Consider the market for corn. indicate whether each of the following events will cause a shift in the demand curve or a movement along the curve. if it will cause a shift, specify the direction. a. a drought hits corn-growing regions, cutting the supply of corn: . b. the government announces a new subsidy for biofuels made from corn: . c. a global recession reduces the incomes of consumers in poor countries, who rely on corn as a staple food (assuming corn is a normal good): . d. a new hybrid variety of corn seed causes a 15 percent increase in the yield of corn per acre: .

a) MOVEMENT ALONG THE CURVE

b) MOVEMENT ALONG THE CURVE

c) SHIFT TO THE LEFT

d) MOVEMENT ALONG THE CURVE

Explanation:

There is a MOVEMENT ALONG THE CURVE when there is a variation in the price of the good.

On the other hand, there is a SHIFT when any of the variables other than the price of the good changes (for example: the income of the consumers, the tastes of the consumers, the prices of related goods -substitutes or complementary-, the size of the market). When the curve shifts to the left this indicates a decrease in demand. When it moves to the right it indicates an increase in demand.  

a)A drought hits corn-growing regions, cutting the supply of corn. MOVEMENT ALONG THE CURVE. The decrease of the offer will cause an increase in the price, and consequently a decrease in the quantity demanded.

b)The government announces a new subsidy for biofuels made from corn. MOVEMENT ALONG THE CURVE. As a result of the subsidy, the demand for corn by biofuel manufacturers will increase, which will cause an increase in the price of corn, and consequently a decrease in consumer demand.

c)A global recession reduces the incomes of consumers in poor countries, who rely on corn as a staple food (assuming corn is a normal good). A SHIFT TO THE LEFT IN THE DEMAND CURVE. The reduction of income will cause a decrease in demand.

d)A new hybrid variety of corn seed causes a 15 percent increase in the yield of corn per acre. MOVEMENT ALONG THE CURVE. Corn supply increases and consequently the price decreases, which causes an increase in demand.

3rd the reason why is because of management and leadership