FIN 630 Acme and acquisition of EU non-EU

Acme, a United States firm, has been in acquisition talks with two different European firms. JEL Industries is headquartered in a country that is part of the European Union (EU), and uses the Euro, while DBC Industries is headquartered in a European country that does not belong to the Union and does not use the Euro as their primary currency. Based only on the knowledge of whether or not the firm is located in a country within or outside of the European Union, recommend one of the organizations and explain why you selected that organization. In your response be sure to describe the implications of running a business in a country that is within or outside of the European Union. Describe the advantages and disadvantages of the choice you made

 

Activity -Outside Sales Position -2019

Activity Instructions: Outside Sales Position

This activity is comprised of three (3) parts. Your Activity responses should be both grammatically and mechanically correct and formatted in the same fashion as the Activity itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your response and document them in a bibliography using APA style. (100 points) (A 4-page response is required for the combination of Parts A, B, and C.)

Part A

You are in the recruiting department of a fairly large national wholesale distributor of widgets.  Examine the following job description for an outside salesperson to sell widgets to truckers in Alabama.  Write four (4) effective, legal, behavioral questions that might be used in a job interview and explain why you would ask each particular question.  (52 points) Part B You receive the following memo from your "politically incorrect" boss.  While you do not expect him to stay with the company very long, he does make a couple of good points in the memo, if you can focus on them despite his personal bias.  Write two (2) additional effective, legal, behavioral questions that might also be used in a job interview to address his legitimate concerns and explain how you made the question legal.  (24 points)   PartC Write a proposal that describes how and where you would advertise this position.  Use at least four (4) different advertising methods.  Your advertising budget is very small.  (24 points)

ACC500 Managerial Accounting FINAL

ACC500 Managerial Accounting

Final Exam

 

1) Dubuque Company has the following sales budget:

 

Month                              Cash Sales                                          Credit Sales

February                               $14,000                                                  $28,000

March                                      12,800                                                    29,200

April                                         10,800                                                    26,400

 

Collections of credit sales are 40% in the month of sale, 50% in the month after sale and 10% two months after sale.  No uncollectible accounts are expected.

 

Required:

Prepare a schedule of cash collections for April.

 

 

 

 

2) The Drew Company has the following information available:

 

Month                                                      Budgeted Sales

March                                                                  $150,000

April                                                                       153,000

May                                                                        151,000

June                                                                        254,500

July                                                                         252,500

 

The gross profit rate is 40% and the desired ending inventory level is 20% of the next month's cost of sales.

 

Required:

Prepare a purchases budget for April, May and June.

 

 

 

 

3)                                                                               Direct Material                        Direct Labor

Std. price per unit of input                                       $12 per foot                       $14 per hour

Actual price per unit of input                                 $14 per foot                       $13 per hour

Std. inputs allowed per unit of output                             5 feet                                 3 hours

Actual units of input                                                      2,500 feet                         1,550 hours

 

Actual units of output                                                   600 units

 

Required:

Compute the price and quantity variances for direct materials and direct labor.

 

 

 

 

 

 

 

4) Progressive Company produces a product in a process-costing system involving several departments.  The company uses the weighted-average method of product costing.  The first department's data for the month of April follow:

 

Units in beginning work-in-process inventory                                                                           25,000

Units started during April1                                                                                                            155,000

Units completed during April                                                                                                        140,000

Units in ending work-in-process inventory                                                                                 40,000

 

Direct materials added in current month                                                                                 $188,000

Conversion costs added in current month                                                                               $175,000

Direct materials–beginning work-in-process inventory                                                        $35,750

Conversion costs–beginning work-in-process inventory                                                         $6,225

 

Stage of Completion:

                                                                                                             Materials               Conversion Costs

Beginning work-in-process inventory                                             100%                                        50%

Ending work-in-process inventory                                                   100%                                        35%

 

Required:

A) Compute equivalent units for materials and conversion costs.

B) Compute the cost per unit for materials and conversion costs.

C) Compute the cost of the units transferred.

D) Compute the cost of the ending work-in-process inventory.

 

5) Splitsville Company has two departments.   Factory overhead costs are applied based on direct labor cost in Department A and machine hours in Department B.  The following information is available:

 

Budgeted Items                                                                   Dept. A                                  Dept. B

Direct labor cost                                                               $190,000                               $165,000

Machine hours                                                                      51,000                                    50,000

Factory overhead cost                                                    $325,000                               $280,000

 

Actual data for Job #10 are as follows:

Actual Items                                                                        Dept. A                                  Dept. B

Direct materials requisitioned                                       $20,000                                 $16,000

Direct labor cost                                                                 $17,000                                 $24,000

Machine hours                                                                        7,000                                      5,000

 

Required:

A) Compute the budgeted factory overhead rate for Department A.

B) Compute the budgeted factory overhead rate for Department B.

C) What is the total overhead cost for Job #10?

D) If Job #10 consists of 50 units of product, what is the unit cost of this job?

