1. A water supply company faces the following inverse demand function: P = 100 – 2Q. Its cost function is C = 100+2Q. Note P is the water rate per thousand liters of water and Q is the quantity measured in thousand liters of water.
   1. Calculate the firm’s profit-maximizing output and price. What profit it will make? Will there be a deadweight loss to society? How much?
   2. Suppose a government regulator regulates the price following the marginal cost pricing rule. What price and water consumption will result? How much profit the monopoly will now make? What cost will the regulator incur? What deadweight loss will result due to this regulation?
   3. Now suppose the regulator wants the monopoly to follow the average cost pricing rule. What price and quantity will result? What will be the deadweight loss?

The CPA Practice Advisor reports that the mean preparation fee for 2017 federal income tax returns was $273. Use this price as the population mean and assume the population standard deviation of preparation fees is $100.

A) What is the probability that the mean price for a sample of 30 federal income tax returns is within $16 of the population mean?

B) What is the probability that the mean price for a sample of 50 federal income tax returns is within $16 of the population mean?

C) What is the probability that the mean price for a sample of 100 federal income tax returns is within $16 of the population mean?

D) Which, if any of the sample sizes in part (a), (b), and (c) would you recommend to ensure at least a .95 probability that the same mean is withing $16 of the population mean?

1. Calculate the minimum special price per unit that would be charged by each of the three divisions for a special order of 100 units of their products.

2. Calculate the minimum special price per unit that would be charged by each of the three divisions for a special order of 1,000 units of their products.

3. What would be the maximum price per unit that David Inc would pay to outsource (buy) 3,000 units of Division 1 products from an outside supplier? Assume fixed costs remain unchanged and that the products would be sold to its current customers.

Please answer questions 14 and 15 by referring to the following demand and supply schedules for crude oil:

price per barrel quantity demanded quantity supplied
$100 100 160
$90 120 120
$80 140 80
            $75 150 60
$70 160 40
$60 180     0
$50 200     0

14. The equilibrium price and quantity exchanged of crude oil are:
      A. $50 and 200 units, respectively. C. $90 and 120 units, respectively.
      B. $60 and 180 units, respectively. D. $75 and 60 units, respectively.

15. At a price of $100 per barrel of oil,
      A. there is an excess supply of 160 barrels and the price of oil will fall.
      B. there is an excess supply of 60 barrels and the price of oil will fall.
      C. there is an excess demand of 60 barrels and the price of oil will fall.
      D. there is an excess demand of 60 barrels and the price of oil will rise.

16. Assume the income elasticity of demand for a service you provide is 2.0. Given this information, we would
      label your service:
      A. a normal good and a necessity.    B. a normal good and a luxury C. an inferior good.

17. As we more narrowly define a good (e.g., from snacks to cookies to Chips Ahoy! cookies to a family size
      bag of Chips Ahoy! cookies), the absolute value of the own-price elasticity of demand:
      A. increases as the quantity and quality of substitutes increases.
      B. decreases as the quantity and quality of substitutes increases.
      C. increases as the quantity and quality of substitutes decreases.
      D. decreases as the quantity and quality of substitutes decreases.

One of the costs of unexpected inflation is an arbitrary redistribution of purchasing power. Find the loser and winner of the following transactions. In other words, describe how the purchasing power is redistributed with these transactions. b. Jennifer took out a fixed-interest-rate loan from Bank H when the CPI was 100. She expected the CPI to increase to 103 but it actually increased to 105. c. Nick bought some shares of stock and, over the next year, the price per share decreased by 7 percent and the price level decreased by 9 percent. c. Nick bought some shares of stock and, over the next year, the price per share decreased by 7 percent and the price level decreased by 9 percent. d. Jackie saves $100 and receives $106 the next year. During the same year, the price of the basket of goods that she purchases increases from $100 to $104.e. Fifteen years ago T’s parents purchased some land with the idea of selling it later to help pay your college expenses. They purchased the land for $100,000. They sold if for $180,000. During the time they held it the price level rose from 80 to 120.f. One year ago Sam purchased bonds for $100,000. He just sold them for $120,000. During the year the price level rose by 5%.g. Mitch makes payments on a car loan. If the price level a year ago was 120 and people expected it to rise to 125 but it actually rose to 128.

May Gilbert began working for Amalgamated Baking Company (ABC) in May 2003 as a sales supervisor at its Vernon, California, facility. In May 2005, ABC promoted her to food sales account manager and in June 2006 promoted her again to conduct training for southern California distributors. Ken Weinzimmer, ABC's senior vice president for sales and marketing and/or Dwight Carnahan, ABC's president, approved each promotion.

