Mr. Marcotte was at Joel’s Little League game last week where he ran into one of the other parents, who seemed to
be in a very upbeat mood. Mr. Richards could not seem to stop talking about his windfall in the past week on some
stocks he had bought in the last month or so. Since Mr. Marcotte is still new to the investing game, he seemed to be
somewhat overwhelmed with some of the terms like stock splits, P/E ratios, dividend payout that Mr. Richards was
using to explain his success story. Moreover, Martin Marcotte has always assumed that one needs to have a sizable
amount to invest in the stock market, not to mention the inherent risk involved in the equities market. It has not
helped that by nature Mr. Marcotte is a risk averse person, he seems to think that if he was to dabble in the stock
market, he will have the same fate as those who invested in Enron, World Com, or some of the other companies
involved in fraudulent practices.
Having the above concerns aside, Martin knows that he will not be able to achieve his financial goals by keeping his
savings in a savings account or having certificates of deposits. Therefore he has decided to research stocks further,
and together with Mrs. Marcotte start a small investment in some well-researched company. Before he does so,
however he still has several questions that he needs answered.

Part 1: The Marcottes are not sure what are the different ways one make money by investing in the stock of a company?
Please list and explain the three ways you can make money with stocks.

Part 2: Given that there are many classifications of stocks to choose from, which ones should the Marcottes invest in
initially? (Remember, their initial goal is to have sufficient funds for their kids’ college education) It may maybe
more than just one class of stock. Explain and support your recommendations for the Marcottes.

Part 3: The Marcottes are not sure if they should use a Full-Service of Discount Brokerage firm, since they feel they
will not be able to spend enough time researching individual stocks. What recommendation would you give them?
Please support your recommendation.

Part 4: What are the long term techniques that the Marcottes can follow when investing in the stock market? List and
explain two methods. Which one do you recommend for this family?

Part 5: What are the short term techniques that the Marcottes can follow when investing in the stock
market? List and explain two of the methods and explain why you would not recommend them to Marcottes.

Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phones. Your initial client base is the student body at your university. Once you have established your company and set up procedures for operating it, you plan to expand to other colleges in the area and eventually to go nationwide. At some point, hopefully sooner rather than later, you plan to go public with an IPO and then to buy a yacht and take off for the South Pacific to indulge in your passion for underwater photography. With these plans in mind, you need to answer for yourself, and potential investors, the following questions:

1. What is an agency relationship? When you first begin operations, assuming you are the only employee and only your money is invested in the business, would any agency conflicts exist? Explain your answer.

2. Suppose your company raises funds from outside lenders. What type of agency costs might occur? How might lenders mitigate the agency costs?

3. What is corporate governance? List five corporate governance provisions that are internal to a firm and are under its control.

4. Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation?

5. Briefly explain how regulatory agencies and legal systems affect corporate governance.

New combinations of genetic material give rise to genetic variability in sexually reproducing organisms through

1. crossover events between nonsister homologous chromatids.
2. crossover events between sister chromatids.
3. egg and sperm genetic recombination from distinct individuals.
4. egg and sperm genetic recombination from one individual in which crossing over and independent assortment of homologues has occurred.
5. A, C, and D all contribute to genetic variability.

In this chapter we really got into comparative advantage and gains from trade. We highlighted the benefit of trade, and showed that it works BOTH on the micro (individual) and macro (economy) level. Often the discussion of free trade is contrasted by comparing to its logical opposite, "protectionism". "Protectionism" is an idea that certain domestic industries should be protected (from new products or foreign producers) in order to ensure that their employees aren't negatively impacted. Those who favor protectionism have very good intent, but it is almost universally viewed as bad for economic welfare by professional economists.

There are multiple factors at work here. First, there's a concept called "Creative Destruction". Creative Destruction is the concept that new technology disrupts the existing model so much that old industries will be replaced with new industries. (Think the automobile industry destroying the horse and horse related business, the computer destroying the typewriter, the digital camera destroying film, Streaming video replacing VHS, etc). The creation of the new improved product DOES displace those who are in the old industry. It IS harmful to those impacted. However, there is clearly a benefit from the newer, improved product to society as a whole. With each evolution, societal welfare has improved, but it costs some their jobs (until they can be retrained and utilized elsewhere). Both trade and creative destruction causes a reorganization of resources and people. It's destructive, but powerful.

