2. Starkey Percussion, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company’s class A common stock has paid a dividend of $7.25 per share per year for the last 12 years. Management expects to continue to pay at that amount for the foreseeable future. Paul Harrison purchased 1,000 shares of Starkey class A common 10 years ago at a time when the required rate of return for the stock was 13%. He wants to sell his share today. The current required rate of return for the stock is 11%. How much capital gain or loss will Paul have on his shares?

Information from the American Institute of Insurance indicates the mean amount of life insurance per household in the United States is $130,000. This distribution follows the normal distribution with a standard deviation of $39,000.

a) If we select a random sample of 68 households, what is the standard error of the mean?

Standard Error of the Mean:

b) What is the expected shape of the distribution of the sample mean?

The distribution will be:

c) What is the likelihood of selecting a sample with a mean of at least $135,000?

Probability:

d) What is the likelihood of selecting a sample with a mean of more than $121,000?

Probability:

e) Find the likelihood of selecting a sample with a mean of more than $121,000 but less than $135,000.

Probability:

You’re a plant manager for a large company that manufactures food products, including yogurt, cereal, and granola bars (among others). Within this company, there are several factories spread across the United States and each produces one or two types of these products. You oversee many employees, but one, in particular, has caught your eye as a star performer. You decide you’d like to discuss her future with the company.

Explain how you would have this developmental conversation with the employees. What main areas should you cover? For each area, what should you be ready to discuss and what should the employee be ready to discuss?

Assigned questions:

For over two hundred years, white males have been the most powerful group in the United States. Through economic exclusions, enforced by laws and reinforced by deep cultural attitudes, there has existed, in effect, a preferential hiring program for white males. In light of that historical reality and the dynamics that remain in our culture, evaluate the contemporary strategy of affirmative action for women and minorities to bring about more fairness in hiring and promotion practices. Draw heavily from the assigned readings and then explain and defend your arguments concerning affirmative action and "reverse discrimination." REMEMBER, YOU MUST USE A THEORY TO SUPPORT YOUR POSITION.

1) The rules and laws that govern economic life are called ___________.

a) Incentives

b) Scarcity

c) Terms of Trade

d) Institutions

2) When supply increases, the supply curve shifts _______.

a) Up and to the right

b) Up and to the left

c) Down and to the right

d) Down and to the left

3) A competitive equilibrium is efficient because it maximizes ______.

a) Consumer surplus

b) Producer surplus

c) Total surplus

d) All of the above

4) Consider the market for ice cream. Which of the following would you expect to cause the equilibrium price of ice cream to increase?

a) A decrease in the price of cream

b) An increase in the prize of frozen yogurt

c) Both a and b

d) Neither a nor b

5) Which of the following would NOT be counted as part of U.S. GDP in 2017?

a) A 2016 model year car sold in the United States in 2017

b) Eggs produced in the United States in 2017 and sold to consumers

c) The wages of an American soldier

d) A hockey stick produced by a Canadian worker in Detroit

6) Which of the following variables corrects for the effects of population but no inflation?

a) Real GDP

b) Real GDP per capita

c) Nominal GDP

d) Nominal GDP per capita

7) Which of the following is TRUE?

a) There was a lot of variation in real GDP per capita across countries in the year 1000

b) There was a lot of variation in real GDP per capita across countries in the year 2016

c) Both a and b

d) Neither a nor b

8) In the Solow growth model, why do countries grow faster when their capital stock is low?

a) Countries invest a larger fraction of output when the capital stock is low

b) When the capital stock is low, it is used less intensively, causing less depreciation

c) A country's economic institutions are stronger when it has a lower capital stock

d) The marginal product of capital is higher when the capital stock is low, increasing the return on investment.

9) Which of the following countries would the Solow growth predict to have the highest growth rate?

a) A poor country with bad economic institutions

b) A poor country with good economic institutions

c) A rich country with bad economic institutions

d) A rich country with good economic institutions

10) In the Solow growth model, what can explain long-run economic growth, such as that experienced in the United States?

a) Increases in technical knowledge

b) Increases in physical capital

c) Increases in human capital

d) Increases in investment rate

Traffic congestion seems to worsen each year. This raises the question, How much does roadway congestion cost the United States annually? The Federal Highway Administration's Highway Performance Monitoring System conducts an analysis to produce an estimate of the total cost. Drivers in the 73 most congested areas in the United States were sampled, and each driver's congestion cost in time and gasoline was recorded. The total number of drivers in these 73 areas was 128,000,000.

a. Estimate with 95% confidence the total cost of congestion in the 73 areas. (Adapted from the Statistical Abstract of the United States, 2006, Table 1082.)

b. If an organization claims that the total cost of congestion in the 73 areas is greater than $420, do you agree with it based on this sample result?

c. If an organization claims that the total cost of congestion in the 73 areas is less than $450, do you accept it based on this sample result?

