Jake's Sporting Goods sells sporting goods and apparel in Omaha, NE. On October 17, Jake’s purchased $50,000 of sporting goods from Cincinnati Wholesale Distributors with terms FOB shipping point and 1/10, n/EOM. On October 18, Jake’s purchased $45,000 of sporting goods from the Chicago Sports Wholesalers with terms FOB destination and 3/15, n/30. Both suppliers hired KC Trucking Company to deliver the goods.

The trucks carrying these goods collided on the bridge over the Missouri River between Omaha and Council Bluffs. Both drivers were "fished" out of the river and were not hurt. However, all of the merchandise was destroyed. Both suppliers have sent Jake's Sporting Goods invoices and are expecting payment. The date is October 25.

Advise Jake on what he should do and how much he should pay. Show your calculations and include a description of the advantages of using various shipping terms.

Exercise 3-6 (Static) Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]

The following data from the just completed year are taken from the accounting records of Mason Company:

Required:

1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

3. Prepare an income statement.

Anna spends her income on green goods (G) and brown goods (B). Initially, Anna's income is $30, the price of green goods is $2, and the price of brown goods is $1. The government introduces a new regulation that increases the price of brown goods to $5.  

Her utility function is as before: U(G,B) = G^2B

Her marginal utility for green goods is: MUg = 2GB

Her marginal utility for brown goods is: MUg = G^2

a) Given the initial prices, Anna's optimal consumption consists of ___?__ units of green goods and _?__ units of brown goods. The level of utility that Anna obtains from consuming this basket is __?__ .

b) After the new policy is implemented, Anna's optimal consumption consists of __?__ units of green goods and __?__ units of brown goods. The level of utility that Anna derives from consuming this basket is  __?__.

c)Write down the equations that you need to decompose the total effect of the price change into income and substitution effects. [Hint: there should be three equations, one for the utility level, a tangency condition, and a budget condition]

d)Rounded to the closest integer, the decomposition basket consists of  __?__ units of green goods and  units of brown goods.

e) Fill in the blanks. Rounded to the closest integer, the magnitude of the substitution effect of the policy over Anna's consumption of brown goods consists of __?__ units, while the magnitude of the income effect consists of __?__ units.

Anna spends her income on green goods (G) and brown goods (B). Initially, Anna's income is $30, the price of green goods is $2, and the price of brown goods is $1. The government introduces a new regulation that increases the price of brown goods to $5.  

Her utility function is as before: U(G,B) = G^2B

Her marginal utility for green goods is: MUg = 2GB

Her marginal utility for brown goods is: MUg = G^2

1) For this specific setting, the change in Anna's consumer surplus from the policy is equal to:

A. The compensating variation

B. The equivalent variation

C. Both the compensating and the equivalent variations

D. Neither the compensating nor the equivalent variation

E. There is not enough information to answer

2) Write down the equations that you need to find Anna's equivalent variation

1.   Both public goods and common property resources involve externalities.

a)   Are the externalities associated with public goods generally positive or negative? Use examples in your answer. Is the free-market quantity of public goods generally greater or less than the efficient quantity?

b)  Are the externalities associated with common resources generally positive or negative? Use examples in your answer. Is the free-market use of common resources generally greater or less than the efficient use?

Factors that may influence a firm's decision to buy goods rather than produce goods internally include a lack of in-house expertise, small volume requirements, a desire for multiple sourcing, and the fact that the item may not be critical to the firm's strategy. Additional consideration may be given if the firm has the opportunity to work with a company that has provided outsourced services successfully in the past and can sustain a long-term relationship (Kenton, 2019).

Additionally, most businesses make decisions not only about how many workers to employ at any given point in time (e.g., the amount of labor) but also about the scale of an operation (e.g., size of factory, office) to put together and which production processes to use. Therefore, the long run is defined as the time horizon necessary to not only change the number of workers but also to scale the size of the factory up or down and alter production processes as desired.

If you were a manager at Ford, what information would you need to make decisions about the production of a vehicle like the Ford Fusion? In your answer, please include information about number of employees, factory size, office space, production processes, and scale of operation.

Two large countries, the US and China, produce only two goods, manufactured goods and Financial services, using two factors of production, skilled and unskilled labour. The production of Financial services is relatively skill-labour intensive and manufacturing is unskilledlabour intensive. The US is relatively well endowed with skilled labour, whereas China is relatively well endowed with unskilled labour. Assume that each society's preferences over the two goods are identical.

(a) Draw the production possibilities frontier (PPF) for the US. Carefully explain the shape of the PPF. How will the PPF of China differ?

(b) Suppose there is no trade between the two countries. Explain why, in a competitive equilibrium, the relative price of Financial services must be lower in the US than in China.

(c) Explain why the neoclassical (Hecksher-Ohlin) theory of trade implies there must be an increase in the goods available for consumption in both countries as a result of opening to free trade. Does this imply that all households in each economy will gain from trade? Explain.

(d) Provide a coherent economic argument to justify a protectionist policy in China that imposes a tariff on Financial services from the US. What problems may arise in following such a strategy in the long run?

1.Merchandising businesses generate revenue by selling goods. include wholesale and retail companies. manufacture the goods that they sell. generate revenue by selling goods and include wholesale and retail companies.

2. A retail company sells goods primarily to other businesses. manufacturing firms. the final consumer. other businesses and the final consumer.

3.Merchandising businesses manufacture the goods they sell. generate revenue primarily by providing services to customers. buy the merchandise they sell from suppliers. include dry cleaning companies and law firms.

4.A discount given to encourage prompt payment on a credit purchase of merchandise is called: a cash discount. a sales discount by the seller. a purchase discount by the buyer. all of these are correct.

5. On January 1, 2014 Morgan Co. purchased a truck that cost $32,000. The truck had an expected useful life of 10 years and a $5,000 salvage value. The amount of depreciation expense recognized in 2015 assuming that Morgan uses the double declining-balance method is: $4,320. $5,120. $5,400. $6,400.

Two large countries, the US and China, produce only two goods, manufactured goods and financial services, using two factors of production, skilled and unskilled labour. The production of financial services is relatively skill-labour intensive and manufacturing is unskilled-labour intensive. The US is relatively well endowed with skilled labour, whereas China is relatively
well endowed with unskilled labour. Assume that each society‘s preferences over the two goods are identical.
(a) Draw the production possibilities frontier (PPF) for the US. Carefully explain the shape of the PPF. How will the PPF of China differ?
(b) Suppose there is no trade between the two countries. Explain why, in a competitive equilibrium, the relative price of financial services must be lower in the US than in China.
(c) Explain why the neoclassical (HecksherOhlin) theory of trade implies there must be an increase in the goods available for consumption in both countries as a result of opening to free trade. Does this imply that all households in each economy will gain from trade? Explain.
(d) Provide a coherent economic argument to justify a protectionist policy in China that imposes a tariff on financial services from the US. What problems may arise in following such a strategy in the long run?