a) Suppose there are two market structures: A and B. Market A is characterized by free entry and exit
of firms and firms under this structure face a horizontal demand curve. Market B has only one seller.
Identify the market structures. Comment on the pricing mechanism, long-run profitability, and social
surplus under both market structures.

b) Explain why the marginal revenue curve lies below the monopolist's demand curve.

The following is a list of “Measures of Size” for a farm/ranch. Briefly explain to me why these are not appropriate measures of how well (or poorly) the operation is doing. You can either address each item on the list separately or as a group. Don’t just give me a definition – explain.

• Total or gross revenue
• Value of farm production
• Total farm assets
• Total acres farmed
• Livestock numbers
• Total labor used
• Quantity of sales

The following is a list of “Measures of Size” for a farm/ranch. Briefly explain to me why these are not appropriate measures of how well (or poorly) the operation is doing. You can either address each item on the list separately or as a group. Don’t just give me a definition – explain.

• Total or gross revenue
• Value of farm production
• Total farm assets
• Total acres farmed
• Livestock numbers
• Total labor used
• Quantity of sales

b) The use of debt by countries to finance national budget has engaged the attention of economists,
tax practitioners and the ordinary man in the interest regarding its impact on the economy. While
some prefer domestic debt, others are making a case for foreign debts as part of government’s fiscal
policy.
Required:
Present a report on the benefits to a government for going in for a foreign debt as opposed to going in
for domestic debt as a support to revenue base from taxes.

There are several financial ratios that are directly associated with the flow of cash in a business. From the list below, choose two ratios and discuss the following for each:

1. What role does sales (revenue) play with your ratio?
2. What role does debt play with your ratio?
3. Can this ratio be a distress indicator (Links to an external site.)Links to an external site. for a company? How?

Cash Flow Coverage Ratio

Cash Conversion Cycle

Presented below is information related to Martinez Company.

Compute the inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)

Mr. Burns wants a net income of $3 million next year for the Springfield Nuclear Plant. Their cost of goods sold run 18% of sales and they have $5 million in other operating expenses plus $2.6 million in depreciation. If they have interest expense of $1.5 million and their tax rate is 40%, what revenue level will be necessary to reach his goal? A. $50,555,556 B. $64,444,444 C. $20,243,902 D. $17,195,122

Vanessa is an oligopolist who believes that if she decreases her price, her competitors will not follow and decrease their prices. Draw a graph showing Vanessa's firm in short-run equilibrium, using demand, marginal cost, marginal revenue, and average-total-cost curves. Indicate the price and quantity Vanessa will produce in short-run equilibrium, and show a price decrease that results in Vanessa's firm still earning positive economic profits

• Compare the American Institute of CPAs (AICPA) Statements on Tax Standards (SSTS) and the Treasury Department Circular 230 rules to practice before the Internal Revenue Service (IRS).
• Suggest which document creates better guidance in the preparation of tax returns and written advice provided to taxpayers.
• Suggest measures the AICPA could take to ensure that CPAs are compliant with either set of standards. Defend your position by citing current cases.

1.)

a. Graph and explain how a monopoly determines the quantity to produce and the price to charge that maximizes their profit.

b. Why will a profit maximizing monopoly not charge a price in the lower region of the demand curve?

c. What should a monopoly do to its price if it is currently operating at an output level where marginal revenue is $40 and marginal cost is $43? Explain your reasoning.

d. Graph and explain the deadweight loss due to monopoly.