You own goods A and B. You are considering increasing price of good A by 10%. Here is the information you have

Pa = 20

Qa = 1000

For each $1 increase in Pa, Qa will decrease by 100.

Pb = 12

Qb = 750

For each $1 increase in Pa, Qb will increase by 100.

(The point of this exercise is to have you do everything the long way then use the delta r formula so you can see the difference)

a . What is Total revenue of A before the price change?

b. What is total revenue of A after the price change?

c . What is Total revenue of B before the price change?

d. What is total revenue of B after the price change?

e. What is the change of revenue for A after the price changes?

f. What is the change or revenue for B after the price changes?

g. What is change in total revenue for both goods after price changes?

h. What is the own price elasticity for good A?

i. What is the cross price elasticity of A and B?

j. Calculate the change of revenue using the formula ∆ r =[ Rx (1 + E_Qx,Px) + Ry(E_Qy,Px)]%∆P_x.

k. Explain why the two methods have different answers.

l. To calculate the change in total revenue from the price change, which method do you prefer? Doing parts a-g or doing part h-j? Briefly explain.

Only h-l

You own goods A and B. You are considering increasing price of good A by 10%. Here is the information you have Pa = 20 Qa = 1000 For each $1 increase in Pa, Qa will decrease by 100. Pb = 12 Qb = 750 For each $1 increase in Pa, Qb will increase by 100. (The point of this exercise is to have you do everything the long way then use the delta r formula so you can see the difference) a . What is Total revenue of A before the price change? b. What is total revenue of A after the price change? c . What is Total revenue of B before the price change? d. What is total revenue of B after the price change? e. What is the change of revenue for A after the price changes? f. What is the change or revenue for B after the price changes? g. What is change in total revenue for both goods after price changes? h. What is the own price elasticity for good A? i. What is the cross price elasticity of A and B? j. Calculate the change of revenue using the formula provided in class. k. Explain why the two methods have different answers. l. To calculate the change in total revenue from the price change, which method do you prefer? Doing parts a-g or doing part h-j? Briefly explain.

Give an example of an adjusting journal entry for each of the following transactions. Provide three correct responses:

Equal growth of an expense and a liability:

Earning of revenue that was previously recorded as unearned revenue:

Equal growth of an asset and revenue:

Increase in an expense and decrease in an asset:

A plane delivers two types of cargo between two destinations. Each crate of cargo I is 3 cubic feet in volume and 137 pounds in weight, and earns $30 in revenue. Each crate of cargo II is 3 cubic feet in volume and 274 pounds in weight, and earns $45 in revenue. The plane has available at most 270 cubic feet and 14,248 pounds for the crates. Finally, at least twice the number of crates of I as II must be shipped. Find the number of crates of each cargo to ship in order to maximize revenue. Find the maximum revenue.

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,100,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below:

Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.

Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion. (Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time. (Loss amounts should be indicated with a minus sign.)

Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion.

Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.

The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks follow.

(a)

Develop an estimated regression equation with the amount of television advertising as the independent variable. (Round your numerical values to two decimal places. Let x₁ represent the amount of television advertising in $1,000s and y represent the weekly gross revenue in $1,000s.)

ŷ =

(b)

Develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables. (Round your numerical values to two decimal places. Let x₁ represent the amount of television advertising in $1,000s, x₂ represent the amount of newspaper advertising in $1,000s, and y represent the weekly gross revenue in $1,000s.)

ŷ =

(c)

Is the estimated regression equation coefficient for television advertising expenditures the same in part (a) and in part (b)?

---Select--- Yes No , it is  in part (a) and  in part (b).

Interpret the coefficient in each case.

