price per gallon and Q measures gallons per minute. If the government subsidizes ethanol by $0.30 per gallon, what is the deadweight loss?

• A) $30
• B) $7,800
• C) $440
• D) $119

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Definitions:

Compound

A substance made up of two or more elements chemically combined in fixed proportions.

Comminuted

Refers to a fracture in which the bone is broken into several pieces.

Open Fracture

A type of bone fracture where the bone breaks through the skin, increasing the risk of infection.

Spiral

A curve that winds around a fixed center point at a continuously increasing or decreasing distance.