1. The demand curve for the product of a firm in a competitive market is ________, and the demand curve for the product of a monopolist is ________.

2. When firms enter a market, the ________-run market supply curve shifts ________, causing individual firms’ profits to ________.

3. When firms enter a market, the ________-run market supply curve shifts ________, causing individual firms’ profits to ________.

4. Holding all else constant, a decrease in the market demand for a product in a competitive market would cause

5. If a competitive firm can make enough revenue to cover its variable costs, the firm will

Explain the firm’s behavior in general based on a rigorous model which we have constructed so far through this course (2 pages: 25 points) "the firm" in economics is referring to the theory of the firm this question asks to explain the behavior of the firm to include the following concepts:

Production Function, Isocost lines, Isoquants, adjustment of capital, Long run, Short run, total product of labor, average product of labor, marginal product of labor, marginal product of capital, ,marginal rate of technical substitution, upper ridge line, lower ridge line, cost minimizing point (input combination), long-run expansion path, short-run expansion path, total cost curve, total variable cost curve, fixed cost, short run average cost curve, average variable cost curve, short run marginal cost curve, long run total cost curve, long run marginal cost curve, long run average cost curve, market price of commodity, total revenue, total profit, marginal profit, profit maximizing price and quantity, demand curve of perfect competitive firm in the short run/long run, abnormal profit, entry of other competitors for abnormal profit, demand curve and marginal revenue curve to monopolist, monopoly price and output

Question 4

Ghana Post Company Ltd has two divisions, EMS and the Postal division. Ghana Post Company Ltd intends to increase its investment in EMS and Postal division by GHS10,000 each. The increase in investment is expected to increase net income by GHS18,000 and GHS20,000 in EMS and Postal respectively. Currently, the assets structure of both EMS and Postal is analysed below:

                                              EMS                         Postal

                                             GHS                          GHS

                                    Investment

Motor vehicles                            70,000                     180,000

Buildings                                         30,000                     120,000

Scales/Equipment                         20,000                     100,000

                                                         120,000                     400,000

                                    Current Asset

                                     Stamps                            25,000                          50,000

                                     Stationary                       45,000                         80,000

                                      Debtors                           80,000                          70,000

                                      Bank                                                                     130,000

       60,000                         330,000

                                     Current liabilities         210,000

Creditors                         10,000    200,000     20,000        310,000

                                                            320,000                          710,000

Current Revenue for both EMS and Postal are GHS364,000 and GHS692,000 respectively. Total expenses as a percentage of revenue are 80.2% and 88.2% for EMS and Postal respectively. Assume cost of Ghana Post is 15% and the company evaluates its managers based on return on investment (ROI) and Residual Income (RI).

Required:

1. Calculate ROI before and after the expansion.
2. Using the cost of capital, determine the residual income before and after the expansion.
3. Should management of Ghana Post invest in the expansion? Give reasons

1. Describe the main characteristics and objective of profit and investment centres.
2. Explain conditions necessary for the successful introduction of both profit and investment centres.

1.

Bond Investment Transactions

Journalize the entries to record the following selected bond investment transactions for Starks Products:

For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Purchased for cash $90,000 of Iceline, Inc. 8% bonds at 100 plus accrued interest of $1,200, paying interest semiannually.

b. Received first semiannual interest payment.

c. Sold $60,000 of the bonds at 103 plus accrued interest of $680.

2.

Stock Investment Transactions

On September 12, 2,700 shares of Aspen Company are acquired at a price of $32.00 per share plus a $135 brokerage commission. On October 15, a $0.80-per-share dividend was received on the Aspen Company stock. On November 10, 1,080.00 shares of the Aspen Company stock were sold for $27 per share less a $54 brokerage commission.

When required, round final answers to the nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank.

Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method.

A persistent problem facing our society is the use of illegal drugs, such as heroin. Drug use has several adverse effects. One is that drug dependence can ruin lives of drug users and their families. Another is that drug addicts often turn to robbery and other violent crimes to obtain the money needed to support their habit. To discourage the use of illegal drugs, the U.S. government devotes billions of dollars each year to reducing the flow of drugs into the country. Let's use the tools of supply and demand to examine this policy of drug interdiction.  