Cost ($) 749 381 461 247 252 501 653 507 293 534 308 669 257 375 327 377 301 604 372 237 558 242 382 392 562 557 356 250 314 575 509 456 261 455 328 527 483 508 483 331 402 253 371 587 526 297 455 260 470 749 443 746 314 186 418 280 648 411 509 434 326 420 439 489 465 556 224 336 364 485 409 314 384 262 321 474 393 354 430 615 331 384 510 491 545 527 490 473 447 229 280 538 577 351 266 511 495 532 756 394 364 332 444 302 614 354 314 327 517 252 204 556 410 517 541 439 246 79 575 444 269 451 331 531 227 379 382 411 439 676 330 504 332 493 498 349 415 343 489 331 459 436 482 443 462 480 485 284 380 412 355 441 473 599 374 537 356 585 414 293 760 362 372 497 356 454 422 443 445 310 230 586 401 354 381 322

A poll surveyed people in six countries to assess attitudes toward a variety of alternate forms of energy. Suppose the data in the following table are a portion of the poll's findings concerning whether people favor or oppose the building of new nuclear power plants.

(a)

How large was the sample in this poll?

(b)

Conduct a hypothesis test to determine whether people's attitude toward building new nuclear power plants is independent of country.

State the null and alternative hypotheses.

H₀: The attitude toward building new nuclear power plants is mutually exclusive of the country.
H_a: The attitude toward building new nuclear power plants is not mutually exclusive of the country.

H₀: The attitude toward building new nuclear power plants is not independent of the country.
H_a: The attitude toward building new nuclear power plants is independent of the country.

H₀: The attitude toward building new nuclear power plants is independent of the country.
H_a: The attitude toward building new nuclear power plants is not independent of the country.

H₀: The attitude toward building new nuclear power plants is not mutually exclusive of the country.
H_a: The attitude toward building new nuclear power plants is mutually exclusive of the country.

Find the value of the test statistic. (Round your answer to two decimal places.)

Find the p-value. (Round your answer to four decimal places.)

p-value =

State your conclusion.

Do not reject H₀. We conclude that the attitude toward building new nuclear power plants is not independent of the country.

Reject H₀. We conclude that the attitude toward building new nuclear power plants is not independent of the country.   

Do not reject H₀. We cannot conclude that the attitude toward building new nuclear power plants is independent of the country.

Reject H₀. We cannot conclude that the attitude toward building new nuclear power plants is independent of the country.

(c)

Using the percentage of respondents who "strongly favor" and "favor more than oppose," which country has the most favorable attitude toward building new nuclear power plants?

Great Britain or France or Italy or Spain or Germany or United States

Which country has the least favorable attitude?

Great Britain or France or Italy or Spain or Germany or United States

Take a few minutes to look over the following image. In daily life, many of us have noticed an interaction like this at one time or another. There’s no question that we live in an unequal society when we observe such stark differences in wealth and status. Yet what explains such drastic disparities in people’s fortune? Why do some become wealthy while others endure such harsh poverty?

In U.S. culture, we hear a lot of “rags to riches” stories that celebrate individuals who start off poor and then become wealthy through hard work, intelligence, and sheer determination. In fact, polling by the PEW Charitable Trusts revealed that 40% of Americans consider it common for people in the United States to start poor and achieve wealth by working hard.

Sociologists consider such success stories as examples of what they call upward social mobility. But are such stories based in reality? Is social mobility achievable for anyone? Do all people who wind up wealthy or poor have only themselves to credit?

Read each of the following statements regarding issues of social mobility in the United States. Select whether you agree or disagree with each statement. You will receive one point for answering each question.

Statement 1

Although there used to be a great deal of racial discrimination in U.S. society, this no longer applies today. Knowing a person’s race or ethnicity doesn’t tell you much about whether that person is more or less likely to be economically successful.

Agree

Disagree

Statement 2

There’s no predicting who will wind up wealthy or poor in life. Some who get college degrees remain poor, while others who never graduate high school make a fortune off a great idea or by working really hard. In the end, educational credentials don’t really matter that much.

Agree

Disagree

Statement 3

There’s no predicting who will wind up wealthy or poor in life. Some people who are born rich lose everything through bad decisions or bad luck, while others who are born poor work their way up to the top. Knowing the level of wealth a person starts with in life tells you almost nothing about where that person will likely end up.

