1. Suppose you are researching a firm that dominates the labor market in a small town.

a. What is the significance of studying this firm's resource pricing (for local people, for the firm itself, etc.)?

b. In the context of derived demand, why might it be important for workers at the firm that the firm's product has strong market performance?

c. Now assume the firm decides to increase employment by 1,000 workers. What does this decision reveal about the firm's marginal revenue product (MRP) and marginal resource cost (MRC)?

d. Next, assume the price for capital goods that the firm buys decreases. If capital goods and labor are substitute resources, what might this do to the firm's demand for workers?

e. If the firm's MRPL= $40, PL = $10, MRPC = $200; PC = $200, is it maximizing its profits? If not, state which resource(s) should be used in larger amounts and which resource(s) should be used in smaller amounts.

f. Finally, suppose there is mass migration into the small town where the firm operates. Due to the resulting increase in labor supply, what will happen to the firm's quantity of workers demanded? In this case, will the substitution effect and output effect move in the same direction or in opposite directions? Why?

Market demand for a retail product X in Our Town is given by Q^d = 42 – 0.4P (or P = 105 – 2.5Q_T). This market is shared by two firms, Mom & Pops and Walmart, whose cost structures are given by C_M&P = 15Q_M&P, and C_W = 100 + 5Q_W respectively. The two firms agree to share the market EQUALLY, and to collude on the price, which will be set by Walmart (as the dominant firm).

a. Determine Mom & Pop’s profit level under these conditions.

b. Walmart is considering pricing in a way that would force Mom & Pop’s to shut down its operations. Calculate Walmart’s profits as a monopolist as well as with Mom & Pop’s present (see assumption in (a) above), and advise Walmart whether or not it to do this. Set up your answers in a payoff matrix.

Sally lives in town with an ongoing pandemic. If she goes to work, theres a probability, p, of getting infected by the virus that is causing the epidemic, where 0 < p < 1. If she stays at home, she can't be infected and will not earn income. Suppose when she goes to work and does not get infected, she will earn $50. If she gets infected he will lose $80 in health care cost, but will still earn an income of $50. Sally has past savings of $100 and has utility function U = ln(x) where x is money. Determine the range of values for p where Sally will stay home.

King Solomon is a rich farmer in Tetebia, a town in the Asou Municipal Assembly. He owns over 100,000 hectares of farmlands. However, he fears the worst might happen and wants to do some investments to secure his future and that of his children. He is contemplating some long term investments he could undertake to secure his future and that if his children. He is now 50 years old and he plans to retire in 10 years from active farm work. He expects to live for another 25 years after he retires –that is, until age 85. He was advised by a friend that an investment in the financial market will help him plan his retirement well. He has no idea about financial markets and how they operate

SENTENCES IN BOLD ARE THE QUESTIONS

Consider a town in which only two residents, Felix and Janet, own wells that produce water safe for drinking. Felix and Janet can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water.

1. Suppose Felix and Janet form a cartel and behave as a monopolist. The profit-maximizing price is $____??? per gallon, and the total output is ____??? gallons. As part of their cartel agreement, Felix and Janet agree to split production equally. Therefore, Felix's profit is $____???, and Janet's profit is $___???.

Suppose that Felix and Janet have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Felix says to himself, "Janet and I aren't the best of friends anyway. If I increase my production to 35 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow."

2. After Felix implements his new plan, the price of water DECREASES OR INCREASES  to $____ ???per gallon. Given Janet and Felix's production levels, Felix's profit becomes $___??? and Janet's profit becomes $____???.

Because Felix has deviated from the cartel agreement and increased his output of water to 35 gallons more than the cartel amount, Janet decides that she will also increase her production to 35 gallons more than the cartel amount.

3. After Janet increases her production, Felix's profit becomes $_____???, Janet's profit becomes $____???, and total profit (the sum of the profits of Felix and Janet) is now $____???.

4. True or False: Based on the fact that both Felix and Janet increased production from the initial cartel quantity, you know that the output effect was larger than the price effect at that quantity.

Note that Felix and Janet started by behaving cooperatively. However, once Felix decided to cheat, Janet decided to cheat as well. In other words, Janet's output decisions are based on Felix's actions.

5. This behavior is an example of A TIT FOR TAT STRATEGY/ A DOMINANT STRATEGY/ TYPING/ OR A PRISONERS DILEMMA?? .

You are planning a report on apartment living in a college town. You decide to select four apartment complexes at random for in-depth interviews with residents. Use Table B, starting at line 128, to select a simple random sample of four of the following apartment complexes. (Don't use "00" to start with, and label in alphabetic succession for purposes of this exercise.)

