Assignment Task Three

Penny Farthing is 40 years old and an Australian resident for tax purposes. Following the death of her spouse in 2019 she has remained single and assumed sole care of their two children Kim (aged 11) and Kerry (aged 3). The children receive no income. On October 31, 2019 Penny resigned from her job as a nurse at Newcastle’s John Hunter Hospital and moved her family to commence new employment at the Alice Springs Base hospital in the Northern Territory. Her employment at Alice Springs base hospital commenced on 15 November, 2019 - the date she settled with her family in rented accommodation in the town of Alice Springs. Penny is leasing the home she owns in Newcastle through a real estate agent.

Details of Penny’s receipts and payments for the year ended 30 June 2020 are as follows (all amounts are inclusive of GST where applicable):

Receipts

Gross Salary (John Hunter Hospital) note 1                                                           $25,240

Gross Salary (Alice Springs Hospital) note 2                                                          $76,180

Fully Franked Dividend received (ASX listed company)                                 $4,200

Net Bank Interest received from USA bank note 3                                                    900

Gross Rental Income                                                                                            $10,400

Payments

Airfares and removal costs to Alice Springs                                                      $3,400

Annual subscription Australian Nurses Association                                            $700

Purchase laptop computer note 4                                                                                          $2,200

Purchase Brief Case note 4                                                                                           270

Other expenses (all deductible s8-1)                                                                $1,230

Expenses relating to the rental property (all deductible)                              $17,100

Other information:

1. Penny does not have private hospital cover.
2. At 30 June 2020 Penny had a HELP/ (HECs) debt of $19,000 relating to her nursing degree that she completed in 2016 at the University of NSW.
3. Penny also received $7,000 as her share of her Grandmother’s deceased estate.    

Notes:

1. Penny’s payment summary from the John Hunter Hospital Newcastle also showed the following details:

PAYG Deducted                                                                        $4,400

Reportable Fringe Benefits                                                     $4,100

Reportable Employer Superannuation Contributions          $2,750

2. Penny’s payment summary from the Alice Springs Base Hospital also showed the following details:

PAYG Deducted                                                                        $29,000

Reportable Employer Superannuation Contributions          $3,250

3.     Penny received $1,000 (AUD) gross interest in respect of a deposit she holds with a US Bank. Under US tax legislation, the Bank was required to withhold $100 tax from the interest forwarding Penny the balance of $900.
4.     The laptop was purchased new on 15 March 2020. It has an effective life of 3 years and is used 90% for her employment and 10% privately.

       The briefcase was purchased new on 1 September 2019. It has an effective life of 2 years and is used 100% for her employment.

Required

Calculate Penny’s minimum taxable income and her net tax payable/refundable for the year ended 30 June 2020.

1 Lehman Brothers is a very well-known financial firm that has filed for Chapter 11 bankruptcy protection during 2008/2009 financial crisis. Then the economic situation was so bad the 135 years old firm that survived during 1930 great depression was unable to survive and ceased the operation and never return to market. In your ECON 200 class, you learnt the conditions at which the firms enter and exit from the market. Using a graph describes how and when in a perfectly competitive market the firms that are experiencing economic losses exit from the market. In the graph you may use costs and revenue curves

2 On the other hand, the General Motors went on a different direction. General Motors was founded in 1908 and one hundred years old company. Following the financial crisis in 2008/2009, General Motors filed for chapter 11 bankruptcy protection. After support from the US government and restructuring, the business operation was able to re-enter the market. In your ECON 200 class you learnt the conditions at which the firms enter and exit from the market. Using a graph describes how and when in a perfectly competitive market the firms that are experiencing economic losses close the operation and reenter to the market. In the graph you may use costs and revenue curves.

