In: Economics
Question 1
Banks such as Merrill Lynch took part in the accounting fraud by :
Designing and implementing "arbitrage" opportunities for Enron in Texas.
Purchasing debt laden power barges in Nigeria and then selling them back to Enron.
Taking power plants offline to create artificial shortages of power in Washington.
All of these
Question 2
The collapse of Enron was made worse for employees because
Enron executives encouraged employees to invest all their 401K's in Enron stock.
Much of their compensation was in Enron stock.
When the company collapse was imminent the executives sold their stock while preventing employees from being able to sell theirs so they lost everything.
All of these
Question 3
The only Wall Street analyst who did not recommend Enron stock was
promoted for being the only one to give the right prediction.
a whistle blower who made Enron's fraud public.
bribed into changing his recommendation for $3 million in Enron stock.
fired by his employer when Enron threatened to cut off business ties with them.
Question 4
Which of the following is the only business to make money for Enron?
Indian power plants.
California electricity trading.
A trading market in weather.
Video on demand through Blockbuster.
Question 5
The executive whose division lost 1 billion dollars while he racked up $250 million in compensation thereby quitting the company to marry a stripper.
Ken Lay
Andy Fastow
Jeff Skilling
Lou Pai
In: Economics
Countries A and B are small open economies. Their economies depend on each other heavily for trade, but their respective governments don't always work together when setting economic policy. Assume (for simplicity) that these countries only trade with each other. Country A decides to decrease domestic taxes to balance its budget. a) How does Country A's policy, assuming they have a floating exchange rate, immediately impact trade between the two countries? Explain your answer with graphs and two sentences. b) Now assume Country B pegs their currency (fixed exchange rate) to Country A's currency. How should Country B's central bank respond to Country A's policy to control short run output? How does Country B’s new policy impact trade relative to before Country A changed their tax policy? Explain your answer with graphs and two sentences. c) Suppose Country A’s central bank contracted money supply to combat inflation simultaneously with their new tax policy (explained before part (a)). With this new information. Would your answer in part (b) change for Country B’s optimal central bank policy to fix their exchange rate? Explain your logic.
In: Economics
In: Economics
The interviewer shares, the fact is that some people will work hard to earn a lot of money while others will be content with much less income, what does this indicate to you?
In: Economics
Explain the logic of the monetary neutrality and why changes in the quantity of money only affect nominal variables and not real variables. Do you agree that monetary neutrality approximates the behavior of the economy in the long run? Why or why not?
must be at least 250 words
In: Economics
How does the Federal Open Market Committee increase the money supply? Why might the Federal Open Market Committee choose to increase the money supply?
MUST BE AT LEAST 250 WORDS
In: Economics
Jamie runs an Android app business. She has production function f(x1,x2) =
x11/3 x21/4. The price of factor 1 is w1 = 2, the price of factor 2 is w2 = 3, and the price of the output is 12.
Does this production function exhibit increasing, decreasing, or constant return to scale?
Write out the short-run profit maximization problem with x̄2 = 81.
Solve the short-run profit maximization problem by showing all the important
steps.
Find the short-run production level that maximizes the profit.
Write out the long-run profit maximization problem.
Solve the long-run profit maximization problem.
In: Economics
A company is considering the purchase of a large stamping machine that will cost $145,000, plus $6,300 transportation and $11,700 installation charges. It is estimated that, at the end of five years, the market value of the machine will be $48,000. The IRS has established that this machine will fall under a three-year MACRS class life category. The justifications for the machine include $34,000 savings per year in labor and $44,000 savings per year in reduced materials. The before-tax MARR is 20% per year, and the effective income tax rate is 40%. What is the after-tax equivalent annual worth of this investment over the five year period which ends with the sale of the machine? (Do not enter a dollar sign $ with your answer.)
In: Economics
In: Economics
A firm has a production function Q = KL, where Q is the quantity of output, K is the amount of capital and L is the amount of labor. MPL=K and MPK=L .
a) Suppose that capital is fixed at K=10 in short run. In this case, the marginal product of labor is MPL=10. Does this production function exhibit diminishing marginal returns to labor?
b) Suppose that in the short run, K is fixed at 10. The interest rate is r=4 and the wage is w=1. What is the short run total cost curve?
c) In (b), what are the functions for fixed cost, variable cost, average fixed cost, average variable cost and average cost?
d) In the long-run, capital is also variable. Does this production function exhibit increasing, decreasing or constant returns to scale?
(A-D HAS BEEN ANSWERED)
e) What is the long run cost function? What is average cost in the long run?
A.The long run total cost function is C = 4Q1/2 and the average cost is AC = 4Q–1/2.
B.The long run total cost is C = L + 4K and the average cost is AC = (L+4K)/Q
C.The long run total cost function is C = 4L + K and the average cost is AC = 4 + K
D.The long run total cost function is C = 4√Q and the average cost is AC = 4/Q.
f) Does this cost function exhibit increasing or decreasing economies of scale?
A. This cost function exhibits economies of scale
B. This cost function exhibits diseconomies of scale
C. This cost function exhibits neither economies nor diseconomies of scale
D. This production function exhibits economies of scale
In: Economics
A company is considering the purchase of a large stamping machine that will cost $140,000, plus $6,500 transportation and $12,000 installation charges. It is estimated that, at the end of five years, the market value of the machine will be $50,000. The IRS has established that this machine will fall under a three-year MACRS class life category. The justifications for the machine include $35,000 savings per year in labor and $45,000 savings per year in reduced materials. The before-tax MARR is 20% per year, and the effective income tax rate is 40%. What is the after-tax equivalent annual worth of this investment over the five year period which ends with the sale of the machine? (Do not enter a dollar sign $ with your answer.)
In: Economics
In: Economics
In: Economics
In: Economics