101 19223 95034 05756 28713 96409 12531 42544 82853 102 73676 47150 99400 01927 27754 42648 82425 36290 103 45467 71709 77558 00095 32863 29485 82226 90056 104 52711 38889 93074 60227 40011 85848 48767 52573 105 95592 94007 69971 91481 60779 53791 17297 59335 106 68417 35013 15529 72765 85089 57067 50211 47487 107 82739 57890 20807 47511 81676 55300 94383 14893 108 60940 72024 17868 24943 61790 90656 87964 18883 109 36009 19365 15412 39638 85453 46816 83485 41979 110 38448 48789 18338 24697 39364 42006 76688 08708 111 81486 69487 60513 09297 00412 71238 27649 39950 112 59636 88804 04634 71197 19352 73089 84898 45785 113 62568 70206 40325 03699 71080 22553 11486 11776 114 45149 32992 75730 66280 03819 56202 02938 70915 115 61041 77684 94322 24709 73698 14526 31893 32592 116 14459 26056 31424 80371 65103 62253 50490 61181 117 38167 98532 62183 70632 23417 26185 41448 75532 118 73190 32533 04470 29669 84407 90785 65956 86382 119 95857 07118 87664 92099 58806 66979 98624 84826 120 35476 55972 39421 65850 04266 35435 43742 11937 121 71487 09984 29077 14863 61683 47052 62224 51025 122 13873 81598 95052 90908 73592 75186 87136 95761 123 54580 81507 27102 56027 55892 33063 41842 81868 124 71035 09001 43367 49497 72719 96758 27611 91596 125 96746 12149 37823 71868 18442 35119 62103 39244 126 96927 19931 36809 74192 77567 88741 48409 41903 127 43909 99477 25330 64359 40085 16925 85117 36071 128 15689 14227 06565 14374 13352 49367 81982 87209 129 36759 58984 68288 22913 18638 54303 00795 08727 130 69051 64817 87174 09517 84534 06489 87201 97245 131 05007 16632 81194 14873 04197 85576 45195 96565 132 68732 55259 84292 08796 43165 93739 31685 97150 133 45740 41807 65561 33302 07051 93623 18132 09547 134 27816 78416 18329 21337 35213 37741 04312 68508 135 66925 55658 39100 78458 11206 19876 87151 31260 136 08421 44753 77377 28744 75592 08563 79140 92454 137 53645 66812 61421 47836 12609 15373 98481 14592 138 66831 68908 40772 21558 47781 33586 79177 06928 139 55588 99404 70708 41098 43563 56934 48394 51719 140 12975 13258 13048 45144 72321 81940 00360 02428 141 96767 35964 23822 96012 94591 65194 50842 53372 142 72829 50232 97892 63408 77919 44575 24870 04178 143 88565 42628 17797 49376 61762 16953 88604 12724 144 62964 88145 83083 69453 46109 59505 69680 00900 145 19687 12633 57857 95806 09931 02150 43163 58636 146 37609 59057 66967 83401 60705 02384 90597 93600 147 54973 86278 88737 74351 47500 84552 19909 67181 148 00694 05977 19664 65441 20903 62371 22725 53340 149 71546 05233 53946 68743 72460 27601 45403 88692 150 07511 88915 41267 16853 84569 79367 32337 03316

1.Smitty and Bubba were out on the town and noticed a man harassing a lady for a kiss. When they approach him, he retreats. Not satisfied, Smitty pulls out a gun and shoots the stranger. Can Smitty use defense of others as a defense against this intentional tort?

a)No, deadly force cannot be used in a situation where imminent danger did not exist.

b)Yes, the man should not have tried to kiss the girl and Smitty's actions were justified.

c)No, one cannot defend legally another person using deadly force, only him or herself.

d)Yes, Smitty can use deadly force if he believed that that man's actions were reason enough to kill him.

2)In order for a crime to be committed there must be these two things must simultaneously co-exist,______ and _________

3)Stewart is the top manager at,the Milkybay, Inc. factory. He sets strict ethical standards for all employees. Stewart, however, often takes some of the company’s best milkybays and sells them from his house. The ethical tone at Milkybay, Inc. is

a)

The Candy Town Company, a competitor of the SweetTooth Candy Company, knows it will need 40,000 lbs of sugar six months from now to implement its production plans. James Taffy, Candy Town's purchasing manager, has essentially two options for acquiring the needed sugar. One option is to buy the sugar at the going market price when they need it, six months from now. Mr. Taffy has assessed the probability distribution for the possible prices of sugar six months from now (in dollars per pound) as shown below:

Price in 6-month   Probability

    $0.078            0.10
     0.086    0.20
     0.094    0.20
     0.102    0.20
     0.110    0.20
     0.118    0.10    

The second purchasing option is to buy a futures contract now. The contract guarantees delivery of the sugar in six months but the cost of purchasing it will be based on today's market price. Assume that possible sugar futures contracts available for purchase are for 10,000 lbs, 20,000 lbs or 40,000 lbs only. No futures contracts can be purchased or sold in the intervening months. The Candy Town Company will buy the total of 40,000 lbs of sugar in one way or another. The price of sugar now is $0.0851 per pound. The transaction costs for 10,000 lbs, 20,000 lbs and 40,000 lbs futures contracts are $150, $200, and $350, respectively.

