On January 1st 2000 Froto Company acquired 100% of the voting stock of Bilbo Company at book value.

Froto uses the initial value method (cost) and Bilbo doesn't pay any dividends.

On October 1st 2020 Froto sold some merchandise (inventory) to Bilbo company for $1,000,000 credit

the inventory had cost Bilbo $600,000. Both Bilbo and Froto use the perpetual inventory method.

During 2020 Bilbo had sold 70% of the merchandise acquired from Froto for $750,000 but had not paid off Froto

During 2021 Bilbo sold the remaining merchandise for $325,000 and paid off Froto

In 2020 Froto (unconsolidated) reported income of $1,000,000 and Bilbo reported income of $40,000

In 2021 Froto (unconsolidated) reported income of $1,200,000 and Bilbo reported income of $77,000.

A tank contains 90 kg of salt and 2000 L of water: Pure water enters a tank at the rate 8 L/min. The solution is mixed and drains from the tank at the rate 4 L/min. What is the amount of salt in the tank initially? Find the amount f salt in the tank after 4.5 hours. Find the concentration of salt in the solution in the tank as the time approaches infinity. (Assume your tank is large enough to hold the solution.)

1. Nadia earns $2000 this month and will earn $2500 the next month. The interest rate between each month is 10%. She wants to consume the same quantity each month.

(each question is separate and do not build on each other)

1. How much would Nadia save? How much would she consume?
2. If the interest rate is now 20%, how much would she save? How much would she consume?
3. If she asks her boss to switch her paycheck (she earns $2500 the first month and $2000 the second), how much would she save? How much would she consume?
4. If she asks her parent for a little extra in the second month, raising her income to $3000, how much would she save? How much would she consume?
5. If she knows she will be fired at the end of the first month and receive not benefit, how much would she save? How much would she consume?

1. Nadia earns $2000 this month and will earn $2500 the next month. The interest rate between each month is 10%. She wants to consume the same quantity each month.

(each question is separate and do not build on each other)

1. How much would Nadia save? How much would she consume?
2. If the interest rate is now 20%, how much would she save? How much would she consume?
3. If she asks her boss to switch her paycheck (she earns $2500 the first month and $2000 the second), how much would she save? How much would she consume?
4. If she asks her parent for a little extra in the second month, raising her income to $3000, how much would she save? How much would she consume?
5. If she knows she will be fired at the end of the first month and receive not benefit, how much would she save? How much would she consume?

Tax

An article by Paul Krugman published in the New York Times on March 15th, 2000 argued against George W. Bush’s reduction in gasoline taxes as a method for offsetting the spike in gasoline prices at the time (article attached). Analyze the article from what you have learned in class. What may a reduction in gasoline prices affect the demand for gasoline; and consequently affect the price? How elastic is the short-run Supply Curve and the Demand Curve? Who reaps the benefits if gasoline taxes are reduced or eliminated? How would this action affect the price of gasoline in the short run? Explain in words and graphically.

By PAUL KRUGMAN

Teachers of economics cherish bad policies. For example, if New York ever ends rent control, we will lose a prime example of what happens when you try to defy the law of supply and demand. And so we should always be thankful when an important politician makes a really bad policy proposal.

Last week George W. Bush graciously obliged, by advocating a reduction in gasoline taxes to offset the current spike in prices. This proposal is a perfect illustration of why we need economic analysis to figure out the true ''incidence'' of taxes: the people who really pay for a tax increase, or benefit from a tax cut, are often not those who ostensibly fork over the cash. In this case, cutting gasoline taxes would do little if anything to reduce the price motorists pay at the pump. It would, however, provide a windfall both to U.S. oil refiners and to the Organization of Petroleum Exporting Countries.

Let's start with why the oil cartel should love this proposal. Put yourself in the position of an OPEC minister: What sets the limits to how high you want to push oil prices? The answer is that you are afraid that too high a price will lead people to use less gasoline, heating oil and so on, cutting into your exports. Suppose, however, that you can count on the U.S. government to reduce gasoline taxes whenever the price of crude oil rises. Then Americans are less likely to reduce their oil consumption if you conspire to drive prices up -- which makes such a conspiracy a considerably more attractive proposition.

Anyway, in the short run -- and what we have right now is a short-run gasoline shortage -

- cutting gas taxes probably won't even temporarily reduce prices at the pump. The quantity of oil available for U.S. consumption over the near future is pretty much a fixed number: the inventories on hand plus the supplies already en route from the Middle East. Even if OPEC increases its output next month, supplies are likely to be limited for a couple more months. The rising price of gasoline to consumers is in effect the market's way of rationing that limited supply of oil.

Now suppose that we were to cut gasoline taxes. If the price of gas at the pump were to fall, motorists would buy more gas. But there isn't any more gas, so the price at the pump, inclusive of the lowered tax, would quickly be bid right back up to the pre-tax-cut level.

