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Following a renewable fuels mandate in 2005, the demand for yellow corn, the key ingredient in ethanol, skyrocketed.
a. What is the immediate effect of the increase in demand on the price and quantity of yellow corn?
b.

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a. Use the information in the production contract curve to draw the production possibilities frontier for guns and roses. Put roses on the horizontal axis and guns on the vertical axis. Assume that when all resources are devoted to gun

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On a small tropical island, two firms draw on the same supply of labor and capital. The first firm produces fish, and in the fishing industry the marginal product of labor is 8 and the marginal product of capital is

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Bill and Ted like apples and oranges. Bill is always willing to substitute 1 apple for 1 orange. Ted is always willing to substitute 1 apple for 2 oranges.
a. Assume that there are 10 apples and 10 oranges

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Johnny and June are divorcing and must divide their music collection, which contains two types of music: country and folk. A mediator suggests an initial division of the collection. Given the initial division, Johnny’s MRS between folk and country is

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a. Suppose that Eliza and Henry are currently at point A. How many servings of tea and how many crumpets are each enjoying?
b. Suppose that while Eliza is using the powder room, Henry takes 4 cups of tea

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Peanut butter has always been thought to be a delicious, wholesome food. That is, until the FDA releases its Food Defect Guidelines that set maximum allowable amounts of rodent excreta that may be present in every jar (surprisingly, the maximum

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Many college graduates feel as if their student loan payments drag on forever. Suppose that the government offers the following arrangement: It will pay for your college in its entirety, and in return you will make annual payments until the

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A state lottery makes the following announcement: “Frederick Carbuncle has just won $100 million! We’ll pay Frederick $10 million each year for the next 10 years!”
a. Has Frederick really won $100 million? Explain.
b. Many state lotteries

Question

Suppose that when you were one year old, your grandmother gave you a shiny silver dollar. Your parents put that silver dollar in a savings account with a guaranteed 9% interest rate, and then promptly forgot about it.
a.