Purchase Solution

Econ #8

Not what you're looking for?

Ask Custom Question

You drive 5000 miles a year and buy gasoline at the price of $2/gal. Except for differences in annual costs, you are indifferent between driving a 10 year old Buick ($400/yr, 20 miles per gal) or a 10 year old Toyota ($800/yr, 50 miles per gal).

(a) Which one do you choose to drive?
(b) How does your decision change if the price of gas is $1.75 per gallon?

Purchase this Solution

Solution Summary

Solution provides steps necessary to calculate which vehicle has the best gas mileage.

Solution Preview

Buick 20 miles per gal => 5000 miles per 250 gal => $500 in total at $2/gal, plus $400/yr = 900
Toyota 50 miles per ...

Purchase this Solution


Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.