Microeconomics: Supply and Demand and Corn
Unit Title : Microeconomics 200
Student Name :Ivan Adiyan Wijaya
Student Number :15800813
Campus :Curtin Singapore
Tutor’s Name :Mr Leo Kee Chye
Tutorial Day and Time :Monday, 1PM- 2PM
Introduction
Biofuel is a type of fuel which has energy that is derived from biological carbon fixation and include fuels which are generated from biomass conversion, such as liquid fuels, solid biomass, and various biogases. Biofuel can decrease fuel costs and reduce the CO2 emissions (Jason Hill 2006). Biofuel can be produced by using some of the crops especially corn. The demand of biofuel is increased which is because of biofuel is used as an alternative source of fuel. This is because of the fuel supplies are depleted caused by worse climate. Therefore, when the demand of biofuels increase, it also soared the price of food, especially corn.
PART A
(i). Analyze the impacts of increased demand for biofuels on the demand for and price of crops such as corn.
Recently, demand of biofuels increased because of consumers tend to buy biofuels rather than fossil fuel (fuel). Hence, it is likely that the producers of biofuels will produce more of biofuels due to the high demand of biofuels. As the producers, there are some criterion that need to be observed such as Isocost and Isoquant which are resulted of demand. Isoquant is the set of various technically efficient combinations of resources that can be used to produce a certain level of output that represented by Isoquant curve. Different levels of output have different isoquants. The higher the output level, the higher the isoquant curve is, and the vice versa (Pindyck and Rubenfeld 2009, 207). On the other hand, Isocost is the set of various combinations of resources that can be used on a given total cost and given resource prices represented by Isocost Curve (Pindyck and Rubenfeld 2009, 236). As long as the prices of labor and
Student Name :Ivan Adiyan Wijaya
Student Number :15800813
Campus :Curtin Singapore
Tutor’s Name :Mr Leo Kee Chye
Tutorial Day and Time :Monday, 1PM- 2PM
Introduction
Biofuel is a type of fuel which has energy that is derived from biological carbon fixation and include fuels which are generated from biomass conversion, such as liquid fuels, solid biomass, and various biogases. Biofuel can decrease fuel costs and reduce the CO2 emissions (Jason Hill 2006). Biofuel can be produced by using some of the crops especially corn. The demand of biofuel is increased which is because of biofuel is used as an alternative source of fuel. This is because of the fuel supplies are depleted caused by worse climate. Therefore, when the demand of biofuels increase, it also soared the price of food, especially corn.
PART A
(i). Analyze the impacts of increased demand for biofuels on the demand for and price of crops such as corn.
Recently, demand of biofuels increased because of consumers tend to buy biofuels rather than fossil fuel (fuel). Hence, it is likely that the producers of biofuels will produce more of biofuels due to the high demand of biofuels. As the producers, there are some criterion that need to be observed such as Isocost and Isoquant which are resulted of demand. Isoquant is the set of various technically efficient combinations of resources that can be used to produce a certain level of output that represented by Isoquant curve. Different levels of output have different isoquants. The higher the output level, the higher the isoquant curve is, and the vice versa (Pindyck and Rubenfeld 2009, 207). On the other hand, Isocost is the set of various combinations of resources that can be used on a given total cost and given resource prices represented by Isocost Curve (Pindyck and Rubenfeld 2009, 236). As long as the prices of labor and
References: List Jason Hill, Erik Nelson, David Tilman, Stephen Polasky, and Douglas Tiffany. 2006. Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels. 103 (30) 11099-11100. doi:10.1073/iti3006103 Mckenzie, Richard B and Dwight R. Lee. 2010. Microeconomics for MBAs: The Economic Way of Thinking for Managers, Second Edition. Cambridge Pindyck, Robert S and Daniel L Rubinfeld. 2009. Microeconomics seventh edition. Australia, Pearson