QUESTION 15 Suppose there is a decrease in the price of corn. If corn is an inpu

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QUESTION 15 Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to O shift rightward O shift leftward O become flatter O remain unchanged QUESTION 16 The basic circular flow diagram of the macroeconomy illustrates: O Two loops: one for the flow of goods and one for the flow of services 0o One loops, for the flow of money spent O Two loops: one for the fiow of real goods and resources and one for the flow of money One loop, for the flow of income Save All An

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Answer : 15) Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to shift rightward. Because of decrease in input price the firm use more corn to it's production which leads to more production. When production increase then supply curve shift to rightward because of more supply.

16) The basic circular flow diagram of the macroeconomy illustrates : Two loops : one for the flow of real goods and resources and one for the flow of money. For example, a consumer takes money wages because of his / her giving services to firm, or a consumer buying goods by flowing money to seller.

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