1) “Demand” is best defined as the relationship between:

1. the price of a good and the quantity consumers are willing and able to buy at each price level.
2. the current price of a good and the quantity demanded at that price.
3. the quantity supplied and the price people are willing to pay for a good.
4. the amount of income someone has and the price he is willing to pay for a good.

2) A home theater system and an HD television would be considered an example of:

A) substitute goods.

2. giffen goods.
3. inferior goods.
4. complementary goods.

3) Many people consider hot dogs to be an inferior good. For such people, all else held constant, a decrease in income would cause their demand for hot dogs to:

1. increase.
2. stay the same.
3. decrease.
4. cannot be determined with the information given.

4) If movies on DVD for home rental and movies seen at a theater are substitutes, and the price of movies seen at a theater increases, the demand for movies on DVD will:

A) increase.

2. stay the same.
3. decrease.
4. cannot be determined.

5) Which of the following is not considered a factor that influences supply?

A) Technology.

2. Production taxes and subsidies.
3. The number of buyers.
4. Resource prices.

6) For the U.S. economy, the largest expenditure category is:

A) government expenditures.

2. net export expenditures.
3. personal consumption expenditures.
4. investment expenditures.

7) Greater consumer confidence, wealth, available consumer credit, and disposable income ________ personal consumption expenditures.

1. increase
2. decrease
3. have no effect on
4. none of the above

8) Higher expected profits and business confidence ________ investment spending.

A) decrease

2. increase
3. do not affect
4. none of the above.

9) Appreciation of the U.S. dollar will ________ exports and ________ imports, other things equal.

1. increase; increase
2. increase; decrease
3. decrease; decrease
4. decrease; increase

10) The reserve requirement is 0.20. What is the simple deposit multiplier?

A) 1

2. 5
3. 0.10
4. 100

11) The interest rate that commercial banks charge each other for loans of reserves to meet their minimum reserve requirements is called:

A) treasury bill rate.

2. federal funds rate.
3. prime interest rate.
4. none of the above.

12) An increase in the reserve requirement would:

1. decrease excess reserves and reflect an expansionary monetary policy.
2. decrease excess reserves and reflect a contractionary monetary policy.
3. increase excess reserves and reflect an expansionary monetary policy.
4. increase excess reserves and reflect a contractionary monetary policy.

4

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,000 per month plus $0.10 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.50 per car washed.

Required:

Prepare the company’s planning budget for August.

5

Via Gelato is a popular neighborhood gelato shop. The company has provided the following cost formulas and actual results for the month of June:

While gelato is sold by the cone or cup, the shop measures its activity in terms of the total number of liters of gelato sold. For example, wages should be $6,500 plus $2.30 per liter of gelato sold and the actual wages for June were $21,300. Via Gelato expected to sell 6,400 liters in June, but actually sold 6,600 liters.

Required:

Calculate Via Gelato revenue and spending variances for June. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Many lakes in the Adirondack State Park in New York are carefully managed. At some lakes, fines are levied for introducing non-intended fish into the lake. Why would such a rule exist? (Answer this question from an externality perspective!)

Many hotels have implemented aggressive recycling programs. Assume an employee within the hotel approached you about starting a comprehensive recycling program. What factors would influence the hotel’s decision to make a commitment to such a program?

Explain what is meant by the Theme Park internal and external business environment and use the acronym P.E.S.T with appropriate examples to clarify your explanation.  Also, discuss using how new rides can be both interactive and educational.

Homes in a certain town have a mean value of $88,950. It is assumed that homes in the vicinity of the school have a higher value. A sample of 12 homes near the school is selected and it appears as if the population is normal. Their mean value is $92,460 with a standard deviation of $5200. Can we prove with 95% certainty that homes near the school do indeed have a higher value?

Park Company reported the following in the statement of shareholders’ equity at 1/1/18:

Common stock, $5 par value, authorized 200,000 shares,

      issued 100,000                                                                              $   500,000

Additional paid-in capital 1,500,000

Retained earnings 516,000

                                                                                                            $2,516,000

Less:  treasury stock, at cost, 5,000 shares (40,000)

Total shareholders’ equity $2,476,000

The following events occurred in 2018:

       3/1       1,000 shares of treasury stock were sold for $10,000

6/15     A 30% stock dividend was declared when the market value of the stock was $11.  The shares will be distributed on 7/31 to holders of record on 7/1.

       9/9      9,000 of previously unissued common stock sold for $12 per share.

      10/1     A 2-for-1 stock split resulted in the common stock’s par value being halved.

12/15   A cash dividend of $.50 per share was declared.

12/31   Net income for 2018 was $473,500.

Required:  

Prepare the journal entries required for the 2018 events affecting equity.

Prepare the equity section of the balance sheet at 12/31/18.

Show all formulas explaining how you derived to your answer

Sun City Limited commences construction of a multi-purpose water park on 1 July 2014 for Pretoria Limited. Sun City Limited signs a fixed-price contract for total revenues of $50 million. The project is expected to be completed by the end of 2017 and Pretoria Limited controls the asset throughout the period of construction. The expected cost as at the commencement of construction is $38 million. The estimated costs of a construction project might change throughout the project—in this example, they do change. The following data relates to the project (the financial years end on 30 June):

Required

(a)     Using the above data, compute the gross profit to be recognised for each of the three years, assuming that the outcome of the contract can be reliably estimated.  

(b) Prepare the journal entries for the 2015 financial year using the percentage-of-completion method.

(c) Prepare the journal entries for the 2015 financial year, assuming the stage of completion cannot be reliably assessed.

How much time do Americans living in or near cities spend waiting in traffic, and how much does waiting in traffic cost them per year? The data set given includes this cost for 31 cities. For the time Americans living in or near cities spend waiting in traffic and the cost of waiting in traffic per year:

a. Compute the mean, median, first quartile, and third quartile.

b. Compute the range, interquartile range, variance, standard deviation, and coefficient of variation.

c. Construct a boxplot. Are the data skewed? If so, how?

d. Compute the correlation coefficient between the time spent sitting in traffic and the cost of sitting in traffic.

e. Based on the results of (a) through (c), what conclusions might you reach concerning the time spent waiting in traffic and the cost of waiting in traffic.