Which of the following events would shift a household’s consumption function upwards?

Select one:

a. The rate of interest falls.

b. Household current wealth falls as the stock market declines.

c. The rate of interest rises.

d. The household gets new information that leads them to expect they will be laid off next year.

e. The household head decides to go back to school

Attempt to briefly explain the great recession according to each of the following four business cycle theories:

1. New Keynesian

2. Real Business Cycle Theory

3. Monetarist

4. Austrian School

Use each of the four model perspectives to answer the question: how did this all happen? In your view, was an appropriate Fiscal and Monetary Policy Response followed?

Consider an industry with demand Q = a − p where 3 identical firms that compete a la
Cournot. Each firm’s cost function is given by C = F + c q. Suppose two of the firms merge and that the
merged firm’s cost function is given by C = F'+C'q, where F<F'<2F
(a) Determine each firm’s market share before and after the merger.
(b) Suppose that a = 10 and c = 3. Determine the Herfindahl index after the merger takes place when
(i) c'=2  (ii) c'=1 Compare this to the post-merger Herfindahl index calculated based on
pre-merger market shares

The residents of the town Ectenia all love econom- ics, and the mayor proposes building an economics museum. The museum has a fixed cost of $2,400,000 and no variable costs. There are 100,000 town residents, and each has the same demand for museum visits:

QD = 10 − P, where P is the price of admission.

a) Graph the museum’s average-total-cost curve and its marginal-cost curve. What kind of market would describe the museum

b) Themayorproposesfinancingthemuseumwith a lump-sum tax of $24 and then opening the museum to the public for free. How many times would each person visit? Calculate the benefit each person would get from the museum,  measured as consumer surplus minus the new tax.

c) The mayor’s antitax opponent says the museum should finance itself by charging an admission fee. What is the lowest price the museum can charge without incurring losses? (Hint: Find the number of visits and museum profits for prices of $2, $3, $4, and $5.)

d)For the break-even price you found in part (c), calculate each resident’s consumer surplus. Compared with the mayor’s plan, who is better off with this admission fee, and who is worse off? Explain.

e)What might real-world considerations absent in the problem above provide reasons to favor an admission fee?

The Nanjo Van(NV) Sdn Bhd is a private limited company incorporated in Malaysia. Starting its business in the last 5 years, NV already employs 70 dispatch staffs for delivery services. The company currently owns 15 vans and 20 motorcycles, some were purchased new, and some were acquired second-hand.

Since the pandemic of Covid-19 early 2020, the company suffers from inadequate resources as many trading companies now need transport facilities to sell their products. The company then decides to lease 10 more vans from a lessor in town under a 15-year leasehold agreement. This lease comes with purchase option at huge discounted price and most likely the company will buy the vehicles at the end of the lease term.

Full details of all vehicles owned by the company are maintained in a non-current asset register. But the leasehold vehicles are only recorded in the form of their monthly rentals in expense.

Required:

1. Identify the four (4) most important assertions for the audit of the vehicles owned by Nanjo Van(NV) Sdn Bhd. For each assertion, suggest the most appropriate substantive audit evidence you would gather and evaluate in addressing each assertion.

(10 Marks)

2. List and describe two (2) audit work you should perform on the 10 vehicles which are leased from the lessor in town.

(5 Marks)                      

(Total: 15 Marks)

Litapi Fisheries has just finished registering with Patents and Company Registration Authority (PACRA) as a Supplier of Fish to Hotels, Boarding Schools, Colleges and Universities amongst other intended clients. The Supplying Company has been organized into Marketing, Procurement, Accounts, sales, Human Resource and IT Departments. The Chief Executive Officer (CEO) of the company has decided to start with rented office premises in the town center of Mongu town, his single light truck as the only start up transport. The IT department is supposed to maintain the IT infrastructure on which all the other departments store their information and also provide the electronic marketing support for the marketing department. In the last five years, the region which is their major source of fish has experienced droughts and floods. The fish storage facilities which have been gotten by loan from the local Radian Stores are new and use AC power which is often loadshaded, at times for longer periods.

a) The human Resource department has just hired you as their inaugural Business Continuity Manger and tasked you to come up with Business Continuity Management System specific to this company. Discuss the said Business Continuity Management System, clearly highlighting the Mitigation and Continuity Strategies.

b) Use PDCA process approach to show how this fishing company can improve its management operations.

Question 1:

A football club is the only one in its region and is therefore able to behave like a monopolist.

It sells tickets to Adults (?) and Juniors (?), whose demand curves are given by:

?_! = 100−?_!

