Let's imagine the market for imported steel. Let's say in autarky our country has an equilibrium price of 250 dollars per ton(Pa = 250), and the equilibrium quantity of 500 per ton(Qa = 500)

Let's also say that the world price is currently 200 dollars per ton(Pw = 200). At this price quantity supplied would be 400 (Qs=400) and the quantity demand would be 600(Qd = 600)

a)First lets assume that home is a large country. I want you to graph both the home market for steel and the world market for steel, make sure to graph all points and label all axes. Note that the intercept for supply in home is 0 dollar (S0 = 0) and the intercept for demand curve in home is 1000 dollars(D0 = 1000)

b)Now, let's suppose home imposes some tariff(t). At this price quantity supplied at home would be 450(Qs=450) and quantity demanded at home would be 550 (Qd = 550). I need you to illustrate this tarriff's on home and the world graphs, label all points.

c)Next, I'll need you to tell me the change in home welfare due to this tariff. You will need label all the areas that have changed because of the tariff as well as telling me the change in welfare by telling me what areas have changed from each group. NOTE: I'm not expecting an explicit numerical value.

d)Finally give your answer to (b) and (c), would there a difference in effect of being a large country with tariff versus a small country with tariff? Specifically is there a difference between price consumers pay and the price international producers receive between each model? Are welfare losses(or gains) the same between each country? Is there any other special effect of being a large country and imposing a tariff?

1) Apple was effectively a monopolist in the tablet computer market in the spring of 2010. You could go for the iPad or, well, the iPad. It didn’t even come in a choice of colors. Suppose the marginal cost of producing iPads is constant at $200, and the inverse demand curve for iPads is P = 1,000 – 5Q (where Q in millions and P in dollars). The associated marginal revenue is MR = 1,000 – 10Q.

1. How much should Apple charge, and how many will it sell at that price?
2. Compute the consumer surplus and Apple’s producer surplus. (It is helpful if you draw the demand and MC curves first. Recall that CS is the area under demand curve and above the price. PS is the area below the price and above the MC).
3. Now let’s think about how market would look like if Apple behaved like a competitive firm and priced at marginal cost. How many iPads will Apple? Compute the new consumer surplus and Apple’s producer surplus.
4. Compute the value of the “deadweight loss” from monopolization? (Note: One method, use the producer and consumer surpluses you found in parts (b) and (c). Another method, compute the DWL directly by finding the area of the triangle).
5. Draw your results you found in parts (a) – (d) in one P-Q space.
6. Suppose a government regulatory agency sets a price ceiling of $400 per iPad. How many iPads will Apple sell, and what will be its producer surplus?
7. Compute and compare the degrees of monopoly power (Lerner Index) for cases in (a), (c), and (f).
8. Suppose, instead of price ceiling, government imposes a per unit tax of $200. Find the Apple’s price, quantity and producer surplus for iPad.

I have a - e I just need help on f - h

1) “Demand” is best defined as the relationship between:

1. the price of a good and the quantity consumers are willing and able to buy at each price level.
2. the current price of a good and the quantity demanded at that price.
3. the quantity supplied and the price people are willing to pay for a good.
4. the amount of income someone has and the price he is willing to pay for a good.

2) A home theater system and an HD television would be considered an example of:

A) substitute goods.

2. giffen goods.
3. inferior goods.
4. complementary goods.

3) Many people consider hot dogs to be an inferior good. For such people, all else held constant, a decrease in income would cause their demand for hot dogs to:

1. increase.
2. stay the same.
3. decrease.
4. cannot be determined with the information given.

4) If movies on DVD for home rental and movies seen at a theater are substitutes, and the price of movies seen at a theater increases, the demand for movies on DVD will:

A) increase.

2. stay the same.
3. decrease.
4. cannot be determined.

5) Which of the following is not considered a factor that influences supply?

A) Technology.

2. Production taxes and subsidies.
3. The number of buyers.
4. Resource prices.

6) For the U.S. economy, the largest expenditure category is:

A) government expenditures.

2. net export expenditures.
3. personal consumption expenditures.
4. investment expenditures.

7) Greater consumer confidence, wealth, available consumer credit, and disposable income ________ personal consumption expenditures.

1. increase
2. decrease
3. have no effect on
4. none of the above

8) Higher expected profits and business confidence ________ investment spending.

A) decrease

2. increase
3. do not affect
4. none of the above.

9) Appreciation of the U.S. dollar will ________ exports and ________ imports, other things equal.

1. increase; increase
2. increase; decrease
3. decrease; decrease
4. decrease; increase

10) The reserve requirement is 0.20. What is the simple deposit multiplier?

A) 1

2. 5
3. 0.10
4. 100

11) The interest rate that commercial banks charge each other for loans of reserves to meet their minimum reserve requirements is called:

A) treasury bill rate.

2. federal funds rate.
3. prime interest rate.
4. none of the above.

