Biofuels to combat global warming and cut carbon emissions are diverting corn from food to fuel, and a World Resources Institute report says meeting a 20 percent bioenergy target in 2050 would need the world’s annual harvest of plant material to double.

a. What is the effect on the world price of corn of the increased use of corn to produce biofuel?

b. How does the change in the world price of corn affect the quantity of corn produced in a poor developing country with a comparative advantage in producing corn, the quantity it consumes, and the quantity that it either exports or imports?