?_" = 80−?_"

Additionally, the club’s total costs are given by ?? = 10?

1. Initially, the club sets its price by charging all supporters the same price, according to the aggregate market demand curve. Calculate the maximising output, price and the resulting profit for the club as well as consumer surplus.

2. The club hires an economist to consider its pricing strategy and receives the advice that it should charge different prices to each type of supporter. Find the prices it sets in both markets, the sales (output) in each and its overall level of profit and illustrate profit maximising outputs and prices of each consumer type on a graph (one graph for each type of consumer). Calculate consumer surplus in this case.

3. What conditions must be satisfied for a producer to be able to implement a policy of price discrimination?

Question 2:

The following table presents the price, output and profits for identical firms at industry and firm level. Suppose there are currently four firms in the market and two are proposing to merge (firm 3 and 4). Assume that the remaining three (the one merged firm plus the two unmerged firms) continue to exhibit Cournot behavior.

a) Explain the merger paradox using data from the table below. How the merged firm (firm 3 and 4) will be worse off?

b) How would this outcome differ if all four firms merged?

c) Explain what is the motivation for two firms to merge.

Output is measured in thousands of units and profits are measured in thousands of pounds per week.

Question 3:

Consider a market with two identical firms, Firm A and Firm B. The market demand is ? = 20−^#$ ?, where ? = ?_% +?_& . The cost conditions are ??_% = ??_& = 16.

a) Assume this market has a Stackelberg leader, Firm A. Solve for the quantity, price and profit for each firm. Explain your calculations.

b) How does this compare to the Cournot-Nash equilibrium quantity, price and profit? Explain your calculations.

c) Present the Stackelberg and Cournot equilibrium output using a diagram.

4. The crude oil market can be described as a Nash-Cournot market, in which Saudi Arabia acts as Stackelberg leader. Do you agree with this statement?

Do teachers find their work rewarding and satisfying? An article reports the results of a survey of 397 elementary school teachers and 261 high school teachers. Of the elementary school teachers, 223 said they were very satisfied with their jobs, whereas 121 of the high school teachers were very satisfied with their work. Estimate the difference between the proportion of all elementary school teachers who are satisfied and all high school teachers who are satisfied by calculating a 95% CI. (Use p_elementary − p_{high school}. Round your answers to four decimal places.)

Interpret your 95% confidence interval.

The 1990s were a good time to buy CDs, mainly because discounters such as Wal-Mart and Best Buy were accumulating customers by dropping prices from $15 to $10. They were losing money, but they figured that the policy still made good business sense. Why? They reasoned that while customers were in the store to shop for CDs, they’d find other, more profitable products.

The policy was a windfall for CD buyers, but a real problem for traditional music retailers such as Tower Records. With discounters slashing prices, CD buyers were no longer willing to pay the prices asked by traditional music retailers. Sales plummeted and companies went out of business.

Ultimately, the discounters’ strategy worked: stores such as Wal-Mart and Best Buy gained customers who once bought CDs at stores like Tower Records.

Let’s pause at this point to answer the following questions:

1. Does selling a product at below cost make business sense?

2. Whom does it hurt? Whom does it help?

3. Is it ethical?

Let’s continue and find out how traditional music retailers responded to this situation.

They weren’t happy, and neither were the record companies. Both parties worried that traditional retailers would put pressure on them to reduce the price that they charged for CDs so that retailers could lower their prices and compete with discounters. The record companies didn’t want to lower prices. They just wanted things to return to “normal”—to the world in which CDs sold for $15 each.

Most of the big record companies and several traditional music retailers got together and made a deal affecting every store that sold CDs. The record companies agreed with retail chains and other CD outlets to charge a minimum advertised price for CDs. Any retailer who broke ranks by advertising below-price CDs would incur substantial financial penalties. Naturally, CD prices went up.

Now, think about the following:

1. Does the deal made between the record companies and traditional retailers make business sense?

2. Whom does it hurt? Whom does it help?

3. Is it ethical?

4. Is it legal?

In the mid-1990s a study was conducted in which 10 men with arthritic knees were schedule for surgery. They were all treated exactly the same except for one key difference: only some of them actually had the surgery. Once each patient was in the operating room and anesthetized, the surgeon looked at a randomly generated code indicating whether to do the full surgery or just make three small incisions in the knee and stitch them up to leave a scar. All patients received the same post-operative care, rehabilitation, and were later evaluated by staff who didn't know which treatment they had. The result: The men getting the sham knee surgery had improvement that was not distinguishable from the men getting the real surgery.

Identify the treatments and the subjects