Much of the World's Supply of Palm Oil (Which Is

question 132

Multiple Choice

Much of the world's supply of palm oil (which is used in a variety of products including chocolate and soap) is grown in Indonesia on farms where rain forest once stood. To this day, farmers deforest the local jungle to plant more oil palms (Elaeis guineensis) . Suppose an environmental group decided to combat this deforestation by buying local rain forest areas. Would this strategy be more or less successful than slave redemption programs and why?

• A) Less successful, because farmers would respond by creating more rain forest.
• B) More successful, because it is more likely to drastically increase the price of rain forests.
• C) Less successful, because rain forest land has a perfectly inelastic supply curve.
• D) More successful, because it is much more likely to discourage palm oil consumption.