One of the questions in a study of marital satisfaction of dual-career couples was to rate the statement, "I'm pleased with the way we divide the responsibilities for childcare." The ratings went from 1 (strongly agree) to 5 (strongly disagree). The table below contains ten of the paired responses for husbands and wives. Conduct a hypothesis test at the 5% level to see if the mean difference in the husband's versus the wife's satisfaction level is negative (meaning that, within the partnership, the husband is happier than the wife). Wife's score 3, 4, 3, 3, 4, 2, 1, 1, 2, 4

Husband's score 2, 2, 2, 3, 2, 1, 1, 1, 2, 4

NOTE: If you are using a Student's t-distribution for the problem, including for paired data, you may assume that the underlying population is normally distributed. (In general, you must first prove that assumption, though.)

A) State the distribution to use for the test. (Enter your answer in the form z or t_df where df is the degrees of freedom.)

B) What is the test statistic? (If using the z distribution round your answer to two decimal places, and if using the t distribution round your answer to three decimal places.)

C) What is the p-value? (Round your answer to four decimal places.)

D) Sketch a picture of this situation. Label and scale the horizontal axis and shade the region(s) corresponding to the p-value.

E) Alpha (Enter an exact number as an integer, fraction, or decimal.)
α =

E)

Martin Luther King, Jr. was many things, a civil rights activist, nonviolent protestor, organizer, teacher, son, husband, father, and a black man. Many forget that he was first, a Christian Southern Baptist minister and preacher. His religious faith informed his ethical actions. After reading selections from Martin Luther King, Jr.’s, Letters from the Birmingham Jail, explore the role of Christian ethics in King’s actions during the turbulent times in the South in the 1960s. Consider the following:

1) King was in Birmingham to address the issue of injustice by organizing a protest. Define the injustice and the protest and explain how Judeo-Christian ethics were applied to allow for civil disobedience. How was the injustice in Birmingham tied to all communities in the South?

2) King lists four steps to nonviolent campaigns. Name them. How did these flow from King’s Christian ethical principles?

3) What was MLK's opinion of the old saying, "an eye for an eye"? How did MLK regard the notion that justice meant "evening the score?

4) How do King’s ethical principles help him defend against the charges that his protests and law breaking were “untimely” considering the political situation in Birmingham at the time?

5) Consider areas of conflict in the world today. Pick one and discuss how King’s actions and his ethical principles might resolve the issue.

NOTE: I AM NOT LOOKING FOR A WHOLE ESSAY AS AN ANSWER, HOWEVER, A SENTENCE OR TWO PER QUESTION WOULD BE VERY HELPFUL.

Thompson operated an ice-cream truck owned by Smith Foods Ltd. During the summer months Thompson travelled throughout the residential areas of a large city selling ice-cream products. Thompson’s principal customers were children, and Thompson would drive along the streets ringing a series of bells attached to his truck to signal his arrival in the area. Alberta, a five-year-old child, and her brother were regular customers of Thompson. On the day in question the two children heard the bells that sig- nalled the approach of Thompson’s ice-cream truck. Martha, Alberta’s mother, was talking to her husband on the telephone at the moment that the ice-cream truck arrived. In response to the cries of her two small children for money to buy ice-cream, she gave them enough money to buy an ice-cream bar each. The children ran across the street to where the truck was parked, and each ordered a different ice-cream product. Thompson served Alberta first, and then turned to serve her brother. At that instant, Alberta ran

into the street, with the intention of returning home, and was struck by a car driven by Donaldson.

Alberta was seriously injured as a result of the accident and an action for damages was brought against Thompson, the operator of the ice-cream truck, Smith Foods Ltd., the owner of the truck, and Donaldson, the owner and driver of the automobile.

Discuss the basis of the action on Alberta’s behalf against the owners and drivers of the vehicles, and determine the basis of the liability of each party under the law of torts.

Render a decision.

1. Assume that the functional form for new homes in a community each year is as follows:

Q_d = 1025 – (10*P) + (3*P_e) + (.25*P_r) + (8*Y) + (25*F) - (.75*T)

            And take the following values as constant:

                        P_e = 100 (in thousands of $)

                        P_r = 700 (in dollars per month)

                        Y = 45 (in thousands of $ per year)

                        F = 2.8 (in persons per household)

                        T = 120 (in $ of tax per home per year)

(The demand equation requires variables in the units mentioned for each of the five variables)

Solve for the reduced form linear demand function.

