Bob’s Adirondack is one of approximately 85 companies worldwide producing 100% natural wood Adirondack chairs. Despite trying to differentiate their product, Bob’s has found that they can only charge the market price for their chairs.

1. a. Add columns to the spreadsheet and make the appropriate calculations for Average Fixed Cost, Average Variable Cost, Average Total Cost and Short-Run Marginal Cost.

b. Assuming the market clearing price is $160, calculate Total Revenue, Marginal Revenue, Profit and Profit Margin for Bob’s Adirondack.

c. If the CEO of Bob’s wants to minimize ATC, what quantity should they produce? What if he wants to maximize profit margin?

d. You become the CEO, after the prior executive is fired, what quantity do you recommend the firm produce? Why?

e. Now, change the total fixed costs to $20,000. How does this change the optimal quantity of chairs to produce? Explain

Q TC TFC TVC

0 $5,000 $10,000 $0

100 $14,900 $10,000 $4,900

200 $23,800 $10,000 $13,800

300 $31,700 $10,000 $21,700

400 $42,600 $10,000 $32,600

500 $54,500 $10,000 $44,500

600 $70,400 $10,000 $60,400

700 $88,300 $10,000 $78,300

800 $108,200 $10,000 $98,200

900 $130,100 $10,000 $120,100

1000 $154,000 $10,000 $144,000

Year       Cauliflower         Broccoli                   Carrots

               P      Q                     P          Q                 P               Q

2013       $2     100             $1.50     25                $0.10         450

2014       $3      120             $1.50    50                 $0.20         550

2013 is the base year. The BLS quantity number is 100 cauliflower   50 broccoli    500 carrots

In the text box below SHOW ALL WORK for questions 1 & 2 and underline answers for both years, CPI and Inflation Levels and GDP Deflator and Inflation Levels. Answer Question 3 by using what you have learned about the differences in the two methods.

1)Find the basket costs for 2013 and 2014; calculate the Consumer Price index for each year; calculate the rate of inflation from 2013 to 2014. Underline your answers for the Consumer Price Index and the rate of inflation.   

2)Find the Nominal GDP and Real GDP for 2013 and 2014; Calculate the GDP Deflator for 2013 and 2014; find the rate of inflation from 2013 to 2014. Underline your answers for GDP Deflators and the inflation rate.

3) Are your inflation rates the same in each approach? Why or why not? Use the ABCD method to help you in the analysis.

I'm looking for a thorough breakdown of what came where in answering this question. If anyone is up for the challenge, please help me figure this out. Thank you

Year       Cauliflower         Broccoli                   Carrots

               P      Q                     P          Q                 P               Q

2013       $2     100             $1.50     25                $0.10         450

2014       $3      120             $1.50    50                 $0.20         550

2013 is the base year. The BLS quantity number is 100 cauliflower   50 broccoli    500 carrots

In the text box below SHOW ALL WORK for questions 1 & 2 and underline answers for both years, CPI and Inflation Levels and GDP Deflator and Inflation Levels. Answer Question 3 by using what you have learned about the differences in the two methods.

1)Find the basket costs for 2013 and 2014; calculate the Consumer Price index for each year; calculate the rate of inflation from 2013 to 2014. Underline your answers for the Consumer Price Index and the rate of inflation.   

2)Find the Nominal GDP and Real GDP for 2013 and 2014; Calculate the GDP Deflator for 2013 and 2014; find the rate of inflation from 2013 to 2014. Underline your answers for GDP Deflators and the inflation rate.

3) Are your inflation rates the same in each approach? Why or why not? Use the ABCD method to help you in the analysis.

I'm looking for a thorough breakdown of what came where in answering this question. If anyone is up for the challenge, please help me figure this out. Thank you

On June 1, Maureen sent a letter to Joel that offered to sell 10 000 shares in Tadpole Inc (a computer software company) for $5 each. Her letter did not require Joel to respond by any particular date. On June 3, Tadpole Inc publicly announced that its engineers had perfected a new technology that would revolutionize the electronic commerce industry. On June 5, Joel returned from his cottage and learned of both Maureen's offer and the price of Tadpole Inc shares. He promptly sent a letter to Maureen that said, "I accept your offer. I will pay a total of $50 000 for 10 000 shares in Tadpole Inc." and proceeded to sell 100 shares in stock in Apple Computers to pay for it. By June 6, the price of a single share in Tadpole had increased to $100. Maureen immediately mailed Joel a letter withdrawing her offer. On June 7, Apple announced its new IPhone and its stock immediately increased by $300 per share. On June 8, Maureen received Joel's letter accepting the contract. On June 9, Joel received Maureen's letter withdrawing her offer. Maureen refuses to sell Joel the Tadpole stock. Should Joel sue Maureen for breach of contract? If so would he be successful and what are his remedies? Can Joel recover even if he would not be successful for breach of contract?

