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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).
Suppose that a security costs $3,000 today and pays off some amount b in one year. Suppose that b is uncertain according to the following table of probabilities: b: $3,000 $3,300 $
Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and average revenue Price Quantity Price Quantity $95 2 $55 5 $88 3 $40 6 $
Q. What do you mean by yield curve? Yield curve is a graph of interest rates of different maturity (recalculated to yearly rates) at a specific point in time. It's common for t
The consumption function of an economy is given by c = 200+0.75(y-t) And the investment function by I = 200 = - 25r. Government purchases G and taxes Τ are both 100. T
Use a diagram of the open economy model (e.g. fig 32.4 from the text) to illustrate and explain the effect of the following event on the market for loanable funds, the level of net
The city of Johnstown decides to build a new stadium to attract a basketball team from the city of Rosendale. One economic advisor suggests that the stadium should be fi
Aggregate demand with inflation In previous versions of Keynesian model, Components of aggregate demand did not depend on P. In IS-LM and in AS-AD models, investments depended
Discuss the concept of dynamic multiplier.
A sample of 60 mutual funds was taken and the mean return in the sample was 13% with a standard deviation of 6.9%. The return on a particular index of stocks (against which the mut
what is the supply side
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