1. A bond issued by the town of Brockton has a 3% yield to maturity and a coupon rate of 4%. The bond has 4 years to maturity and pays coupons semi-annually. What is the bond's current price?

2. A credit card has an annual rate of 18% with monthly compounding. What is the EAR?

3. A bond issued by UMass Boston currently sells for $1000. It has 10 years to maturity and a yield to maturity of 2%. The bond pays coupons semi-annually.

a) What is the bond's coupon payment?

b) What is bond's coupon rate?

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2016, the first day of the fiscal year:

During the year ended June 30, 2017, the following transactions and events occurred in the Town of Weston Water Utility Fund:

1. Accrued expenses at July 1 were paid in cash.
2. Billings to nongovernmental customers for water usage for the year amounted to $1,387,000; billings to the General Fund amounted to $114,000.
3. Liabilities for the following were recorded during the year:

4. Materials and supplies were used in the amount of $284,000, all for costs of sales and services.
5. $14,500 of old accounts receivable were written off.
6. Accounts receivable collections totaled $1,514,000 from nongovernmental customers and $49,900 from the General Fund.
7. $1,067,000 of accounts payable were paid in cash.
8. One year’s interest in the amount of $180,500 was paid.
9. Construction was completed on plant assets costing $256,000; that amount was transferred to Utility Plant in Service.
10. Depreciation was recorded in the amount of $266,100.
11. Interest in the amount of $25,600 was reclassified to Construction Work in Progress. (This was previously paid in item 8.)
12. The Allowance for Uncollectible Accounts was increased by $10,000.
13. As required by the loan agreement, cash in the amount of $108,000 was transferred to Restricted Assets for eventual redemption of the bonds.
14. Accrued expenses, all related to costs of sales and services, amounted to $97,000.
15. Nominal accounts for the year were closed.

Required:
a. Record the transactions for the year in general journal form.
b. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position.
c. Prepare a Statement of Net Position as of June 30, 2017.
d. Prepare a Statement of Cash Flows for the year ended June 30, 2017. Assume all debt and interest are related to capital outlay. Assume the entire construction work in progress liability (see item 3) was paid in entry 7. Include restricted assets as cash and cash equivalents.
  

1. Suppose the demand and supply for gas generators in a coastal Florida town are as follows:

Q_d = 1800 – 3P

Q_s = 2P – 200.

a. Find the equilibrium price and quantity of generators.

b. Find the consumer surplus, producer surplus, and total gains from trade at the equilibrium price.

c. Question 2 asks you to consider the economic impacts of “price gouging.” Price gouging refers to suppliers raising their prices on essential goods (bottled water, gas, generators, airline tickets) during a crisis. Using the links that follow or a Google search, describe the costs and benefits of price gouging as described by economists. Then, discuss your opinion on the issue.

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2016, the first day of the fiscal year:

During the year ended June 30, 2017, the following transactions and events occurred in the Town of Weston Water Utility Fund:

Accrued expenses at July 1 were paid in cash.

Billings to nongovernmental customers for water usage for the year amounted to $1,383,000; billings to the General Fund amounted to $110,000.

Liabilities for the following were recorded during the year:

Materials and supplies were used in the amount of $278,000, all for costs of sales and services.

$14,200 of old accounts receivable were written off.

Accounts receivable collections totaled $1,482,800 from nongovernmental customers and $49,000 from the General Fund.

$1,047,800 of accounts payable were paid in cash.

One year’s interest in the amount of $177,200 was paid.

Construction was completed on plant assets costing $253,000; that amount was transferred to Utility Plant in Service.

Depreciation was recorded in the amount of $263,100.

Interest in the amount of $25,300 was reclassified to Construction Work in Progress. (This was previously paid in item 8.)

The Allowance for Uncollectible Accounts was increased by $10,000.

As required by the loan agreement, cash in the amount of $103,000 was transferred to Restricted Assets for eventual redemption of the bonds.

Accrued expenses, all related to costs of sales and services, amounted to $92,000.

Nominal accounts for the year were closed.

Required:
a. Record the transactions for the year in general journal form.
b. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position.
c. Prepare a Statement of Net Position as of June 30, 2017.
d. Prepare a Statement of Cash Flows for the year ended June 30, 2017. Assume all debt and interest are related to capital outlay. Assume the entire construction work in progress liability (see item 3) was paid in entry 7. Include restricted assets as cash and cash equivalents.

There are two factories in a small town. Both of them emit carbon dioxide into the air. Factory 1 currently emits 120 tons per month, whereas factory 2 currently emits 160 tons per month. The technology of each factory is different, so their costs of reducing emissions are different as well. The tables below show the costs of reducing emissions in increments of 20 tons per month for each factory:

The existing technology does not allow for reductions in emissions beyond 100 tons/month. That is, the most each factory could reduce its emissions by is 100 tons/month.

Suppose the government in this town would like to cut monthly emissions to half of the current level. To do that, the government has decided to impose a tax for every 20 tons of pollution per month emitted by a factory. To achieve its desired goal (but not exceed the goal), the tax would have to be set between $ _____________   and $ _________________   for every 20 tons/month. (The first number should be the lower end of the tax, and the second number should be the higher end of the tax.)

