Please answer these questions in full with details!

1. Define positive and negative externalities; describe examples of each. What types of government policies may be appropriately applied in cases of externalities? Explain a “corrective tax”.

2.. Define and explain the relationship between Total Revenue, Total Cost, Profit, Marginal Product, Marginal Cost, and Marginal Revenue. What is the difference between “economic profit” and “accounting profit”? What is the relevance of “opportunity costs”?

A national chain of clothing goods stores recently sent shipments to the following stores. The number of items shipped to each store and their total wholesale cost is shown in the table below. Find the wholesale price of one of each item.

JEANS JACKETS SWEATERS SHIRTS TOTAL COST

4000 4000 2300 4100 592,525

3700 3500 2200 4300 547,825

5000 2000 1500 6500 499,625

6000 1700 700 7000 485,550

1. The restaurant hamburger market in a small town has two firms. The product is undifferentiated (in other words, homogeneous) and the demand curve is Q = 200 – 2P. Firm 1 has constant average total cost of $4 per unit, and firm 2 has constant average total cost of $7. If the two firms simultaneously choose prices, what is the Bertrand equilibrium? How much will each firm sell, and what will each firm’s profit be?

4) Assume, A and B are the only firms which are operating in an oligopolistic market. The
equation of the market demand curve is, Q=600-2P, the total cost function of the firm A
is, TCA=0.5and the total cost function of the firm B is, TCB=120qB.
a) Find the market price and quantities if both firms behave as Cournot duopolists.
b) Find the market price and quantities if the firm A behaves as the Stackelberg leader
and firm B behaves as the Stackelberg follower.

1. A low value of opportunity cost of a resource reflects its scarcity.

1. True
2. False

2. Which of the following is an example of a macroeconomic question?

1. How will a consumer react if their income decreases?
2. What would be the likely impact of an increase in business taxes on the overall level of inflation in the country?
3. How many smartphones should Samsung produce this quarter?
4. Who are the winners and losers from the imposition of a tax on cigarettes?
5. What is the optimal number of workers for an ice cream shop to employ during the summer months?

3. Which of the following best describes the idea of the fundamental economic problem?

1. Lack of demand for limited resources
2. Unlimited resources and unlimited wants
3. Infinite resources and limited wants
4. Limited resources and unlimited wants
5. Limited wants and limited resources

4. Two countries with identical resources can each make the same two goods: cars and computers. Which of the following best describes the idea of absolute advantage for these two countries?

1. One country has higher opportunity costs of one good, and the other country has higher opportunity costs of the other good.
2. One country is able to produce more of a good or service than another country given the same resources.
3. Both countries have identical opportunity costs.
4. One country has a lower opportunity cost of one good, and another country has a lower opportunity cost of a different good.
5. One country is able to produce less of a good or service than another country.

5. Assume that the typical household in Country X will spend 80% of any additional increase in income. How much will real GDP change as a result of a $4 billion increase in investment in this country?

1. Real GDP decreases by $4 billion
2. Real GDP increases by $20 billion
3. Real GDP increases by $4 billion
4. Real GDP increases by $5 billion
5. Real GDP decreases by $16 billion

6. Which of the following best describes why we cannot always compare living standards between countries using real GDP per capita?

1. It might not represent living conditions of the typical household
2. It doesn't consider that there might be population differences between countries
3. It might overstate living standards if there are a lot of non-market transactions
4. It doesn't include government spending on social programs
5. It includes externalities like pollution

7. According to the circular flow model, how is the GDP of a nation determined?

1. By adding the total income of households to the total expenditures by households and the total revenues of firms
2. By adding the total income of households to the total revenues of firms
3. By adding the total expenditures of households to the total income of households
4. By determining either total household income, total household expenditures, or the total revenues of all the firms in the nation
5. By adding the total revenues of firms to the total expenditures of households

8. Which of the following best describes a market in equilibrium?

1. At the current price, quantity supplied is less than quantity demanded.
2. At the current quantity, the price sellers charge is more than what buyers are willing to pay.
3. At the current price, quantity supplied is greater than quantity demanded.
4. At the current price, quantity supplied equals quantity demanded.
5. At the current quantity, buyers are willing to pay more than sellers receive.

9. Which of the following best describes what happens in the long run when a firm anticipates that the price of their good will always be less than average total cost (ATC)?

1. The firm will shut down.
2. The firm will produce as long as price is greater than average variable cost.
3. The firm will exit the industry.
4. The firm will enter the industry.
5. The firm will produce as long as price is less than average variable cost.

10. The Alibaba Company produces widgets. Its average variable cost at its current output level is $35 per unit. Its current average total cost per unit is $60. If the market price is $30:

1. it should focus to minimize marginal cost
2. it should stay in business in the short-run
3. it should shut-down immediately
4. none is correct
5. it should stay in business in the long-run

Chhom, Inc., manufactures and sells two products: Product F9 and Product U4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

The direct labor rate is $29.70 per DLH. The direct materials cost per unit is $263 for Product F9 and $266 for Product U4.

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

The overhead applied to each unit of Product U4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

rev: 03_25_2018_QC_CS-119201

Chhom, Inc., manufactures and sells two products: Product F9 and Product U4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

The direct labor rate is $29.70 per DLH. The direct materials cost per unit is $263 for Product F9 and $266 for Product U4.

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

The overhead applied to each unit of Product U4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Direct Labor Variances

Ada Clothes Company produced 14,000 units during April. The Cutting Department used 2,700 direct labor hours at an actual rate of $12.60 per hour. The Sewing Department used 4,500 direct labor hours at an actual rate of $12.30 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $12.50. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively.

a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

b. The two departments have opposite results. The Cutting Department has a(n)   rate variance and a(n)   time variance, resulting in a total   cost variance. In contrast, the Sewing Department has a(n)   rate variance but has a(n)   time variance, resulting in a total   cost variance.

Logan Company can sell all of the standard and premier products they can produce, but it has limited production capacity. It can produce 8 standard units per hour or 5 premier units per hour, and it has 39,000 production hours available. Contribution margin per unit is $20 for the standard product and $26 for the premier product. What is the most profitable sales mix for Logan Company?

Multiple Choice

• 0 standard units and 195,000 premier units.

• 126,750 standard units and 24,375 premier units.

• 312,000 standard units and 0 premier units.

• 39,000 standard units and 79,219 premier units.

• 79,219 standard units and 145,488 premier units.
  

  Pinkin Inc. needs to determine a price for a new phone model. Pinkin desires a 20% markup on the total cost of the phone. Pinkin expects to sell 44,000 phones. Additional information is as follows:

  Variable product cost per unit	$	77
  Variable administrative cost per unit		65
  Total fixed overhead		96,000
  Total fixed administrative		80,000

  
  
  Using the total cost method what price should Pinkin charge?

  Multiple Choice

• $167.07

• $175.20

• $146.07

• $162.30

• $174.00

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

The following information is available for Shanika Company for 20Y6:

2. Prepare the income statement.