(You may choose one answer more than once.)

Question 1 options:

Q3- The newly appointed mayor of XYZ Town noticed that in the recent enacted budget of the city’s General Fund, revenue exceed expenditure by 15,000 SAR. Later that year, after a hurricane caused a large amount of damage, she ordered the city’s finance office to write a check for 15,000 SAR from the General Fund to an emergency relief fund. Because of unexpected nature of the hurricane, no appropriation had been made to cover this transaction. When confronted by the press, she pointed out that the state’s balance budget require only that the General Fund “break- even” and that she could not, in good conscience, allow the city to retain idle resources when people needed help. What, if anything, did the mayor do wrong? Explain.

1. Explain the reason for the budget allocation and how the government will finance this expenditure for 2020.
2. The government has recently introduced value added tax (VAT). Explain two reasons why the VAT is implemented in this country.
3. Explain the impact of VAT to consumer spending and business.
4. The government is planning to change its modified accrual basis to accrual basis. Do you think this is a good practice? Explain your reasons.

King Solomon is a rich farmer in Tetebia, a town in the Asou Municipal Assembly. He owns over 100,000 hectares of farmlands. However, he fears the worst might happen and wants to do some investments to secure his future and that of his children. He is contemplating some long term investments he could undertake to secure his future and that if his children. He is now 50 years old and he plans to retire in 10 years from active farm work. He expects to live for another 25 years after he retires –that is, until age 85. He was advised by a friend that an investment in the financial market will help him plan his retirement well. He has no idea about financial markets and how they operate. You recently graduated and have just reported to work as an investment advisor at the brokerage firm of Cenden Ltd. King Solomon has approached your company for advice. Your boss after a discussion with King Solomon could gather the following information. King Solomon wants his first retirement payment to have the same purchasing power at the time he retires as GHȼ 40,000 has today. He wants all of his subsequent retirement payments to be equal to his first retirement payment. (Do not let the retirement payments grow with inflation: King Solomon realizes that the real value of his retirement income will decline year by year after he retires.) His retirement income will begin the day he retires, 10 years from today, and he will then receive 24 additional annual payments. Inflation is expected to be 5% per year from today forward. He currently has GHȼ 100,000 saved up, and he expects to earn a return on his savings of 8% per year with annual compounding.

Again, he wants to have a secure university education for his lovely daughter Daisy. His daughter is now 13 years old. She plans to enroll at the University of Professional Studies, Accra in 5 years, and it should take her 4 years to complete her education. Currently, the cost per year (for everything – her food, clothing, tuition, books, transportation, and so forth) is GH¢ 12,000 per year. This cost is expected to remain constant throughout the four-year university education. The daughter recently received GH¢ 7,500 from her grandfather’s (King David’s) estate; this money will be invested at a rate of 8% to help meet the costs of Daisy’s education. The rest of the costs will be met by money King Solomon will deposit in a savings account which also earns 8 percent compound interest per year. He will make 5 equal deposits into the account, one deposit per annum starting one year from now until his daughter starts university. These deposits will begin one year from now. (Assume that school fees are paid at the beginning of the year).

Again, King Solomon is interested in buying a bond issued by Zenzo Pharma Ltd. Zenzo Pharma intends to use the proceeds of the bonds to finance the production of its new vaccine for COVID 19. The bond has a face value of GH¢10,000 at a coupon rate of 12% and a term to maturity of 10 years. The bond expects to pay coupons annually. Included in the bond indenture are call and sinking fund provisions. The required rate of return on the market for bonds with similar features is 18% per annum. Your boss had asked you to advice King Solomon based on the information he provided

Required
a. Explain to King Solomon what financial markets mean and which three (3) financial instruments he can invest in.                                                                                   
b. To the nearest cedi, how much must he save during each of the next 10 years (with equal deposits being made at the end of each year, beginning a year from today) to meet his retirement goal? (Note: Neither the amount he saves nor the amount he withdraws upon
retirement is a growing annuity.)                                                                           

c. What will be the present value of the cost of 4 years of education at the time the daughter
Daisy turns 18?                                                                                                          
d. What will be the value of the GH¢ 7,500 that Daisy received from her grandfather’s estate
when she starts college at 18?                                                                                   
e. If King Solomon is planning to make the first of 5 deposits one year from now, how large must each deposit be for him to able to put his daughter through college?