Suppose the government increases the number of federal agents devoted to the war on drugs.

a. Is the demand curve for illegal drugs elastic or inelastic?

b. Will the supply curve for illegal drugs shift to the right or the left?

c. Will the new equilibrium price increase or decrease after the shift?

d. Will the total revenue for drug dealers increase or decrease because of this?

e. Will the change in the price of illegal drugs cause more or less illegal activity?

Suppose the government instead pursues a policy of drug education in schools.

a. Is the demand curve for illegal drugs elastic or inelastic?

b. Will the demand curve shift right or left after the drug education takes effect?

c. What will happen to the equilibrium price after this shift?

d. Will this increase or decrease total revenue for drug dealers?

e. Will this increase or decrease related criminal activities of drug users?  

The December 31, 2019, adjusted trial balance of Business Solutions (reflecting its transactions from October through December of 2019) follows.
  

Required:
1. Record the closing entries as of December 31, 2019.
2. Prepare a post-closing trial balance as of December 31, 2019.

To study how social media may influence the products consumers​ buy, researchers collected the opening weekend box office revenue​ (in millions of​ dollars) for 23 recent movies and the social media message rate​ (average number of messages referring to the movie per​ hour). The data are available below. Conduct a complete simple linear regression analysis of the relationship between revenue​ (y) and message rate​ (x).

Click the icon to view the data.

Message_Rate   Revenue_($millions)
1369.4 145
1217.5 76
575.9 70
308.1 36
453.2 35
292.7 34
245.8 21
675.6 19
150.8 19
162.2 19
111.1 18
146.2 17
417.2 16
95.5 16
103.6 15
119.8 15
73.8 15
84.8 14
122.3 9
58.9 8
146.4 7
37.5 2
3.9 1

a.The least squares regression equation is y equals=nothing+ (nothing) x

​(Round to three decimal places as​ needed.)

b. Determine the estimate of the standard deviation.

s=nothing

​(Round to two decimal places as​ needed.)

c. Identify the test statistic for the​ hypotheses, rounding to two decimal places.

t= nothing

d.Identify the p-value.

e.Compute fro r2

f.Use technology to create a​ 95% confidence interval for the slope β1​, rounding to three decimal places

The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk-screened design and embellishments. A summary of the expected costs and revenues for Mohave’s two options follows:      

Required:
1. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.

  

2. Should Mohave add decorations to the Rosa umbrella?

3-a. Suppose that the higher price of the decorated umbrella is expected to reduce estimated demand for this product to 18,000 units. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.

3-b. Should Mohave add decorations to the Rosa umbrella?

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 64 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $4,000 per month plus $44 per course plus $5 per student. The company’s sales should average $870 per student.

The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 60 students. The actual operating results for September appear below:

Required:

1. Prepare the company’s planning budget for September.

2. Prepare the company’s flexible budget for September.

3. Calculate the revenue and spending variances for September.

1) The Enterprise purchased an equipment on January 1^st, 2011 that had an estimated useful life of 10 years.The equipment cost $50,000 and estimated residual value was $5,000 at the time of purchase. After three full years of use, the equipment was sold for cash and recognized a $3,000 gain on the sale of that equipment. How much cash did the enterprise receive for the equipment?

2) Aqua Company started the year with the following:

Assets $100,000; Liabilities $60,000; Common Stock $30,000; and a Retained Earnings balance. During the year,

a) The company earned revenue of $200,000. $190,000 of that revenue was collected in cash, the remainder was still outstanding at the end of the year

b) The company started the year with $20,000 in Accounts Receivable, all the amount was collected during the year

c) Aqua Company incurred expenses of $180,000 and 10% of those expenses were unpaid as of the end of the year

d) Aqua company declared and paid dividends of $5,000 during the year

Make the equations in these orders (Table

Item : Assets = Liabilities + Common Stock + Retained Earnings

Beginning Balance Assets = Liabilities + Common Stock + Retained Earnings

A) Assets = Liabilities + Common Stock + Retained Earnings

B) Assets = Liabilities + Common Stock + Retained Earnings

C) Assets = Liabilities + Common Stock + Retained Earnings

D) Assets = Liabilities + Common Stock + Retained Earnings

Ending Balance for Assets = Liabilities + Common Stock + Retained Earnings