Agree

Disagree

Statement 4

Although there used to be a lot of discrimination against women in the United States, this no longer applies today. Knowing whether a person is male or female doesn’t tell you much about whether he or she is more or less likely to be economically successful.

Agree

Disagree

The answer to the first part of the question posed may be Tesla Inc., the U.S. electric automobile manufacturer founded in 2003 and headquartered in Palo Alto, California. The answer to the second part of the question may be “by matching internal strengths/weaknesses with external opportunity/ threats” using SWOT analysis. For the first time ever, in 2017, Tesla joined the Fortune 500 largest companies in the United States; the company’s annual revenues exceed $7 billion. An integral part of Tesla’s excellent strategic plan is to capitalize on the 6.5 percent annual gross domestic product (GDP) growth in China, compared to the GDP growth of about 2 percent in the United States. Tesla’s sales in China skyrocketed in recent years as CEO Elon Musk of Tesla capitalizes heavily on the firm’s technological prowess (internal strength) matched with China’s booming GDP (external opportunity) and China’s strong preference for electric vehicles (external opportunity). In 2016, sales of electric and plug-in hybrid automobiles in China rose 50 percent to 507,000, more than triple the comparable figure in the United States. Electric vehicles are viewed in China as a way to help clear smoggy skies (an external opportunity), and that is a primary reason why China’s government has ex-empted electric cars from rigid license plate restrictions in six large cities: Shanghai, Beijing, Shenzhen, Hangzhou, Guangzhou, and Tianjin; these six cities report the highest Tesla sales. Tesla’s strategic plan includes manufacturing cars in China by the end of 2018, because shipping cars from California to China is costly. Tariffs and taxes incurred to export cars to China increases the price of Tesla sedans and SUVs by 50 percent (external threat). The number of electric vehi-cle charging stations in China exceeds one thousand (external opportunity). Tesla mass produces its Model X SUV because China’s obsession with SUVs is a decade old and growing rapidly. Sales of SUVs in China now comprise nearly 40 percent of all passenger-vehicle sales in that country. Turning to Australia, Tesla recently supplied the largest battery in the world to Jamestown, Aus-tralia. The battery is storing electricity from a new wind farm that supplies thirty thousand homes with power. The battery has a 100-megawatt capacity. Tesla’s strategic plan is for the whole world to use its batteries in cars, trucks, homes, and businesses.

Questions:

- Identify several internal strengths and weaknesses that face Tesla.

- Match several of your external and internal factors to formulate several strategies that Tesla is (or could) use going forward.

>> General Motors, two years after it was saved by U.S. government bailout, is trumping its last investments in China, of all places. CBS News business and economics correspondent, Rebecca Jarvis, is in Shanghai, China with more on the American automaker's big Asian announcement.

>> Rebecca Jarvis: Here on the streets of Shanghai, American cars are more popular than ever. In fact, the U.S. automakers like General Motors sell more cars here than anywhere else in the world, and while that's good news for the American car companies, it makes many question what it will mean for American jobs. [background noise] Visit General Motors in Shanghai, and you'll find a lot of what you would in Detroit.

>> Rebecca Jarvis: So how similar does this plant look to one in the United States?

>> It's very similar. I mean, the processes are the same, the systems are the same, the quality systems are the same. Really, the only difference are the employees -

>> Rebecca Jarvis: With its Chinese partner, SAIC, GM manufacturers Buicks, Chevys, and Cadillacs in China for their Chinese market that employs more than 13,000 people throughout the country. On Wednesday, GM opened an advanced technology center in Shanghai meant to help it design lighter, safer, and more efficient cars for a market that has proved crucial to its survival.

>> Rebecca Jarvis: How important is being here in China to General Motors and the future of your business?

>> It's obviously very important. This is a strong growth market. It's a growth industry. We're here in China to [inaudible] local market.

>> Rebecca Jarvis: Last year, Chinese consumers bought 16.6 million cars. That's five million more than the number of cars sold in the entire United States. So far, all of the cars GM sells in the U.S. are also made there.

>> Rebecca Jarvis: Do you see a time or a day when GM could be producing cars here and shipping them back to the U.S.?

>> I think right now we have our hands full just producing cars for the local market.

>> Rebecca Jarvis: While General Motors won't say whether eventually those electric vehicles are going to be produced for the United States here in China, clearly, China has a competitive advantage. Lower costs and skyrocketing sales.

How would you characterize the alliance between GM and SAIC Shanghai?

What has driven the GM alliance in Shanghai?

How is the VRIO framework established within the GM alliance in Shanghai?

How can GM combat opportunism that may occur from being in the China market?

What will determine successful performance from the alliance?