Pick any two questions (each question should be half a page)

1. The acceleration of economic growth in the last two decades has made economic decision-making more complex as multinational concerns must be taken into account. Explain.

2. The Information Revolution, an economic restructuring comparable to the Agricultural Revolution and the Industrial Revolution, has brought about new questions of social interest. Elaborate.

3. Climatologists agree that global warming is at least in part the result of economic activity. The warming may lead to large economic costs. How can individuals and nations satisfy their self-interested desire for goods and services while also protecting the social-interest of the environment?

4. Think about the trends in what and how goods and services are produced in the U.S. and global economies. Do you think that at some future time, there will be no jobs in the United States and all the jobs will be in developing economies?

5. Compare the scale of agricultural production in the advanced and developing economies.

6. China is currently the world’s second largest economy. It is predicted to surpass the U.S. to become the biggest economy in the not-too-distant future. How does this development influence the strategic balance and the position of the United States? 7. Analyze the U.S. real estate market.

8. During 2007, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

9. Because wage rates are so low in Africa, why don't Microsoft, Cisco and other major corporations close down their American operations and move to Africa?

The 10th Amendment addresses the division of powers between the U.S. and the states. What issue(s) from the past or present can you think of that may cause states to clash with the U.S. Constitution?

A federal system has a number of advantages. A key one, as Supreme Court Justice Louis Brandeis noted in 1932, is that states can be “laboratories” of democracy. In particular, he argued, “It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”⁴⁷ Another advantage, as the Supreme Court argued in Bond v. United States (2011), is that “By denying any one government complete jurisdiction over all the concerns of public life, federalism protects the liberty of the individual from arbitrary power.”⁴⁸ Other advantages, as one law professor has pointed out, are that federalism can accommodate a diversity of preferences in a heterogeneous society, that the most appropriate level of government can be utilized for a particular purpose, and that the states can compete and their citizens can move to places that have an attractive particular mix of public policies.⁴⁹

Constitutional Distribution of Powers

The U.S. Constitution distributes power between the national and state governments. It grants and denies powers. In some cases, powers are granted exclusively to the national government and in other cases exclusively to the states. There are also instances where powers are granted to both the national and the state governments. The same can be said for denied powers. Some are denied to the national government, others are denied to the states, and some are denied to both.

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Division of Powers between National and State Governments

Figures 2.3 and 2.4 present a clear summary of the division of powers between the national and state governments. Although the division of powers may seem straightforward, these figures belie the true complexity of our federal system of government. It is complicated, and the meaning of each power has been subject to interpretation by the federal courts. If we examine four areas of the Constitution and the courts’ interpretations, we gain a much better understanding of American federalism. These four areas are the Necessary and Proper Clause versus the Tenth Amendment; the Interstate Commerce Clause; Equal Protection and Due Process Clause of the Fourteenth Amendment; and the power to tax and spend to promote the general welfare.

The “Necessary and Proper” Clause and the Tenth Amendment

Article 1, Section 8, paragraph 18 of the United States Constitution states that Congress shall have the power “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.” This seems to grant considerable power to the national government. However, the Tenth Amendment states: “The powers not page 60 delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” This seems to grant most powers not expressly granted to the federal government to the states, or that they would remain with the people. The meanings of these two sections of the Constitution were the cause of conflict early in the history of the Republic.

Tenth Amendment

Amendment of the U.S. Constitution that delegates or reserves some powers to the state governments or to the people

A movie theater manager believes the average amount of money customers spend on snacks is over $15.

To test the claim, a theater employee tracks the spending of 25 randomly selected customers.

The sample mean is $17.08 with a sample standard deviation of $4.81.

a) What is the Null Hypothesis and the Alternative Hypothesis for the manager’s claim?

b) Assuming the population is normal, should we use the Normal z-test or the Student’s t-test?

In an article in the Journal of Advertising, Weinberger and Spotts compare the use of humor in television ads in the United States and in the United Kingdom. Suppose that independent random samples of television ads are taken in the two countries. A random sample of 400 television ads in the United Kingdom reveals that 140 use humor, while a random sample of 500 television ads in the United States reveals that 128 use humor.

(a) Set up the null and alternative hypotheses needed to determine whether the proportion of ads using humor in the United Kingdom differs from the proportion of ads using humor in the United States.

(b) Test the hypotheses you set up in part a by using critical values and by setting α equal to .10, .05, .01, and .001. How much evidence is there that the proportions of U.K. and U.S. ads using humor are different? (Round the proportion values to 3 decimal places. Round your answer to 2 decimal places.)

(c) Set up the hypotheses needed to attempt to establish that the difference between the proportions of U.K. and U.S. ads using humor is more than .05 (five percentage points). Test these hypotheses by using a p-value and by setting α equal to .10, .05, .01, and .001. How much evidence is there that the difference between the proportions exceeds .05? (Round the proportion values to 3 decimal places. Round your z value to 2 decimal places and p-value to 4 decimal places.)