ABC then offered Gilbert a job in Texas. She accepted the offer and in January 2007, with Carnahan's approval, began working as the first sales supervisor at ABC's Fort Worth, Texas, facility. ABC did not then have distributors, routes, or trucks in the Dallas/Fort Worth area. No employees reported to Gilbert. In February 2007, Gilbert hired her husband to work under her supervision as a distributor.

ABC promoted Gilbert in January 2008 to the position of district sales manager for the Dallas/Fort Worth area; she received a pay raise as well. Carnahan and Gilbert's supervisor, John Davis, approved the promotion and raise. Gilbert then supervised up to eighteen distributors, of whom up to ten operated out of ABC's Dallas facility. Although ABC eventually gave her a 4 percent raise in September 2008, she received lower compensation than did male district sales managers in other areas, and ABC did not give her access to a cellular telephone. Gilbert complained about this treatment, implying she was being treated differently because she was a woman. ABC informed her that the other districts had performed better than hers during the same period.

In January 2009, several distributors whom Gilbert supervised complained she was treating them unfairly by favoring her husband in assigning the best routes, providing him other activities, and giving him other considerations. The distributors also complained of her poor advance knowledge of sales contests and supervision.

They asserted that Gilbert was one reason for the high distributor turnover in her market area. A few days later, the distributors advised Carnahan of additional complaints of favoritism they asserted Gilbert had shown to her husband. Carnahan referred these complaints to

Weinzimmer. Carnahan and Weinzimmer then met with the distributors, taking their grievances seriously because they viewed them as ABC customers. After a more detailed internal investigation, Carnahan concluded that the distributors complaints were valid, and followed up by meeting with Gilbert. Carnahan discussed with Gilbert The possibility of transferring her to Houston and also offered her a distributorship, both of which she refused. Carnahan then terminated Gilbert's employment. Gilbert alleges ABC fired her as an act of retaliation for her previous complaints about sex discrimination in pay and not being given a cellular phone.

a. Has Ms. Gilbert been unlawfully

discriminated against because of her sex?

b. If so, which form of sex discrimination

applies?

Selecting a “typical” Jewish client is difficult. An ultra-Orthodox Jew has a particular set of special needs. Yet, it is more common to see a Jew who is a middle-of-the-road Conservative. Sarah is an 80-year-old woman who is a first-generation American. She was raised in a traditional Conservative home. Her husband died after 50 years of a strong marriage. She has three children. Although her home is not kosher, she practices a variation of kosher-style eating, avoiding pork and not making dishes that combine meat and milk.

Two months ago, she was diagnosed with pancreatic cancer. Surgery was attempted, but the cancer was already in an advanced stage. Chemotherapy was started, but the cancer has progressed and is not responding to the medications. She is having difficulty eating because of the pressure of the tumor on the gastrointestinal tract. Discussions are being held to determine whether or not treatments should be stopped and whether hospice care should be initiated. Her hospital room is always filled with visitors.

1. Describe the Jewish ritual of circumcision . What is a bar or bat mitzvah?

Your friend Anna’s husband Jose has not been feeling well for the past 10 days. He has congestion in his lungs and has been very tired. She talked him into going to the doctor a week ago when his fever was 101.3. The doctor gave him some oral antibiotics, which he took faithfully until it was gone. But she still thinks he still looks sick.
Anna, Jose and there 3-year-old daughter have just moved to Ohio from Arizona. Jose is a park ranger and loves his job, even when it is checking on the local bat populations in nearby caves (bats creep him out). However, for the past three days he has felt too sick to work. His respiratory symptoms have not improved. Anna makes an appointment for him with her doctor.

1) As the physician’s assistant in the office, you are the first to examine Jose. What is your tentative diagnosis based on the history?

2) Which components of the history support your diagnosis?


Martinez Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $120,000.

(a) Prepare the journal entry for the issuance when the market price of the common shares is $164 each and market price of the preferred is $205 each.

(b) Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $210 per share. (Round answers to 0 decimal places, e.g. $1,225. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

8. [Own Price Elasticity of Demand] Given a demand function Q = f(P), the own price elasticity of demand is defined as

? = (dQ/dP) · (P/Q)

What is the own price elasticity of demand ?

(a) for the linear demand function Q = 100?5P when P = 10.

(b) for the linear inverse demand function P = 100?4Q when (i) Q = 10; (ii) Q = 20; (iii) Q = 12.5.

(c) for the demand function Q = P ^?0.5 , when (i) Q = 10; (ii) Q = 20.

(d) for the inverse demand function P = Q ^?1 , when (i) Q = 10; (ii) Q = 20.