We present an analytical model of arteriolar mechanics that accounts for key autoregulation mechanisms, including the myogenic response and the vasodilatory effects of nitric oxide (NO) in the vasculature. It couples fluid mechanics of blood flow in arterioles with solid mechanics of the vessel wall, and includes the effects of WSS- and stretch-induced endothelial NO production. The model is used to describe the regulation of blood flow and NO transport under small changes in hematocrit, and to analyze the regulatory response of arterioles to small changes in hematocrit. Our analysis reveals that the experimentally observed paradoxical increase in cardiac output with small increases in hematocrit results from the combination of increased NO production and the effects of a strong myogenic response modulated by elevated levels of WSS. Our findings support the hypothesis that vascular resistance varies inversely with blood viscosity for small changes in hematocrit in a healthy circulation that responds to shear stress stimuli. They also suggest beneficial effects independent of changes in oxygen carrying capacity associated with the post-surgical transfusion of one or two units of blood.