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The problem asks you to demonstrate how the market for corn would be affected by a fall in oil prices, assuming that ethanol and oil are substitutes, using supply and demand curves. Here's a step-by-step guide on how to approach the task:

1. **Demand and Supply Relationships**:
   - **Ethanol** is produced from corn, so a subsidy on ethanol increases demand for corn, pushing up its price.
   - If oil prices fall, demand for ethanol may decrease because oil becomes a cheaper substitute. This will reduce the demand for corn used in ethanol production.

2. **Impact on Corn Demand**:
   - A **fall in oil prices** decreases the demand for ethanol, which decreases the demand for corn (since corn is a key input for ethanol). This means the demand curve for corn shifts **left**.

3. **New Demand Curve (D2)**:
   - Draw a new **demand curve** (labeled $D_2$) to the left of the original demand curve $D_1$ to indicate a decrease in demand for corn.

4. **New Equilibrium**:
   - The intersection of the new demand curve ($D_2$) and the original supply curve ($S_1$) will indicate the new equilibrium. This will show a lower price and quantity of corn compared to the initial equilibrium ($P_1$ and $Q_1$).

### Solution Visualization Steps:
1. Draw the new demand curve $D_2$ to the left of the original $D_1$.
2. Find the new equilibrium point where $D_2$ intersects $S_1$, and label this new point (this new point will have a lower price and quantity than the initial equilibrium).
3. Label your curves and equilibrium properly.

Would you like more details on the economic reasoning or specific graphical tips? 

Here are 5 questions to deepen your understanding:
1. How does a subsidy affect the supply and demand dynamics for a product like ethanol?
2. What factors could shift the supply curve for corn instead of the demand curve?
3. How might government policies affect the market for both ethanol and oil?
4. What are some examples of substitutes in markets besides ethanol and oil?
5. What would happen if both oil prices and corn production costs were to change simultaneously?

**Tip**: Always remember to check how a shift in either supply or demand influences both price and quantity at equilibrium.

The Economics in Practice in this chapter describes the adjustment of the corn and wheat market in the United States to federal mandates requiring refiners to use corn-based ethanol in the production of fuel. Up until January 2012, refiners were given a subsidy of $0.45 for every gallon of ethanol they blended into their fuel. This subsidy drove up the prices of other agricultural products such as wheat and substantially raised the value of farmland. Assuming the subsidy was still in place, what would happen to the prices of these other agricultural goods and to the value of farmland if oil prices were to fall extensively at the same time? Trace these changes in the economy using supply and demand curves. Assume a given ethanol production subsidy. Assume for the purposes of this exercise that oil and ethanol are substitutes.

Show how the market for corn would be affected (given the ethanol production subsidy) if oil prices were to fall.

1.) Using the line drawing tool, draw either a new market supply curve (S2) or new market demand curve (D2). Properly label your curve.
2.) Using the point drawing tool, indicate the new market equilibrium (Equilibrium). Properly label your point.

Note: Carefully follow the instructions above and only draw the required objects.

Analyze how the corn market reacts to a decline in oil prices, assuming an ethanol subsidy, using supply and demand curves. This exercise explores the relationship between substitutes, price equilibrium, and agricultural economics.

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