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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).
(a) Use this information to set up a diagram showing the firm''s total revenue and total cost schedules. In this diagram, show the points at which the firm is maximizing profits.
Consider the following Marginal Private Cost (MPC), Marginal Social Cost (MSC) and market demand curves. These curves relate to a market for a product, the production of which gene
discuss how opportunity cost principles influences a supplier''s decision to supply labor
Cornell University conducted a study of wage differentials between men and women reported that one reason that men's wages are higher is that men tend to have more years of work ex
Suppose that quantity demand falls by 30% as a result of a 5% increase in price. What would be the price elasticity of demand for this good?
disuss with an aid of a diagram the kinked demand curve
The Transmission Mechanism The mechanism by which the changes in monetary policy affect aggregate demand is called 'transmission mechanism'. Two stages in transmission mechanis
If the Banking system has $500,000 in demand deposit liabilities, $125,000 in total reserves and a reserve requirement of 15%: What is the maximum amount by which the money supply
Equilibrium in the money market In the IS-LM-model, we have equilibrium in the money market when MD(Y, R) = MS This is the equation
If the firm‘s lowest average cost is $52 and the corresponding average variable cost is $26, what does it pay a perfectly competitive firm to do if • The market price is $51?
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