The following data relate to a manufacturing department for a period:

Budgeted data for the coming year are as follows:

Direct labour hours 60,000 hours

Direct labour cost $110,000

Direct material cost $125,000

Production overhead $70,400

Actual data for the period are as follows:

Direct labour hours 55,500 hours

Direct labour cost $125,000

Direct material cost $150,000

Production overhead $67,800

Required:

(7A) Calculate the production overhead absorption rate predetermined for the period based on :

1. Percentage of direct material cost;
2. Direct labour hours

(7B) Two pieces of furniture are to be manufactured for customers. Direct costs are as follows:

Job 400                                                            Job 401

Direct material           $15,400                                                           $10,800

Direct labour   210 hours Dept. A @$16/ hour:          160 hours Dept. A @20/hour

120 hours Dept. B @$12/hour;                                  100 hours Dept. B @$18/hour

100 hours Dept. C @$14/hour;                                  140 hours Dept. C@$10/hour

Selling and administrative overheads for each job are 10% of factory cost.

Required:

(7C)     Calculate the total costs of each job using all the two bases in question (7A) above.

(7D) If the firm quotes prices to customers that reflect a required profit of 25 per cent on selling price, calculate the quoted selling price for each job.

Jane has 2,000 hours that she can allocate to work (H) or to leisure (L), so H+L=2,000. If she works, she receives an hourly wage of $10. Any income she earns from working, she spends on food (F), which has price $2. Jane’s utility function is given by U(F,L) = 150*ln(F)+100*ln(L). The government runs a TANF program, which is defined by a benefit guarantee (BG) of $5,000 and a benefit reduction rate (BRR) of 50%.

1. How many hours, H*, does she have to work to become ineligible for the program?

2. Draw Jane’s budget constraint on a graph with food units on the y axis and leisure units on the x axis. (Be careful: note that the price of food is $2, not $1!).

c. Write down a piecewise function for Jane’s effective wage.

4. Assume that Jane works more than H* hours (your answer from part a) and

   therefore is ineligible for TANF. What bundle of food and leisure would she choose? What would her utility level be as a result? (Note that ??/?? = 150/?and??/?? = 100/?).

5. Assume that Jane works fewer than H* hours and therefore participates in TANF. What bundle of food and leisure would she choose? What would her utility level be?

6. Compare the utility levels computed in parts (d) and (e). Would Jane choose to participate in TANF or not?

Company A has a market value of equity of $2,000 million and 80 million shares outstanding. Company B has a market value of equity of $400 million and 25 million shares outstanding. Company A announces at the beginning of 2019 that is going to acquire Company B.

The projected pre-tax gains in operating income (in millions of $) from the merger are:

The projected pre-tax gains in operating income are expected to grow at 4% after year 2023. The company is using a discount rate of 8% to value the synergies. The marginal corporate tax rate is 35%.

Company A has decided to pay a $300 million premium for Company B. Assume that capital markets are efficient and that there is a 100% probability the deal will be closed.

1/ By how much the price per share of Company A would change at the time of the announcement of the acquisition?

2/ If Company A were to make a 100% stock offer for Company B, what would the exchange ratio be? Remember that the exchange ratio is the number of Company A’s shares that the shareholders of Company B will receive in exchange for each of their shares.

3/ If Company A were to offer 0.80 share of Company A for each share of company B, by how much the price per share of Company A would change at the time of the announcement of the acquisition?

The Fashion Store sells fashion items. The store has to order these items many months in advance of the fashion season in order to get a good price on the items. Each unit costs Fashion $100. These units are sold to customers at a price of $250 per unit. Items not sold during the season can be sold to the outlet store at $80 per unit. If the store runs out of an item during the season it has to obtain the item from alternative sources and the cost including air freight to Fashion is $190 per unit. What is the initial order quantity that maximizes the profit for the Fashion Store? x f(x) 61 0.01 62 0.01 63 0.01 64 0.01 65 0.01 66 0.02 67 0.02 68 0.02 69 0.02 70 0.03 71 0.03 72 0.03 73 0.04 74 0.04 75 0.04 76 0.04 77 0.04 78 0.04 79 0.04 80 0.04 81 0.04 82 0.04 83 0.04 84 0.04 85 0.03 86 0.02 87 0.02 88 0.03 89 0.02 90 0.02 91 0.02 92 0.02 93 0.01 94 0.01 95 0.01 96 0.01 97 0.01 98 0.01 99 0.00 100 0.00 101 0.00 102 0.00 103 0.00 104 0.00

In the table below we present the production possibility for two countries, A and B, who can both produce milk and soda. The number in the cell refers to the amount they can produce if they dedicated 100 per cent of their time to produce that good. So, country A can produce 40 litres of milk at most, and B can produce 20 litres of it at most.

