If the Production of Corn Increases Due to Ethanol, Then

question 6

Multiple Choice

If the production of corn increases due to ethanol, then:

• A) the equilibrium price of fertilizer will increase
• B) the equilibrium price of fertilizer will decrease
• C) no change in fertilizer price
• D) not enough information to answer

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Definitions:

Direct Expense

Costs that can be directly tied to the production or sale of specific goods or services.

Indirect Expense

Costs that are not directly tied to a specific product or service, such as utilities or rent for a company.

Insurance

A financial product that provides protection against losses or damages, in exchange for premium payments.

Departmental Income Statement

An income statement that shows the financial performance of different departments within a company.