True/False

1. Full employment exists only when the unemployment rate is 0.
2. GDP is a nominal measurement
3. If price level falls over the given time period, purchasing power has fallen
4. Long-Run Aggregate Supply Curve shows production at the level of potential real GDP
5. The CPI of the base year is 100
6. A change in Quantity Demanded of Real GDP is driven by a change in the price level, ceteris paribus
7. As interest rates rises, both consumption and investment rise so thereby AD rises
8. Net exports is (Imports-Exports)
9. One formula for computing real GDP is: Real GDP=Sum of (Base year prices x Current Year Quantities)
10. Per capita GDP is computed by dividing GDP by the population
11. Long-Run Aggregate Supply curve is upward sloping

Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2017. Its inventory at that date was $440,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:

                                             Inventory at                 Current

            Date                       Current Prices             Price Index(%)

December 31, 2018                  $513,600                       107

December 31, 2019                   580,000                       125

December 31, 2020                   650,000                       130

   4- What is the cost of the ending inventory at December 31, 2018 under dollar-value LIFO?

a.   $480,000.

b.   $513,600.

c.   $482,800.

d.   $470,800.

e. None of the above

    5- What is the cost of the ending inventory at December 31, 2019 under dollar-value LIFO?

a.   $464,000.

b.   $462,800.

c.   $480,000.

d.   $465,680.

             e. None of the above

Q2.                                      
International Brands Ltd. Is operating at 60% capacity and producing 2,700 pieces of product A. The cost of production for the month of August 2012 was:
                       Rs.
Direct Material                54,000
Direct wages                   8,100
Variable Overheads               9,900
Fixed Overheads               18,000

The products are currently sold at an average price of Rs. 72.

A tender for supply of 900 pieces per month has been received. To submit tender the following information has been ascertained.

•   Variable Overheads attributable to various activity level is:

   %                   Per month Rs.  
   50                       8,280
   60                       9,900
   70                       11,520
   80                       13,500
   90                       15,300
   100                       16,920

Required:                                       (Mark 5)

(a)   Calculate the bidding price which will yield a 10% profit.
(b)   Prepare a statement showing the effect on the monthly profit if the company’s tender is    accepted.

You are given the following global market data.

The world price for a good is 40 and the domestic demand-and-supply curves are given by the following equations:

Demand: P=100-0.5Q
Supply: P=70+0.4Q

where P=price and Q=quantity

1. Calculate how much is consumed.
2. Calculate how much is produced in the home economy.
3. Fine the consumer surplus and producer surplus.
4. If a tariff of 20 percent is imposed, by how much do consumption and domestic production change?
5. How much revenue does the government earn from the tariff?

I got calculations for # 1 and #2, but the negative for quantity is confusing me on how to graph this so I can't calculate consumer surplus or producer surplus without the graph. can someone please help?

Suppose that the market for rutabagas (in case you don’t know, it is a root vegetable that’s also known as Swedish Turnip) is competitive. The demand for rutabagas is Q = 2, 000 − 100P and the supply of rutabagas is Q = −100 + 200P.

(a) (10 points) Suppose that Governor Sloop imposes a $2 per unit tax to be paid by consumers. Who bears the statutory incidence of the $2 per unit tax? Who bears the economic incidence of this tax? [A graph can be helpful but not required.]

(b) (5 points) What is the deadweight loss of the tax?

(c) (10 points) Suppose now that Governor instead imposes that the $2 unit tax is to be paid by the stores directly. What will happen to the “sticker price” (i.e. price paid by consumers) on rutabagas? Verify that the consumers’ tax burden would stay the unchanged.

You are bullish on Amazon’s stock (AMZN) which is currently selling for $1596.50. You have decided to buy a 6-month call option with a strike price of $1,625. It costs $50.60 per share to buy the option. Assume the 6-month risk-free rate is 1% per annum with continuous compounding. a.Draw the profit and payoff function for the long call option at expiration? (Provide labels for the axes and label a point on the functions above, below and at the strike) b.Note each contract is for 100 call options. Calculate what the payoff and profit at expiration is if the spot price is _______.

i.$1,550

ii.$1,700

iii.$1,675.60

c.Draw the profit and payoff function for the short call option at expiration? (Provide labels for the axes and label a point on the functions above, below and at the strike)

1). ABC Corporation’s stock price is trading at $75. If the company's last dividend payment was $5 what is the dividend grow rate average into the foreseeable future if required rate of return is 12% ?

2). Suppose Barbara looks out in the morning and sees a clear sky so decides that a picnic for lunch is a good idea. Last night the weather forecast included a 100% chance of rain by midday but Barbara did not watch the local news program. Is Barbara's prediction of good weather at lunch time rational? Why or why not?

3). If a corporation announces that it expects quarterly earnings to increase by 25% and it actually sees an increase of 22%, what should happen to the price of the corporation's stock if the efficient markets hypothesis holds, everything else held constant?

The annual demand for admission kits for patients with infectious conditions such as methicillin-resistant staphylococcus aureus (MRSA) and C-diff is 2,200. The purchase price of a kit is $80. The holding cost per unit per year is 20% of the item’s price, and the cost of placing an order is $20. Currently, the kits are ordered by the supply team in quantities of 200 and delivered by the supplier two weeks later. The supply team places orders to their supplier when inventory reaches 100. Demand is uncertain and the standard deviation of weekly demand is 15.





Should the hospital carry any safety stock of admission kits? What level of safety stock do you recommend






. What changes do you propose to the current ordering policy of the supply team? What would be the impact on total annual cost (ordering and holding)