Monday, December 17, 2007

Unit 1: The price of corn, food and biofuels

This BBC clip says that increasing demand for biofuels is pushing up food prices.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7140000/newsid_7148100?redirect=7148126.stm&news=1&nbram=1&nbwm=1&bbram=1&bbwm=1&asb=1 >

a) Using a S&D diagram, explain why the price of corn has risen
b) Using a S&D diagram, explain why the prices of products which use corn as an ingredient have risen
c) Using a S&D diagram, explain the effect on the biofuel market of the government giving corn producers a subsidy if corn is grown for biofuels

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