In part (a) it represents the change in revenue due to a one-unit increase in television advertising expenditure. In part (b) it represents the change in revenue due to a one-unit increase in television advertising with newspaper advertising held constant.In part (a) it represents the change in revenue due to a one-unit increase in television advertising expenditure with newspaper advertising held constant. In part (b) it represents the change in revenue due to a one-unit increase in newspaper advertising with television advertising held constant.    In part (a) it represents the change in revenue due to a one-unit increase in newspaper advertising expenditure with television advertising held constant. In part (b) it represents the change in revenue due to a one-unit increase in television advertising with newspaper advertising held constant.In part (a) it represents the change in revenue due to a one-unit increase in television advertising expenditure. In part (b) it represents the change in revenue due to a one-unit increase in newspaper advertising with television advertising held constant.In part (a) it represents the change in revenue due to a one-unit increase in television advertising with newspaper advertising held constant. In part (b) it represents the change in revenue due to a one-unit increase in television advertising expenditure.

(d)

Predict weekly gross revenue (in dollars) for a week when $3,500 is spent on television advertising and $1,800 is spent on newspaper advertising. (Round your answer to the nearest cent.)

$

Part 2: Transforming data and computing descriptive statistics

Create a quarterly real GDP series by dividing nominal GDP by the GDP deflator. Also, create a money velocity series as PY/M where P is the price level, Y is real GDP, and M is the M3 money supply measure.

a. Plot the velocity of money (produce a graph similar to Figure 8.2 on page 212 of the textbook). Has velocity risen or fallen over the sample period? b. What is the mean and standard deviation of M3 velocity?

picture from textbook: https://media.cheggcdn.com/media%2Fb3d%2Fb3d56712-5053-405f-83e0-88009e1d6240%2FphpGAezM0.png

data to be used:

Companies in the U.S. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. In 2011, Hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. Suppose the following data show the number of cars in service (1,000s) and the annual revenue ($ millions) for six smaller car rental companies.

(a)Develop a scatter diagram with the number of cars in service as the independent variable.

(b)What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? (Pick one of the options below)

There appears to be a negative linear relationship between cars in service (1,000s) and annual revenue ($ millions).

There appears to be no noticeable relationship between cars in service (1,000s) and annual revenue ($ millions).    

There appears to be a positive linear relationship between cars in service (1,000s) and annual revenue ($ millions).

(c) Use the least squares method to develop the estimated regression equation that can be used to predict annual revenue (in $ millions) given the number of cars in service (in 1,000s). (Round your numerical values to three decimal places.)

ŷ = ____

(d)For every additional car placed in service, estimate how much annual revenue will change (in dollars). (Round your answer to the nearest integer.)

Annual revenue will increase by $ ___, for every additional car placed in service.

(e)A particular rental company has 6,000 cars in service. Use the estimated regression equation developed in part (c) to predict annual revenue (in $ millions) for this company. (Round your answer to the nearest integer.)

$___ million

Companies in the U.S. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. In 2011, Hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. Suppose the following data show the number of cars in service (1,000s) and the annual revenue ($ millions) for six smaller car rental companies.

(1)Develop a scatter diagram with the number of cars in service as the independent variable.

(2)What does the scatter diagram developed in part (a) indicate about the relationship between the two variables?

a.There appears to be a positive linear relationship between cars in service (1,000s) and annual revenue ($ millions).

b.There appears to be no noticeable relationship between cars in service (1,000s) and annual revenue ($ millions).    

c.There appears to be a negative linear relationship between cars in service (1,000s) and annual revenue ($ millions).

(3)Use the least squares method to develop the estimated regression equation that can be used to predict annual revenue (in $ millions) given the number of cars in service (in 1,000s). (Round your numerical values to three decimal places.)

ŷ = ___

(4)For every additional car placed in service, estimate how much annual revenue will change (in dollars). (Round your answer to the nearest integer.)

Annual revenue will increase by $___, for every additional car placed in service.

(5)A particular rental company has 6,000 cars in service. Use the estimated regression equation developed in part (3) to predict annual revenue (in $ millions) for this company. (Round your answer to the nearest integer.)

$ ___ million