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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).
The elasticity of demand in the local hardware industry is -2, while in the video market it is. Which industry has a higher markup over marginal cost (as a percentage of price)?
Q. Explain the problem involved in consumer price Index? To explain the problems involved in calculating CPI we consider MP3 players. If you measure the average price of MP3 pl
What are the pros and cons of outsourcing in order to keep prices down?
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
Wholesale Prices, Consumer Prices and Inflation From the man on the street to the highest policy makers, the behavior of prices is of intimate concern. Prices determine the pu
What are the contents in the market strikes back? a. Price controls • Price ceiling • Price floor b. Quantity controls quota c. Excise tax d. Inefficiency
Desired Aggregate Spending Desired aggregate spending refers to the volume of purchases of the currently produced goods and services that all spending units in the economy wish
money demand = 3500 - 250i what is the interest rate present if the money market is in equilibrium
The financial crisis that hit the United States first and then the world economy starting in fall 2007 meant that the future prospects of many firms looked gloomy at best for some
Relate central banks with commercial banks In many countries, the central bank imposes reserve requirements. This means that commercial banks are obliged to hold a certain perc
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