12) An increase in the reserve requirement would:

1. decrease excess reserves and reflect an expansionary monetary policy.
2. decrease excess reserves and reflect a contractionary monetary policy.
3. increase excess reserves and reflect an expansionary monetary policy.
4. increase excess reserves and reflect a contractionary monetary policy.

A new American graduate is contemplating buying a Japanese, German, or an American car. No matter the type of car, he plans to buy a new one at the end of 8 years. Japanese car will cost $30,000 and have a fuel usage of 23 Miles Per gallon (mpg) for the first 2 years, and will decrease by 3% per year thereafter. Repair cost will start at $700 per year, and increase by 3% per year. At the end of year 8, the car can be sold for $5000. Insurance cost will be $700 for the first year, increasing by 2% per year thereafter.

A German car will cost $45,000 and have fuel usage of 21mpg for the first 5 years, and decrease by 1% thereafter to year 8. Repair cost will start at $1000 in year 1 and increase by 4% per year. It will have a salvage value of $7000 at the end of year 8. Insurance cost will be $850 the first year, increasing by 2% per year thereafter.
The American car will cost $35,000 and have fuel usage of 20mpg for the first 3 years, and will decrease by 3% per year thereafter. Repair cost will be $800 in year 1, increasing by 4% per year thereafter. Being an American, the graduate will price the pride of owning an American car at $0.4 for every 20 miles driven, increasing by 2% per year. Insurance cost will be $800 per year increasing by 2.2% per year. The car can be sold for $5500 at the end of year 8.
If the graduate anticipates driving 150000 miles by the end of year 8 and the average interest rate is expected to remain at 5% per year, which car is economically affordable based on present worth analysis? Assume fuel cost will be $3 per gallon in year 1 and increase by an average of 2% per year. Show all your workings.

Record transactions and calculate financial statement amounts  The transactions relating to the formation of Blue Co. Stores Inc., and its first month of operations follow. Prepare an answer sheet with the columns shown. Record each transaction in the appropriate columns of your answer sheet. Show the amounts involved and indicate how each account is affected (+ or −). After all transactions have been recorded, calculate the total assets, liabilities, and stockholders’ equity at the end of the month and calculate the amount of net income for the month.

a) The firm was organized and the stockholders invested cash of $16,000.

b) The firm borrowed $10,000 from the bank; a short-term note was signed.

c) Display cases and other store equipment costing $3,500 were purchased for cash. The original list price of the equipment was $3,800, but a discount was received because the seller was having a sale.

d) A store location was rented, and $2,800 was paid for the first month’s rent.

e) Inventory of $30,000 was purchased; $18,000 cash was paid to the suppliers, and the balance will be paid within 30 days.

f) During the first week of operations, merchandise that had cost $8,000 was sold for $13,000 cash.

g) A newspaper ad costing $200 was arranged for; it ran during the second week of the store’s operations. The ad will be paid for in the next month.

h) Additional inventory costing $8,400 was purchased; cash of $2,400 was paid, and the balance is due in 30 days.

i) In the last three weeks of the first month, sales totaled $27,000, of which $19,200 was sold on account. The cost of the goods sold totaled $18,000.

j) Employee wages for the month totaled $3,700; these will be paid during the first week of the next month.

k) The firm collected a total of $6,320 from the sales on account recorded in transaction i.

l) The firm paid a total of $9,440 of the amount owed to suppliers from transaction e.

Lahser Corp. produces component parts for durable medical equipment manufacturers. The controller is building a master budget for the first quarter of the upcoming calendar year. Selected information from the accounting records is presented next:

a. Accounts Receivable as of January 1 are $56,800. Selling price per unit is projected to remain stable at $13 per unit throughout the budget period. Sales for the first six months of the upcoming year are budgeted to be as follows: January $99,100 February $118,100 March $114,700 April $108,400 May $103,300 June $121,200

b. Sales are 20% cash and 80% credit. All credit sales are collected in the month following the sale.

c. Lahser Corp. has a policy that states that each month’s ending inventory of finished goods should be 10% of the following month’s sales (in units).

d. Three pounds of direct material is needed per unit at $2.20 per pound. Ending inventory of direct materials should be 20% of next month’s production needs.

e. Monthly manufacturing overhead costs are $5,530 for factory rent, $2,900 for other fixed manufacturing costs, and $1.10 per unit produced for variable manufacturing overhead. All costs are paid in the month in which they are incurred.

Questions:

1. What are the budgeted total cash collections for the 1st quarter? (1 point)

2. What are the budgeted total cash collections for the 2nd quarter? (1 point)

3. What is the budgeted production for the first quarter in terms of number of units? (HINT: Convert total sales to unit sales for each month) (1 point)

4. What is the budgeted direct materials cost for the first quarter? (1 point)

5. What is the budgeted manufacturing overhead for the first quarter? (1 point)