Incorrect answers: 450 and 720 respectively

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2016, the first day of the fiscal year:

During the year ended June 30, 2017, the following transactions and events occurred in the Town of Weston Water Utility Fund:

1. Accrued expenses at July 1 were paid in cash.
2. Billings to nongovernmental customers for water usage for the year amounted to $1,383,000; billings to the General Fund amounted to $110,000.
3. Liabilities for the following were recorded during the year:

4. Materials and supplies were used in the amount of $278,000 all for costs of sale and services.
5. $14,200 of old accounts receivable were written off.
6. Accounts receivable collections totaled $1,482,800 from nongovernmental customers and $49,000 from the General Fund.
7. $1,047,800 of accounts payable were paid in cash.
8. One year’s interest in the amount of $177,200 was paid.
9. Construction was completed on plant assets costing $253,000; that amount was transferred to Utility Plant in Service.
10. Depreciation was recorded in the amount of $263,100.
11. Interest in the amount of $25,300 was reclassified to Construction Work in Progress. (This was previously paid in item 8).
12. The Allowance for Uncollectible Accounts was increased by $10,000.
13. As required by the loan agreement, cash in the amount of $103,000 was transferred to Restricted Assets for eventual redemption of the bonds.
14. Accrued expenses, all related to costs of sales and services, amounted to $92,000.
15. Nominal accounts for the year were closed.

Required:

1. Record the transactions for the year in general journal form.
2. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position.
3. Prepare a Statement of Net Position as of June 30, 2017.
4. Prepare a Statement of Cash Flows for the year ended June 30, 2017. Assume all debt and interest are related to capital outlay. Assume the entire construction work in progress liability (see item 3) was paid in entry 7. Include restricted assets as cash and cash equivalents.

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2016, the first day of the fiscal year:

During the year ended June 30, 2017, the following transactions and events occurred in the Town of Weston Water Utility Fund:

1. Accrued expenses at July 1 were paid in cash.
2. Billings to nongovernmental customers for water usage for the year amounted to $1,383,000; billings to the General Fund amounted to $110,000.
3. Liabilities for the following were recorded during the year:

4. Materials and supplies were used in the amount of $278,000 all for costs of sale and services.
5. $14,200 of old accounts receivable were written off.
6. Accounts receivable collections totaled $1,482,800 from nongovernmental customers and $49,000 from the General Fund.
7. $1,047,800 of accounts payable were paid in cash.
8. One year’s interest in the amount of $177,200 was paid.
9. Construction was completed on plant assets costing $253,000; that amount was transferred to Utility Plant in Service.
10. Depreciation was recorded in the amount of $263,100.
11. Interest in the amount of $25,300 was reclassified to Construction Work in Progress. (This was previously paid in item 8).
12. The Allowance for Uncollectible Accounts was increased by $10,000.
13. As required by the loan agreement, cash in the amount of $103,000 was transferred to Restricted Assets for eventual redemption of the bonds.
14. Accrued expenses, all related to costs of sales and services, amounted to $92,000.
15. Nominal accounts for the year were closed.

Required:

1. Record the transactions for the year in general journal form.
2. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position.
3. Prepare a Statement of Net Position as of June 30, 2017.
4. Prepare a Statement of Cash Flows for the year ended June 30, 2017. Assume all debt and interest are related to capital outlay. Assume the entire construction work in progress liability (see item 3) was paid in entry 7. Include restricted assets as cash and cash equivalents.

4. Poway is a town that has 70 families with a child, and 30 without a child. 30 of the families with a child are willing to pay as much as $6,000 to educate their child, and 40 are willing to pay as much as $4,000 to educate their child. Each educated child creates a positive externality of $30 for each family in Poway but the cost of educating a child in Poway is $5,000.

(a) Without regulation, how many residents educate their child?

b) With regulation, how many residents educate their child?

c) What is the change in social profits by regulating the externality?

Residents of the town of Los Locos (population 100) like to drive noisy off-road vehicles, but they hate the disturbance and dust caused by each others’ vehicles. Each vehicle purchased by a resident causes $10 worth of damage to each of the 100 residents. Forty residents are willing to pay up to $3,500 for an off-road vehicle, 20 residents are willing to pay up to $3,000 for an off-road vehicle, and 40 residents are willing to pay up to $2,500 for an off-road vehicle. The price of an off-road vehicle is $2,200.

(a) Without regulation, how many residents buy an off-road vehicle?

(b) With regulation, how many residents buy an off-road vehicle?

(c) What is the change in social profits by regulating the externality?

Suppose the demand for burrito in a small isolated town is p = 8 - 2Q. There are only two firms, A and B, and each has a marginal cost of 2. Determine the Cournot equilibrium. (hint: using the rule that Marginal Revenue’s slope is always twice as much as the slope of the residual demand curve as long as the residual demand is linear in output)

Can you please write the answer on paper so it's clearer for me reading it. The -2Q part is throwing me off.