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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).
Q. How to control Monetary policy? Remember that the money supply is equal to the money multiplier times the monetary base. We will presume that money multiplier is constant an
Question 1: (a) What are the characteristics of market and command economies? (b) In a number of countries in recent years, there has been a movement towards a greater rel
In 2010, Wonderlanders consumed 15 million liters of rum at an average price of $5 per liter. The Wonderland department of commerce has estimated that the price elasticity of the d
Q. Explain about Labor Market in AS-AD model? In AS-AD model, economy will always be on the response curve - the thick line in chart below. Figure: The labor in the
Suppose the US and Mexico both produce semiconductors and auto parts and the US has a comparative advantage in semiconductors while Mexico has a comparative advantage in auto parts
INTERDEPENDENCE OF MACROECONOMICS AND MICROECONOMICS In microeconomics, the underlying assumption is that the total output, total employment and total spending are given. It th
After some consultants point out that the Acme Toy Company has two bottlenecks in its production of xylophones and yo-yos. The first is a critical grinding machine that only has 9
Give examples of a monopoly and an example of perfect competition. Explain how each of your examples matches the textbook's definition of that market structure. Monopoly-a firm tha
Application of Theory of Consumer Behavior As already discussed earlier, the theory is an important tool to interpret and analyse demand curves. Apart from its usefulness as a
The managers of Firm A recommend that Firm A purchase Firm B because the purchase will diversify the business of Firm A. Diversification of risks is a desirable strategy for indivi
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