Question #1)

If you were an economic advisor, briefly (one paragraph) explain which of the following would be your primary economic goal: Protecting existing jobs and industries or improving societal welfare? How could you economically explain your position?  

Watch this 3-minute Video on Creative Destruction.

Identify a market that has been fundamentally changed due to creative destruction (not one mentioned in the video). Explain how the negative impacts are often more visible than the positive impacts.  

USE THREE DECIMALS FOR ALL OF THE ANSWERS.

Health experts’ estimate for the sensitivity of coronavirus tests, as they are actually used, is 0.7. They also think the specificity is very high. Suppose specificity is 0.99 and that the health experts’ estimated sensitivity is correct (0.7).

a. In a population where 20% of the population is infected with the coronavirus, what is the probability that a person who tests positive actually is infected?  

b. Continued. What is the probability that a person who tests negative actually is not infected?

In the US, testing initially was very selective. In other words, as of early April 2020, only patients (i) with symptoms (ii) who contacted the health care system were being tested. For the most part, tests were not obtainable on demand, and there was very limited testing of asymptomatic people, even if they had been in contact with someone who had tested positive.

When testing is selective, then for interpreting results of testing, what matters is not the fraction of the entire population who are infected, but rather the fraction of the tested population who are infected.

c. If the prevalence of infection in the tested population is 0.8 (in other words, if 80% of people tested have the infection), what is the probability that a person who tests positive actually is infected?

d. Continued. What is the probability that a person who tests negative actually is not infected?

What can you learn from comparing your answers to parts a and b with your answers to parts c and d? The article also makes this point:

“Dr. Smalley said a negative result is more likely to be accurate in places like Louisville where the prevalence is low, but could be virtually useless in New York, where it is high.”

In other words, Louisville’s situation is similar to parts a and b, and New York’s situation is similar to parts c and d (qualitatively).

Now let’s see what is implied by the study of Wuhan patients that the WSJ article describes. Here’s another quote:

“A February study of about 1,000 patients in Wuhan, China, who were hospitalized with suspected coronavirus there, where the pandemic began, found that about 60% tested positive using lab tests similar to those available in the U.S. But, almost 90% showed tell-tale signs of the virus in CT scans of their chests, the article, published in the journal Radiology, found, suggesting many patients in the group were testing negative despite active coronavirus infections.”

Here, the population is “patients hospitalized for something that seems like coronavirus”. In that population, 90% of people were infected (if we take the CT scans as definitive). But 60% of this population tested positive. Note that 60% is not the sensitivity of the test, because this includes people who were not infected and who tested positive.

e. Let’s “back out” the sensitivity of the test, instead of assuming a value for sensitivity. Using 0.9 as the prevalence of infection with Covid-19 in the tested population; using 0.99 as the specificity of the test (same as in the previous parts of this problem); and using 0.6 as the fraction of the population who tested positive, calculate the implied sensitivity of the test. HINT: Use the law of total probability.    

f. Continued. In this situation (in the situation of the Wuhan study), what is the probability that a patient who tested negative actually was not infected?

g. Suppose the goal was for the probability to be at least 0.75 that a patient who tested negative actually was not infected, in the conditions of the Wuhan study. What is the minimum value of sensitivity that would allow this goal to be achieved?

ocument for Analysis: Poor Persuasive Request Going to Texas 7-Eleven Owners (Objs. 1, 2 and 3)

Your Task. Analyze the following poorly written persuasive e-mail request.

Make a list its weaknesses. Rewrite the email making the needed changes.

Hey, have you heard about this new thing coming at us? As a 7-Eleven franchise owner and member of the 7-Eleven Franchise Owners Association of Texas, I am seriously put off about this move to wrap our bananas in plastic. Sure, it would extend their shelf life to five days. And I know that our customers want yellow-not brown—bananas. But wrapping them in plastic?? I mentioned this at home, and my teenage daughter immediately turned up her nose and said, “A banana wrapped in plastic? Eeeyooo! Do we really need more plastic clogging up the environment?” She’s been studying sustainability and said that more plastic packaging is not a sustainable solution to our problem.

I realize that we 7-Eleven franchisees are increasingly dependent on fresh food sales as cigarette sales tank. But plastic-wrapped bananas is going too far, even if the wrapping slows ripening. As members of the 7-Eleven Franchise Owners Association, we have to do something. I think we could insist that our supplier Fresh Del Monte come up with a wrapper that’s biodegradable. On the other hand, extending the shelf life of bananas cuts the carbon footprint by cutting down all those deliveries to our stores.