And that means that any cut in taxes would show up not in a lower price at the pump, but in a higher price paid to distributors. In other words, the benefits of the tax cut would flow not to consumers but to other parties, mainly the domestic oil refining industry. (As the textbooks will tell you, reducing the tax rate on an inelastically supplied good benefits the sellers, not the buyers.)

A cynic might suggest that that is the point. But I'd rather think that Mr. Bush isn't deliberately trying to throw his friends in the oil industry a few extra billions; I prefer to believe that the candidate, or whichever adviser decided to make gasoline taxes an issue, was playing a political rather than a financial game.

There still remains the argument that the only good tax is a dead tax. This leads us into the whole question of whether those huge federal surplus projections are realistic (they aren't), whether the budget is loaded with fat (it isn't), and so on. But anyway, the gasoline tax is dedicated revenue, used for maintaining and improving the nation's highways. This is one case in which a tax cut would lead directly to cutbacks in a necessary and popular government service.

You could say that I am making too much of a mere political gambit. Gasoline prices have increased more than 50 cents per gallon over the past year; Mr. Bush only proposes rolling back 1993's 4.3-cent tax increase.

But the gas tax proposal is nonetheless revealing. Mr. Bush numbers some of the world's leading experts on tax incidence among his advisers. I cannot believe that they think cutting gasoline taxes is a good economic policy in the face of an OPEC power play. So this suggests a certain degree of cynical political opportunism. (I'm shocked, shocked!) And it also illustrates the candidate's attachment to a sort of knee-jerk conservatism, according to which tax cuts are the answer to every problem.

As a citizen, then, I deplore this proposal. As a college lecturer, however, I am delighted.

By PAUL KRUGMAN

Teachers of economics cherish bad policies. For example, if New York ever ends rent control, we will lose a prime example of what happens when you try to defy the law of supply and demand. And so we should always be thankful when an important politician makes a really bad policy proposal.

Last week George W. Bush graciously obliged, by advocating a reduction in gasoline taxes to offset the current spike in prices. This proposal is a perfect illustration of why we need economic analysis to figure out the true ''incidence'' of taxes: the people who really pay for a tax increase, or benefit from a tax cut, are often not those who ostensibly fork over the cash. In this case, cutting gasoline taxes would do little if anything to reduce the price motorists pay at the pump. It would, however, provide a windfall both to U.S. oil refiners and to the Organization of Petroleum Exporting Countries.

Let's start with why the oil cartel should love this proposal. Put yourself in the position of an OPEC minister: What sets the limits to how high you want to push oil prices? The answer is that you are afraid that too high a price will lead people to use less gasoline, heating oil and so on, cutting into your exports. Suppose, however, that you can count on the U.S. government to reduce gasoline taxes whenever the price of crude oil rises. Then Americans are less likely to reduce their oil consumption if you conspire to drive prices up -- which makes such a conspiracy a considerably more attractive proposition.

Anyway, in the short run -- and what we have right now is a short-run gasoline shortage -

- cutting gas taxes probably won't even temporarily reduce prices at the pump. The quantity of oil available for U.S. consumption over the near future is pretty much a fixed number: the inventories on hand plus the supplies already en route from the Middle East. Even if OPEC increases its output next month, supplies are likely to be limited for a couple more months. The rising price of gasoline to consumers is in effect the market's way of rationing that limited supply of oil.

Now suppose that we were to cut gasoline taxes. If the price of gas at the pump were to fall, motorists would buy more gas. But there isn't any more gas, so the price at the pump, inclusive of the lowered tax, would quickly be bid right back up to the pre-tax-cut level.

And that means that any cut in taxes would show up not in a lower price at the pump, but in a higher price paid to distributors. In other words, the benefits of the tax cut would flow not to consumers but to other parties, mainly the domestic oil refining industry. (As the textbooks will tell you, reducing the tax rate on an inelastically supplied good benefits the sellers, not the buyers.)

A cynic might suggest that that is the point. But I'd rather think that Mr. Bush isn't deliberately trying to throw his friends in the oil industry a few extra billions; I prefer to believe that the candidate, or whichever adviser decided to make gasoline taxes an issue, was playing a political rather than a financial game.

There still remains the argument that the only good tax is a dead tax. This leads us into the whole question of whether those huge federal surplus projections are realistic (they aren't), whether the budget is loaded with fat (it isn't), and so on. But anyway, the gasoline tax is dedicated revenue, used for maintaining and improving the nation's highways. This is one case in which a tax cut would lead directly to cutbacks in a necessary and popular government service.

You could say that I am making too much of a mere political gambit. Gasoline prices have increased more than 50 cents per gallon over the past year; Mr. Bush only proposes rolling back 1993's 4.3-cent tax increase.