(d) Calculate a 95 percent confidence interval for the difference between the proportion of U.K. ads using humor and the proportion of U.S. ads using humor. Interpret this interval. Can we be 95 percent confident that the proportion of U.K. ads using humor is greater than the proportion of U.S. ads using humor? (Round the proportion values to 3 decimal places. Round your answers to 4 decimal places.)

In an article in the Journal of Advertising, Weinberger and Spotts compare the use of humor in television ads in the United States and in the United Kingdom. Suppose that independent random samples of television ads are taken in the two countries. A random sample of 400 television ads in the United Kingdom reveals that 143 use humor, while a random sample of 500 television ads in the United States reveals that 126 use humor.

(a) Set up the null and alternative hypotheses needed to determine whether the proportion of ads using humor in the United Kingdom differs from the proportion of ads using humor in the United States.

(b) Test the hypotheses you set up in part a by using critical values and by setting α equal to .10, .05, .01, and .001. How much evidence is there that the proportions of U.K. and U.S. ads using humor are different? (Round the proportion values to 3 decimal places. Round your answer to 2 decimal places.)

(c) Set up the hypotheses needed to attempt to establish that the difference between the proportions of U.K. and U.S. ads using humor is more than .05 (five percentage points). Test these hypotheses by using a p-value and by setting α equal to .10, .05, .01, and .001. How much evidence is there that the difference between the proportions exceeds .05? (Round the proportion values to 3 decimal places. Round your z value to 2 decimal places and p-value to 4 decimal places.) (d) Calculate a 95 percent confidence interval for the difference between the proportion of U.K. ads using humor and the proportion of U.S. ads using humor. Interpret this interval. Can we be 95 percent confident that the proportion of U.K. ads using humor is greater than the proportion of U.S. ads using humor? (Round the proportion values to 3 decimal places. Round your answers to 4 decimal places.)

(Please answer sub parts: A, B)

The student population at the state college consists of 55% females and 45% males.

A. The college theater department recently staged a production of a modern musical. A researcher
recorded the gender of each student entering the theater and found a total of 385 females and 215 males. Is the gender distribution for theater goers significantly different from the distribution for the general college? (Test at the .05 significance level using CV = 3.84).

B. The same researcher also recorded the gender of each student watching a men’s basketball game in the college gym and found a total of 83 females and 97 males. Is the gender distribution for basketball fans significantly different from the distribution for the general college? (Test at the .05 significance level
using CV = 3.84).

1. Due to the pandemic, the demand for movies in cinemas has fallen. AMC and Cinemark must both close half of their theaters in Lewis and Corinth counties over the next month.

a. Why would it be less profitable for both to close half the theaters in both counties versus one closing Lewis county theaters and the other closing Corinth county theaters?

b. Model a simultaneous game in which AMC and Cinemark choose either Lewis or Corinth to close. What is the equilibrium of this game?

c. What is the equilibrium if AMC was able to make a theater closure decision before Cinemark?

d. You are an economist hired to advise AMC on which theaters to close. Should you ask for time to all the theater traffic data or ask them to announce theater closures today?

ABC Theater runs multiple shows each month. Each of the 5 theaters has 100 seats. The selling price for each ticket is $10, no matter which show or time of day. Adults, Seniors and Children admissions are all $10 each.

Given the following financial data:

• ABC Theaters pays $8,000 rent for the theater equipment each month
• ABC Theaters owns the building and records depreciation of $1,500 each month
• The management has determined that there is a variable cost of $2 per admission that accounts for maintenance and supplies.
• The movie house managers salary is $36,000 per year or $3,000 per month. The manager also receives a $1 bonus for each paid admission to the theater
• Finally, the ABC Theaters wants to achieve a $10,000 profit at the end of each month.

* Compute the number of ticket admissions required to be sold each month to achieve break even, including the profit goal of $10,000 each month.

* If ABC Theater had an exceptional month and sold 4,000 tickets at their normal price, how much extra profit would they earn beyond their monthly goal of $10,000; assuming the same data as above?

Read the following case. Apply your knowledge of the five components of the 2013 COSO IC framework as well as risk, internal controls, and any other Chapter 6 [Parts 1 & 2] topics to speculate whether or not Ron has a chance of carrying out his idea successfully, without being caught, and explain in detail why or why not?

Ron Mitchell is currently working his first day as a ticket seller and cashier at the First Run Movie Theater. When a customer walks up to the ticket booth, Ron collects the required admission charge and issues the movie patron a ticket. To be admitted into the theater, the customer then presents his or her ticket to the theater manager, who is stationed at the entrance. The manager tears the ticket in half, keeping one half for himself and giving the other half to the customer.

While Ron was sitting in the ticket booth waiting for additional customers, he had a "brilliant" idea for stealing some of the cash from ticket sales. He reasoned that if he merely pocketed some of the cash collections from the sale of tickets, no one would ever know. Because approximately 300 customers attend each performance, Ron believed that it would be difficult for the theater manager to keep a running count of the actual customers entering the theater. To further support his reasoning, Ron noticed that the manager often has lengthy conversations with patrons at the door, and appears to make no attempt to count the actual number of people going into the movie house.