For most consumers, maximizing utility through consumption generally means finding good deals in order to maximize the utility received for each dollar spent. However, some makers of luxury goods believe that their customers actually achieve utility by paying high prices, such that lowering prices may lead to reduced sales. How is this counterintuitive view rationalized in our analysis of consumer behavior and the utility-maximizing rule?

Q2. A warehouse facilitates the reduction of the order cycle time of raw materials or consumer goods required for a factory or retail outlet respectively.

Please explain how this is achieved. (30marks)

- Reduce travel time.

- Shift resources around the facility to the areas of the most activity.

- Throttle orders to areas that are underutilized and which have idle resources.

- Implement technology that will prevent stock outs and prioritize replenishments before they occur.

A some association On-Line Discount Broker Survey polls members on their experiences with discount brokers. As part of the survey, members were asked to rate the quality of the speed of execution with their broker as well as provide an overall satisfaction rating for electronic trades. Possible responses (scores) were no opinion (0), unsatisfied (l), somewhat satisfied (2), satisfied (3), and very satisfied (4). For each broker summary scores were computed by calculating a weighted average of the scores provided by each respondent. A portion of the survey results follow

b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? The scatter diagram indicates a _______ linear relationship between speed of execution rating and overall satisfaction rating for electronic trades.
c. Develop the least squares estimated regression equation. Enter negative value as negative number.
Satisfaction = ____ + ____ speed?
(to 4 decimals)

d. Provide an interpretation for the slope of the estimated regression equation (to 4 decimals).
The slope of the estimated regression line is approximately ______. So, a one unit ________in the speed of execution rating will increase the overall satisfaction rating by approximately_______points.

e. Suppose Thinkorswim developed new software to increase their speed of execution rating. If the new software is able to increase their speed of execution rating from the current value of 2.7 to the average speed of execution rating for the other 10 brokerage firms that were surveyed, what value would you predict for the overall satisfaction rating? ____________ (to 3 decimals)

Section 1: True/False, & explain why in two or three sentences:

4. You are trying to forecast the quarterly US dollar-Euro exchange rate as a function of the difference between US & EU benchmark interest rates in this quarter and the previous quarter. This is an autoregressive distributed lag model.

A big topic in the debate over potential reforms to the US healthcare system is whether or not the US should switch to a single-payer system. Indeed, we already have such a system in Medicare. What’s more, Medicare is larger than most (if not all) existing national health systems. As most of you know our health spending per capita is much higher in the US than in other developed countries.

Question 1: explore the difference between the cost of Medicare (for elderly in the US) versus the costs of health care for the elderly in other countries like Canada, France, or Switzerland. The question is, “How can we make an apples-to-apples comparison?” How you could conceivably use existing information to get comparisons of the cost of healthcare for the elderly under Medicare versus care for just the elderly in some other country or countries. (Basically, how to break out just the elderly portion of the costs for the Swiss system, or the Canadians, etc.) Clearly, differences in the quality of healthcare delivery are a big issue and there are complex issues involved in comparing quality (for example, because of differences in obesity, murder rates, and genetics, it’s problematic to use population longevity as a measure of healthcare quality). But for this question you can ignore issues of quality.

When an individual is standing still on two feet, they are said to be stable. 1) Discuss the how the movement of the center of gravity over the person’s feet in response to an external torque relates to stability. 2) Mechanically speaking, what will happen if the center of gravity moves outside of this base of support? 3) Using the Newton’s third law, what are some things you can do in this scenario to prevent yourself from falling? Give specific examples.

Popular songs indicate that we "fall in love" as if we do not have any control over it. Discuss if this is so. Discuss one theory or study presented in the text on interpersonal attraction or love. What increases or decreases it? Include an evaluation of whether "falling in love" is a decision or a feeling, or both. Include one factor that plays a role in maintaining relationships long-term. What makes long-term relationships different than short-term?

A spherical raindrop 1.9 mm in diameter falls through a vertical distance of 5000 m. Take the cross-sectional area of a raindrop = ?r², drag coefficient = 0.45, density of water to be 1000 kg/m³, and density of air to be 1.2 kg/m³.

Calculate the speed a spherical raindrop would achieve falling from 5000 m in the absence of air drag.

What would its speed be at the end of 5000 m when there is air drag?

Introduction - AdCreate's Client Portfolio. Read the overview below and complete the activities that follow.

AdCreate is a full-service advertising agency with several high profile marketing firms as clients. Given their vast client list and the varied services they provide to different clients, they are compensated differently by different clients. Jacob Stein, who recently joined AdCreate in the finance department, was asked to review the various compensation models being used by some of AdCreate's biggest clients.

