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Henry Ford's Model T was originally designed and built to be run on ethanol. Today, ethanol (190-proof alcohol) can be produced with domestic stills for about $0.75 per gallon. When blended with gasoline costing $3.00 per gallon, a 20% ethanol and 80% gasoline mixture costs $2.55 per gallon. Assume fuel consumption at 25 mpg and engine performance in general are not adversely affected with this 20-80 blend (called E80).
Aggregate Demand Policies Both fiscal and monetary policy changes shift the AD curve. Let us see how, starting with a fiscal expansion. See figure 6.2. In the upper panel, the
The number of gallons of paint that Home Depot sells in a given day is normally distributed with a mean of 150 gallons and a standard deviation of 35 gallons (I realize that the di
Show the market for cigarettes paying particular attention to the price elasticity of demand and supply. What would happen to the total expenditure on cigarettes if there was a tax
Suppose in a large department store, the average number of shoppers is 448, with a standard deviation of 21 shoppers. We are interested in the probability that a random sample of 4
What is the difference between 'quantity supplied' and 'supply'? There is a distinction among supply and quantity supplied. Supply explains the behavior of sellers at every pr
To determine whether high blood pressure affected whether a person had a stroke, a sample of 129 people who had had strokes are examined. In the sample, 39% had high blood pressure
Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 - 2.5 P and Qs = - 20 + 1.5 P respectively. The government decides to impose a p
The Concept of Growth and Growth Rate is explained below: Economic growth is rise in an economy’s level of the production of commodities, output or income. We can talk about th
Would it be more efficient if more firms could produce Vista? Would Microsoft have spent the money to develop Vista if it didn't hold a patent--that is, if once it developed Vista,
Equilibrium Income The next step is to use the aggregate demand function, AD, to determine the equilibrium level of income and output. This is done in figure . Recall that the
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