Purchase Solution

Production Economic Theory

Not what you're looking for?

Ask Custom Question

Recently there has been a drive to increase the production of alternative fuels from corn. The argument used by many is energy self-sufficiency. In light of the desire to reduce our use of foreign produced oil, many have suggested we should subsidize this production and shift to alternative fuels. Is this a good or bad idea from and economic view? If you say "Yes" or "No", why, explain your answer using sound economic theory.

Purchase this Solution
Solution Summary

This solution explains production economic theory. The sources used are also included in the solution.

Solution Preview

Step 1
My answer is no. Shifting to alternative fuels is recommended but subsidizing this production is not acceptable from economic theory. Energy self-sufficiency is good but not when it is achieved through paying subsidies. The Energy Policy Act of 2005 requires that billions of gallons of ethanol be blended into vehicle fuel each year guaranteeing demand but the US corn ethanol subsidies have reached $6 billion according to 2015 budget estimates. The producers get federal subsidy, federal crop ...

Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Trade Theories

    for some reason, these production factors change, where the two countries begin to be comparable on economic and other factors related to production, for example, the theory would no longer apply and more difficult to apply successfully.

  • Economic Theory: Law of Diminishing Demand

    263843 Economic Theory: Law of Diminishing Demand The law of diminishing returns is a very important concept in economic theory. In a couple of sentences define the term and explain its importance?

  • Market Structures questions

    For the short run discuss the relationship between cost theory and production theory and the concept of diminishing returns --- what is diminishing returns and how does it shape production and cost curves.

  • Managerial Economics: Introducing New and Innovative Vehicle

    The decision is taken on the basis of the different types of the economic theories like profit analysis, theory of demand, theory of production etc. the most important economic concept that is used in the decision making of the auto companies is the theory

  • The law of diminishing returns and the business

    You can use the economic theory of diminishing marginal returns.

  • economic power so as to gain social and political power

    As such, being one of the angles of Marx's sociological theory, Marxism thus becomes not only a socio-political theory, but also an economic one that is dependent on the materialistic interpretation of aspects of history (Mattick, 1983).

  • Economic Concepts of Life Cycle Cost Analysis

    The same source further noted that there are two aspects of the Theory of the firm: a) theory of production and b) theory of the firm.

  • Theory of Constraints

    In today's economic business environment, most of business organization faces the problem of declining the sales and increasing cost. So, I have applied theory of constraints to handle the issue of sales and cost.

  • Suppose that more companies receive permission to drill for

    Question 5: Explain the role of economic theory and answer the question, â??what is an economic model?â?

View More Related Solutions