CONCEPT REVIEW: The type and amount of services an ad agency performs vary from one client to another. As a result, agencies use a variety of methods to get paid for their services. Agencies are typically compensated in three ways: commissions, some type of fee arrangement, or percentage charges.

Case Analysis

Agency Compensation Methods:

Read the report below, which provides a summary of AdCreate's compensation agreements with four of its major clients, and answer the questions that follow. NOTE: There may be more than one answer to each question. You MUST list all potential answers for full marks.

AdCreate has a negotiated commission system agreement with Worry Free Financial. Worry FreeFinancial advertises on T.V. mainly and has the following sliding scale for media commissions in its agreement with AdCreate: 15% commission for media expenditures of less than $ 300,000, 12.5%commission for media expenditures between $ 300,000 and $ 400,000 and 10% commission for media expenditures above $ 500,000.

AdCreate has a cost-plus agreement with Still Water Furnishings. Under the cost-plus terms, AdCreate uses a mark up of 13% for services provided to Still Water Furnishings.

With Anchor Motors, AdCreate has an incentive-based agreement. Under the terms of this agreement, AdCreate gets to keep the full 15% commission from media if Anchor Motor's sales for the period of advertising show an increase of 5% or greater compared to sales in the same period the previous year. For sales increase between 3% and 5%, AdCreate gets to keep 13% out of the 15% media commission. Finally, for sales increase between 1% and 3%, AdCreate gets to keep 10% out of the 15% media commission.

AdCreate has a percentage charges agreement with Globe Travel Adventures. Under these terms, AdCreate charges a mark up of 17.65% on services from outside providers like printers, photographers, etc.

Please explain your answers, and why you chose that specific answer over others.

Question 1.

AdCreate has negotiated a rate of 12.5% for a commission system payment, with Worry Free Financial for a campaign in 2010. AdCreate arranged for airing three ads, during Newshour on CNN, in the first week of the launch campaign. AdCreate's income for these three ads in the first week was $49,375. Based on this information, which of the following is true?

• I. The client (Worry Free Financial) paid AdCreate $425,625 for the three ads

• II. AdCreate paid CNN $425,625 for the three ads

• III. AdCreate paid CNN $345,625 for the three ads

Question 2.

Under the cost-plus agreement that AdCreate has with its client Still Water Furnishings, Jacob Stein noticed that AdCreate incurred costs of $625,000 for a print and direct mail campaign during 2010. Under the cost-plus terms, AdCreate used a mark up of 13% for services provided to Still Water Furnishings. Based on this information, which of the following is true?

• a. The client (Still Water Furnishings) paid AdCreate $706,250 in 2010

• b. AdCreate's income from the Still Water Furnishings account in 2010 was $81,250

• c. The client (Still Water Furnishings) paid AdCreate $700,000 in 2010

Question 3.

In reviewing the incentive-based agreement between AdCreate and Anchor Motors, Jacob Stein found that sales of Anchor rose 5.2% compared to the previous year in the second quarter. AdCreate paid the media $895,000 for Anchor Motors ads during the same period. Based on this information, which of the following is true for the second quarter billings?

• a. AdCreate billed Anchor Motors $1,152,941 for the second quarter in 2010

• b. AdCreate's income from the Anchor Motors account for the second quarter of 2010    

       was $257,941

• c. AdCreate billed Anchor Motors $1,052,941 for the second quarter in 201

Question 4.

In reviewing the agreement between AdCreate and Anchor Motors, Jacob Stein found that sales of Anchor rose 2.8% compared to the previous year in the third quarter. AdCreate paid the media $450,000 for Anchor Motors ads during the same period. Based on this information, which of the following is true for the third quarter billings?

• 1. AdCreate billed Anchor Motors $502,941 for the third quarter in 2010

  2. AdCreate's income from the Anchor Motors account for the third quarter of 2010 was $79,412

• 3. AdCreate billed Anchor Motors $529,412 for the third quarter in 2010

• Question 5.

In reviewing the percentage charges agreement between AdCreate and Globe Travel Adventures, Jacob Stein found that AdCreate paid a printing firm $220,000 for a direct mail brochure for Globe Travel Adventures in 2010. Based on this information, which of the following is true?

• 1. AdCreate's income from Globe Travel Adventures in 2010 was $28,830

• 2. The mark up of 17.65% of the cost amounts to a 15% commission

3. AdCreate billed Anchor Motors $258,830 in 2010