Suppose the economy has access to 1000 Mahogany trees, used for making guitars. Processing the trees for guitar production costs $1 per tree. This economy may access 1000 additional trees (perhaps existing in the outskirts of the town) but it costs $3 to use each of those trees. Assume 5 trees are needed to produce one guitar. Questons : (1) What is the Supply curve for guitar production? You may answer with a fully labeled picture. (2) If the demand function for guitars is D(p)=220-2p, what is the equilibrium price and quantity in the market for guitars? Credit is based on the logic of your explanations, so explain your reasoning! (3) Suppose the government wants to incentivize people to play more guitar, so they place a subsidy of $5 per guitar. That is, if the consumer pays p, the firm gets p+5. Will the government achieve it's goal of having more guitars bought in equilibrium? Credit is based on the logic of your explanations, so explain your reasoning!

Tom, dan, and Harry lost their personal residence due to a forest fire that swept through their town. Tom and Harry owned houses, and Dan owned a unit in a condominium complex. Tom had a standard HO policy, while Harry elected repair cost coverage under a HO-8 policy. The value of all of their homes was $300,000, and all three will incur additional living expenses while their homes are rebuilt. All three maintained dwelling coverage under their homeowners policies equal to the value of their home. Which of the following statements concerning loss of use coverage under their homeowner’s policies is correct?

You will select an item for which to shop. Please describe the product attributes desired as specifically as possible before you visit the retail store. If it is a branded product, state the brand name. The intent of this aspect of the assignment is to ensure that you start out with a clear conception of the specific product for which you are shopping. You then select and compare two retailers who offer this product.

1. From which of these two stores would you actually purchase the item? Why, specifically? List the factors that play a role in your decision. Which factor is the most important to you? If you would not purchase the item at either store, why not?

b. What are the three most important differences you observed between the stores?

c. What is the type of location (traditional business district, community shopping center, etc.)? How congested is this part of town in general? What influence does the neighborhood have on your impression of the store? Would you travel to this store under normal circumstances to shop for your product?

8. Natural monopoly analysis

The following graph shows the demand (D) for electricity services in the imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local electricity company, a natural monopolist.

On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist.

Monopoly Outcome0123456789104036322824201612840PRICE (Cents per Kilowatt-hour)QUANTITY (Thousands of kilowatt-hours)DMRMCATC

Which of the following statements are true about this natural monopoly? Check all that apply.

In order for a monopoly to exist in this case, the government must have intervened and created it.

The electricity company must own a scarce resource.

The electricity company is experiencing economies of scale.

It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers.

True or False: Without government regulation, natural monopolies can earn positive profit in the long run.

True

False

1.Name a product or service that has zero marginal cost (non-rival) and used by free-riders.

a).Name a product or service that has significant MC (rival) but excludes free-riders.

b).Name a product or service that has significant MC (rival) and used by free-riders.

c).Name a product or service that has zero MC (non-rival) but excludes free-riders.

2.The government is an appropriate provider of public goods- which is described above in question #

a)).The market place government is an appropriate of which good described above in question #

b).The Tragedy of the Commons describes when one of us grazes his cow in the public town common. Each mouthful of grass makes the common more barren, but only one of us is paid when the cow bears milk or goes to the slaughterhouse. This is described in question #

c).This leaves a club or artificially scarce good- described in question #

.3.Give a second example of a club or artificially scarce good.

Consider tossing a coin and rolling a four-sided die (with the numbers 1 through 4 printed on the sides).

(a) Describe the sample space.

(b) Whatistheprobabilityofrollingaheadsandanevennumber?

(c) What are the odds of rolling a heads and an even number?

(d) What is the probability of rolling a heads?

(e) What are the odds against rolling a heads?

Determine whether or not the following statements are correct or incorrect and explain why (Be thorough and clear in your explanation!):

(a) A person says “the odds of rolling a 1 on a standard six-sided die is 1/6.”

(b) In the past five seasons,cross town football riva ls the Quaker sand the Comet shave played

each other with the Comets winning twice and the Quakers winning three times. Someone

says “the odds in favor of the Quakers winning are 3:5.”

(c) If the odds in favor of an event occurring are A to B, then the probability of the event

occurring is A/(A+B).

(d) An event with probability 75% means that the event is three times more likely to occur than

not occur.