Table – Production Possibility – 100 percent time on each product

1. What is absolute advantage? Who has absolute advantage in milk and in soda?
2. What is opportunity cost? State the opportunity cost of each country for milk and soda.
3. What is comparative advantage? Who has comparative advantage in milk and in soda?
4. Can a country have comparative advantage in both products? Explain why.
5. Presently without specialization, each of them spends 50 per cent of their time producing milk and soda. Show how much each country is producing in a table. Suppose after specialization Country A spends 70 per cent of the time producing milk, while Country B spends 75 per cent of the time producing soda. Will they be better off by trading? What is the minimum price that Country B will accept for soda? What is the maximum price that Country A will pay for Soda? [Hint: the prices are not in Dollar terms but in terms of the other good]

Queues are often used to represent lists of things that are being processed according to the order in which they arrived -- i.e. "first come, first served".  

Assignment

Write a program that simulates the minute-by-minute operation of a checkout line, such as one you might find in a retail store. Use the following parameters:

1) Customers arrive at the checkout line and stand in line until the cashier is free.

2) When they reach the front of the line, they occupy the cashier for some period of time (referred to as ServiceTime) measured in minutes.

3) After the cashier is free, the next customer is served immediately.

4) Customers arrive at the checkout line at ArrivalRate per minute. Use the function included below (randomChance()) to return the number of customers arriving in a given minute, determined randomly.

5) The line can only hold so many people, MaxLineSize, until new arriving customers get frustrated and leave the store without purchasing anything.

6) ServiceTime is determined at the point the customer reaches the cashier, and should be taken from the random interval MinServiceTime and MaxServiceTime -- use the function randomInt() provided.

7) The overall time of the simulation is SimulationTime, measured in minutes.

The program should take 6 inputs (to be read from a text file named simulation.txt, as numbers only, one per line, in this order):

- SimulationTime - total number of minutes to run the simulation (whole number).

- ArrivalRate - per-minute arrival rate of customers (a floating point number greater than 0 and less than 1). This number is the "percent chance" that a customer will arrive in a given minute. For example, if it is 0.4, there is a 40% chance a customer will arrive in that minute.

- MinServiceTime - the minimum expected service time, in minutes (whole number).

- MaxServiceTime - the maximum expected service time, in minutes (whole number).

- MaxLineSize - the maximum size of the line. If a new customer arrives and the line has this many customers waiting, the new customer leaves the store unserviced.

- IrateCustomerThreshold - nobody enjoys standing in line, right? This represents the number of minutes after which a customer becomes angry waiting in line (a whole number, at least 1). These customers do not leave, they only need to be counted.

At the end of each simulation, the program should output:

- The total number of customers serviced

- The total number of customers who found the line too long and left the store.

- The average time per customer spent in line

- The average number of customers in line

- The number of irate customers (those that had to wait at least IrateCustomerThreshold minutes)

You are free to use any STL templates as needed (queue or vector, for example).

An example input file is posted in this week's Module here.

Example Run

The output should look similar to this:

Simulation Results
------------------
Overall simulation time:     2000
Arrival rate:                 0.1
Minimum service time:           5
Maximum service time:          15
Maximum line size:              5

Customers serviced:           183
Customers leaving:             25
Average time spent in line: 33.86
Average line length:         3.15
Irate customers                10

What to Submit

Submit your .cpp file (source code for your solution) in Canvas.

Random Functions

Use these provided functions for generating your random chance (for a customer arrival) and interval for service times.

bool randomChance(double prob) { 
    double rv = rand() / (double(RAND_MAX) + 1); 
    return (rv < prob); 
} 

int randomInt(int min, int max) { 
    return (rand() % (max - min) + min); 
} 

Before calling these functions be sure to seed the random number generator (you can do this in main()):

srand(time(0));

Outline:

#include <iostream>
#include <queue>

using namespace std;

int main()
{
queue<int> myQ;

// For each test case, do a loop like this:
for (int i = 0; i < SIMULATION_TIME; i++) {
if (randomChance(ARRIVAL_RATE)) {

// Did a customer arrive in this minute?
// If so, put them on the queue
// - Is the queue full? If so, they left.
// If not, continue with rest of the loop

// Checking on the checkout line:
// - Is the current person done?
// - If so, take the next person
// - Get
// - Record how long they waited
// - Generate a random for how long
// they will take at the checkout

// Record various metrics:
// - Average wait time
// - Is the customer irate?
// - Average queue length
// - Increment number of customers serviced
// - How many left because the line was full?

}

// Print a report here

return 0;
}

Test input:

2000
0.10
5
15
5
20
10000
0.05
5
15
5
18
2000
0.20
5
20
10
10
2000
0.20
1
5
10
25
20000
0.50
1
2
50
10