2. Turning to supply, assume that the price of new housing (P), the price of building materials (P_m), the wages of construction workers (W), the price of undeveloped land (P_u), and the level of impact fees they must pay to build a new house (IF) all affect the amount firms are willing to supply new homes. Take the specific functional form to be:

Q_s = 100 + (12*P) – (8*P_m) – (20*W) – (8*P_u) – (10*IF)

And take the following values as constant and given:

P_m = 30 (in thousands of $ per house)

W = 18 (in $ per hour)

P_u = 15 (in thousands of $ per lot)

IF = 4 (in thousands of $ per new house)

(The supply equation requires variables in the units mentioned for each of the four variables)

Solve for the reduced form linear supply function.

3. Using the reduced form Linear Demand & Supply functions you found in problems 1 & 2, solve for the equilibrium price (P) and quantity (Q) in this market. If either does not turn out to be an integer, please round to one decimal point.

4. Mathematically derive an equation that shows how the price of new homes (P) varies with the price of existing homes (P_e). Assume all variables other than P_e are held constant at the values given in problems 1 & 2.

Sam is planning an office party. He has the following utility function for fruit and cheese:

U ( F , C ) = min { 6 F , 2 C }

He has an income equal to $ 50 to spend on cheese and fruit. He prices the fruit and cheese during the first week of October. At this time the price of fruit per pound $ 1 and the price of cheese per pound equals $ 3 .

During the second week of October the price of fruit increased to $ 5 . 5 per pound. If Sam purchases the fruit and cheese at this time what is the magnitude of the income effect of this price change measured in pounds of fruit? Round your answer to the fourth decimal point.

1. Explain why a monopolist’s profit when he price discriminates cannot be less than his profits when he does not price discriminate.

2. The efficiency loss under perfect price discrimination is very high. True or False?

3. Consider a monopolist selling into two markets. Demand in the first market is given by P₁ = 50 - 2Q₁, and demand in the second market is given by P₂ = 70 - 2Q₂. Total cost for the monopolist is 50 - 10(Q₁ + Q₂), so marginal cost is 10.

1. What are the quantities and prices sold in each of the two markets?
2. What condition must hold in order for the monopolist to practice this kind of price discrimination?

The Bradley family owns 410 acres of farmland in North Carolina on which they grow corn and tobacco. Each acre of corn costs $105 to plant, cultivate, and harvest; each acre of tobacco costs $210. The Bradleys’ have a budget of $52,500 for next year. The government limits the number of acres of tobacco that can be planted to 100. The profit from each acre of corn is $300; the profit from each acre of tobacco is $520. The Bradleys’ want to know how many acres of each crop to plant in order to maximize their profit.

a. Formulate the linear programming model for the problem and solve.

b. How many acres of farmland will not be cultivated at the optimal solution? Do the Bradleys use the entire 100-acre tobacco allotment?

c. The Bradleys’ have an opportunity to lease some extra land from a neighbor. The neighbor is offering the land to them for $110 per acre. Should the Bradleys’ lease the land at that price? What is the maximum price the Bradleys’ should pay their neighbor for the land, and how much land should they lease at that price?

d. The Bradleys’ are considering taking out a loan to increase their budget. For each dollar they borrow, how much additional profit would they make? If they borrowed an additional $1,000, would the number of acres of corn and tobacco they plant change?

6.

The firm Kappa has just decided to undertake a major new project. As a result, the value of the firm in one year’s time will be either $120 million (probability 0.25), $250 million (probability 0.5) or $360 million (probability 0.25). The firm is financed entirely by equity and has 10 million shares. All investors are risk-neutral, the risk-free rate is 4% and there are no taxes or other market imperfections.

(a) What is the value of the company and its share price?

Kappa decides to issue debt with face value $146 million due in one year and use the proceeds to repurchase shares now. Assume now that bankruptcy costs will be 15% of the value of the firm’s assets in the event of default on debt repayment.

(b)What is the value of the debt now? What is its yield?

(c) What is the expected value of the firm and the price per share? How many shares will be repurchased?

(d) Assume Kappa decides instead to issue debt with face value $100 million due in one year and repurchase shares with the proceeds. What is the firm’s value now? Why? What is its share price?

(e) Explain how the presence of corporate taxes would influence Kappa’s restructuring decision. (100 words)

(Total = 25 marks)

You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call?

Assume the stock pays no dividend; ignore interest on margin.

Round your answer to the nearest cent (2 decimal places).