But the gas tax proposal is nonetheless revealing. Mr. Bush numbers some of the world's leading experts on tax incidence among his advisers. I cannot believe that they think cutting gasoline taxes is a good economic policy in the face of an OPEC power play. So this suggests a certain degree of cynical political opportunism. (I'm shocked, shocked!) And it also illustrates the candidate's attachment to a sort of knee-jerk conservatism, according to which tax cuts are the answer to every problem.

As a citizen, then, I deplore this proposal. As a college lecturer, however, I am delighted.

Quality Assurance in Foundry

Quality Foundry was established in the mid 2000’s in a 300 square metre building with 10 people as a small family business to produce castings. In the 2000s as business grew, the company expanded its facilities and its capability to develop its own tooling patterns and eventually moved into a 4000 square metre building. Over this time period from 2000s to 2010s, the foundry industry
declined from more than 1200 companies to about 400.

With such a shrinking market, Quality Foundry began to listen more to its customers. They discovered that customers were not happy with the quality of the products supplied by them. In 2000, Quality Foundry made a commitment to quality by hiring a quality assurance manager Mr.Jim. Mr. Jim felt that the top management was committed to quality and saw an opportunity to change the company's culture. He also firmly believed in Deming's philosophy. The
first thing he did was to work with top management to develop a mission statement which reads as below: Our mission at Quality Foundry is to improve the return on investment. We can achieve this by changing attitudes and incorporating a quality team environment. This will improve the quality of our products, enhance our productivity and elevate our service and response level to our customers.

As we are in a low-growth, mature market arid the standards for competitive levels of quality and service are becoming more demanding, we must develop a strategy to improve quality and responsiveness in all areas of the company in order to improve our return on investment. We need to have all employees recognize the importance of product quality and service and move toward
more favorable pricing. We need to change thinking throughout the organization to get employees involved, to encourage team work, to develop a more flexible workforce and adaptable organization. We need to instill pride in the work place and the product.

Under Mr.Jim's direction, Quality Foundry made some substantial improvements in the quality of castings, particularly reducing scrap and reject rates. Mr.Jim worked closely with the factory workers directly responsible for the products, asking them what they needed to get the job done and ensuring management commitment to provide the necessary resources. Quality Foundry
invested in new control equipments for furnaces to control temperatures with digital read out. This helped the workers to adjust the process as needed. The success of this project led the company to empower employees to control many other aspects of the system.

Five years later, the chief executive officer (CEO) of Quality Foundry retired and the General Manager of a manufacturing company was appointed as the new CEO. The new CEO felt that the mission statement did not provide a clear direction. Consequently, he set up a new task for senior management (including Mr. Jim) to develop a new strategic vision.

Answer the following Questions with 150-200 words each.
1. Comment on the current mission statement of the company. Does it provide a strategic direction necessary for success for Quality Foundry?   

2. If you are Quality Assurance Manager, How can the mission statement be improved? Suggest a better statement of mission and vision.

Respond to the following prompt in 1500 to 2000 words:

Health care workers have an ethical responsibility to provide services that are necessary and effective and not to provide care that is ineffective, inappropriate, or harmful. At the same time, resource allocation decisions concerning the use of limited health care resources must also be made for the health care system. How can equitable and just decisions be made on the allocation of limited health care resources, and who should be involved in making such decisions?

Assume the market for plastic kitchenware in your country has the demand curve P = 2000 – 0.01Q, and the domestic supply curve P = 500 + 0.02Q. For simplicity, we ignore the exchange rate and currency difference here.

1. Quantify the domestic market equilibrium without trade.

1.1.Calculate the Quantity and Price where the Demand and Supply functions intersect.

1.2. Calculate the consumer surplus, producer surplus, and national welfare without trade.

2. Suppose that free trade is allowed and that the price your country drops to the world price Pw = 1000.

2.1. Solve for the domestic demand, domestic supply, import, and the market share of domestic producer as well as the foreign producer (import).

2.2. Calculate the consumer surplus, producer surplus, and national welfare with free trade. How does that compare to National Welfare without trading as you calculated it above?

a)

In the 1999-2000 NHANES report, the reported cancer rate for women subjects age 65 and older is 14%. Using this estimate as the true percentage of all females ages 65and over who have been told by a health care provider that they have cancer, find the probability that if 210 women are selected at random from the population, more than 20% will have been told they have cancer.

b)

In the same report, the cancer rate for men ages 65 and older is 23%. Use this estimate as the percentage of all men ages 65 and older who have been told by a health care provider that they have cancer. Find the probability that among 250 men selected at random that fewer than 20% will have been told they have cancer.

c)

Find the probability that the male cancer rate is at least 3% higher than the female cancer rate in the two samples given above.