City residents complain about the noisy customers of the city’s bars. The Council decides to fine each bar in the area a fixed amount of $100. Assume Joe's Bar is just one of many in the area so the perfect competition model can be used.

a. Use graphs to show the effect of the fine on the price charged, the quantity of drinks served and the profits at Joe's in the short run and long run.

b. How would your answer to a be different if Joe’s Bar was the only one in the city? (i.e. Joe’s bar has a monopoly) Explain your answer.

c. Is the noise created by Joe’s customers an externality? Explain. Will the tax increase or decrease deadwight loss?

A U.S. Company expects to receive 100 million Russian Ruble 3 months from now. A call and put on Russian Ruble are available with a strike price of RR60/$ for each option, and a premium of 1.5% for the call option and a premium of 2.3% for the put option. The weighted average cost of capital (WACC) for the U.S. Company is 12% and the current spot rate is RR58.30/$.

a. If the company hedges in the option market, which option will it choose and what is the cost of option hedge today and at maturity in U.S. Dollars? Explain your answer very well

b. If the spot rate at maturity is RR63/$, how much would the company receive (net) in 3 months from the option hedge?

1. What internal control procedure(s) would provide protection against the following threats/exposures? (10 marks of a 100 marks paper)

   1. Theft of goods by the warehouse workers, who claim that the inventory shortages reflect errors in the inventory records.

   2. Writing off a customer’s accounts receivable balance as uncollectible to conceal the theft of subsequent cash payments from that customer.

   3. Theft of cheques by the mailroom clerk, who then endorsed the cheques for deposit into the clerk’s personal bank account.

   4. Theft of funds by the cashier at Cash Receipts, who cashed several cheques from customers.

   5. A sales clerk sold a $7,000 wide-screen TV to a friend and altered the price to $700.

A U.S. Company expects to receive 100 million Russian Ruble 3 months from now. A call and put on Russian Ruble are available with a strike price of RR60/$ for each option, and a premium of 1.5% for the call option and a premium of 2.3% for the put option. The weighted average cost of capital (WACC) for the U.S. Company is 12% and the current spot rate is RR58.30/$.

a. If the company hedges in the option market, which option will it choose and what is the cost of option hedge today and at maturity in U.S. Dollars? Explain your answer very well

. b. If the spot rate at maturity is RR63/$, how much would the company receive (net) in 3 months from the option hedge?

Suppose the demand curve in a city is given by P = 100 - 2Q, where P denotes price and Q the local GDP. The supply curve is given by P = 10 + Q. Now Suppose that due to an initial impulse of ΔX = 10 (Increase in exports) and further induced increases in local incomes the new induced demand curve changes to P = 150 - 2Q.

Where are the local GDP and the corresponding income multiplier if prices were constantly at P = 40?

A) q = 35, income multiplier = 3.5

B) q = 55, income multiplier = 2.5

A) q = 70, income multiplier = 2.5

A) q = 95, income multiplier = 9.5

A) None of the above

Select one:

a. 400 and 100

b. 400 and 75

c. none of the other

d. 500 and 175

e. 400 and 175

Suppose desired consumption and desired investment are Cd = 300 + 0.75(Y − T) − 300r T = 100 + 0.2Y Id = 200 − 200r G is the level of government purchases and G=600 Money demand is Md P = 0.5Y − 500(r + πe ) where the expected rate of inflation, πe , is 0.05. The nominal supply of money M = 133,200. Suppose the full employment output is 2500 and the price level in the short run is 120.

4) Find the equation for the aggregate demand curve by using the IS and LM curve. [Hint: Use the form of the LM curve for an unspecified value of P. This aggregate demand function is measured by the solution of (1) and (2).]

The mean cost of domestic airfares in the United States rose to an all-time high of $375 per ticket. Airfares were based on the total ticket value, which consisted of the price charged by the airlines plus any additional taxes and fees. Assume domestic airfares are normally distributed with a standard deviation of $100. Use Table 1 in Appendix B.

a. What is the probability that a domestic airfare is $540 or more (to 4 decimals)?

b. What is the probability that a domestic airfare is $265 or less (to 4 decimals)?

c. What if the probability that a domestic airfare is between $320 and $480 (to 4 decimals)?

d. What is the cost for the 5% highest domestic airfares? (rounded to nearest dollar)

Given the below information

Extra rubies if required can be bought at R300 per ruby.

1. How do you maximise profit using solver linear programming?

2. What will the optimal solution be?
3. Suppose that instead of R300, each ruby costs R750. Will Zales still buy extra rubies? If so, will the production plan and profit change?

Nutt’s Nut Company has 500 pounds of peanuts, 100 pounds of pecans, and 50 pounds of cashews on hand. they package three types of 5-pound cans of nuts: Can I contains 3 pounds of peanuts, 1 pound of pecans, and 1 pound of cashews; Can II contains 4 pounds of peanuts, 1/2 pound of pecans, and 1/2 pound of cashews; and Can III contains 5 pounds of peanuts. The selling price is $28 for Can I, $24 for Can II, and $21 for can III. How many cans of each kind should be made to maximize revenue? Set up an LP problem. Do not solve.