We have a meeting of franchisees coming up on February 1. Let’s resist this banana thing!

Terry

10.14

Persuasive Claim: Hawaiian Toner Scam (Obj. 3)

Heather W. was new to her job as administrative assistant at the Waialae Country Club in Honolulu. Alone in the office one morning, she answered a phone call from Rick, who said he was the country club’s copier contractor. “Hey, look, Babydoll,” Rick purred, “the price on the toner you use is about to go way up. I can offer you a great price on this toner if you order right now.” Heather knew that the copy machine regularly needed toner, and she thought she should probably go ahead and place the order to save the country club some money. Then days later two bottles of toner arrived, and Heather was pleased at the perfect timing. The copy machine needed it right away. Three weeks later Maureen, the bookkeeper, called to report a bill from Copy Machine Specialists for $960.43 for two bottles of toner. “What’s going on here?” said Maureen. “We don’t purchase supplies from this company, and this price is totally off the charts!”

Heather spoke to the manager, Steven Tanaka, who immediately knew what had happened. He blamed himself for not training Heather. “Never, never order anything from a telephone solicitor, no matter how fast-talking or smooth he sounds,” warned Steven. He outlined an office policy for future supplies purchases. Only certain people can authorize or finalize a purchase, and purchases require a confirmed price including shipping costs settled in advance. But what to do about this $960.43 bill? The country club had already begun to use the toner, although the current copies were looking faint and streaked.

Your Task . As Steven Tanaka, decide how to respond to this obvious scam.

Should you pay the bill?

Should you return the unused bottle?

Please answer the following. Its just true or false so grant me this please.

The cost loaded schedule acts as a basis for the earned value analysis (EVA) - (T/F)?

The cost loaded schedule should include the summary from each draw, which is the total from column E and column F from each month's projected draw.   - (T/F)

Retainage should be deducted from the amount shown on the cost loaded schedule.   - (T/F)

To determine the cumulative percent complete for each month, add the percent complete this period to the cumulative percent completed in the previous month. - (T/F)

Kunra is located in Boston and produces cars. In the course of car production, Kunra releases pollution as a negative externality into the atmosphere of Boston. Some of the pollution-related problems include skin cancer, contamination of drinking water, breathing epidemics, birth defects, and offensive odor. Sadly, Kunra does not do anything to bear the costs associated with the health and ecological problems Boston residents suffer. Interestingly, Kunra believes that Boston residents do not know about the problems and then leaves Boston residents to pay for the health and ecological problems they suffer from the pollution generated in the production of cars. What a rip-off against Boston residents!!! Kunra smiles home with huge profits. Kunra’s customers outside Boston feel satisfied with Kunra’s cars and organize events to praise the incredible quality of Kunra’s cars. Alas, Boston residents apparently turn out to be victims in the process of production and consumption of Kunra’s cars.

Suppose that you are a public administrator in Boston’s City Government, have trained in Economics for Public Administrators from Clark Atlanta University, and are working with the following marginal benefits and costs for Kunra’s car production, where Q is thousands of cars and P is price per car:

MPB (Marginal Private Benefit) = 120- 0.6Q (benefits to individual consumers of Kunra’s cars).

MPC (Marginal Private Cost) = 20 + 0.4Q (costs of producing cars by Kunra).

MEB (Marginal External Benefit) = 0 (an external benefit is a positive externality: car production benefits to Boston may include a healthy environment and healthy residents in Boston. In the current context, external benefits are zero).

MEC (Marginal External Cost) = 0.25Q (an external cost is a negative externality: health and ecological problems associated with the pollution generated by Kunra that affect Boston’s residents and environment).

Find the competitive equilibrium, Qc and Pc; the efficient equilibrium, Qe and Pe; and show the competitive equilibrium and the efficient equilibrium in the same graph that is properly labeled.

An Individual within late adulthood can have the chance to review and think about their experiences?

Why do you think this is important?

What is the effect upon the individual?

1. Compare and contrast (old tax law vs. new tax law) the individual mandate penalty. In other words, what was it in 2017? What is it for 2019? 2. What was the standard deduction in 2017? What is it for 2019? 3. What individual deductions are no longer allowed for 2019? What individual deductions are allowed in 2019? 4. What personal exemptions are allowed in 2019 as compared to 2017?