 

               

ACC 561– Ideal Manufacturing Company- 8.8.2017

ACC 561–Managerial Perspective Analysis - Ideal Manufacturing Company

MANAGERIAL ANALYSIS

BYP17-2 Ideal Manufacturing Company of Sycamore, Illinois, has supported a research and development (R&D) department that has for many years been the sole contributor to the company's new farm machinery products. The R&D activity is an overhead cost center that provides services only to in-house manufacturing departments (four different product lines), all of which produce agricultural/farm/ranch related machinery products. The department has never sold its services outside, but because of its long history of success, larger manufacturers of agricultural products have approached Ideal to hire its R&D department for special projects. Because the costs of operating the R&D department have been spiraling uncontrollably, Ideal's management is considering entertaining these outside approaches to absorb the increasing costs. But, (1) management doesn't have any cost basis for charging R&D services
to outsiders, and (2) it needs to gain control of its R&D costs. Management decides to implement an activity-based costing system in order to determine the charges for both outsiders and the inhouse users of the department's services.

R&D activities fall into four pools with the following annual costs.

Market analysis                                   $1,050,000

Product design                                    2,350,000

Product development                         3,600,000

Prototype testing                                 1,400,000



Activity analysis determines that the appropriate cost drivers and their usage for the four activities are:

Total
Activities                     Cost Drivers               Estimated Drivers

Market analysis           Hours of analysis        15,000 hours

Product design            Number of designs      2,500 designs

Product development Number of products    90 products

Prototype testing         Number of tests          500 tests

 
Instructions

(a) Compute the activity-based overhead rate for each activity cost pool.

(b) How much cost would be charged to an in-house manufacturing department that consumed 1,800 hours of market analysis time, was provided 280 designs relating to 10 products, and requested 92 engineering tests?

(c) How much cost would serve as the basis for pricing an R&D bid with an outside company on a contract that would consume 800 hours of analysis time, require 178 designs relating to 3 products, and result in 70 engineering tests?

(d) What is the benefit to Ideal Manufacturing of applying activity-based costing to its R&D activity for both in-house and outside charging purposes?

8.aug2017-ACC291 Principles of Accounting II Final Exam

1) Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $300,000 and credit sales are $1,200,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?
    A.     

Bad Debts Expense    ................    ................    $15,000     
          Allowances for Doubtful Accounts    ................    ................    $15,000

    B.     

Bad Debts Expense    ................    ................    $12,000     
          Allowances for Doubtful Accounts    ................    ................    $12,000

    C.     

Bad Debts Expense    ................    ................    $12,000     
          Accounts Receivable    ................    ................    .................    $12,000

    D.     

Bad Debts Expense    ................    ................    $15,000     
          Accounts Receivable    ................    ................    .................    $15,000



2) Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are $15,000. If the balance of the Allowance for Doubtful Accounts is $3,000 credit before adjustment, what is the amount of bad debts expense for that period?
    A.     
$15,000
    B.     
$12,000
    C.     
$18,000
    D.     
$8,000


3) Intangible assets
    A.     
should be reported under the heading Property, Plant, and Equipment
    B.     
should be reported as a separate classification on the balance sheet
    C.     
should be reported as Current Assets on the balance sheet
    D.     
are not reported on the balance sheet because they lack physical substance


4) Intangible assets are the rights and privileges that result from ownership of long-lived assets that
    A.     
must be generated internally
    B.     
are depletable natural resources
    C.     
do not have physical substance
    D.     
have been exchanged at a gain


5) The book value of an asset is equal to the
    A.     
asset's market value less its historic cost
    B.     
blue book value relied on by secondary markets
    C.     
replacement cost of the asset
    D.     
asset's cost less accumulated depreciation


6) Gains on an exchange of plant assets that has commercial substance are
    A.     
deducted from the cost of the new asset acquired
    B.     
deferred
    C.     
not possible
    D.     
recognized immediately


7) Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as
    A.     
capital expenditures
    B.     
expense expenditures
    C.     
improvements
    D.     
revenue expenditures


8) Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as
    A.     
capital expenditures
    B.     
expense expenditures
    C.     
ordinary repairs
    D.     
revenue expenditures


9) When an interest-bearing note matures, the balance in the Notes Payable account is
    A.     
less than the total amount repaid by the borrower
    B.     
the difference between the maturity value of the note and the face value of the note
    C.     
equal to the total amount repaid by the owner
    D.     
greater than the total amount repaid by the owner


10) The interest charged on a $200,000 note payable, at a rate of 6%, on a 2-month note would be
    A.     
$12,000
    B.     
$6,000
    C.     
$3,000
    D.     
$2,000



11) If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?
    A.     
$3,000,000
    B.     
$90,000
    C.     
$300,000
    D.     
$210,000


12) Hilton Company issued a four-year interest-bearing note payable for $300,000 on January 1, 2011. Each January the company is required to pay $75,000 on the note. How will this note be reported on the December 31, 2012 balance sheet?
    A.     
Long-term debt, $300,000.
    B.     
Long-term debt, $225,000.
    C.     
Long-term debt, $150,000; Long-term debt due within one year, $75,000.
    D.     
Long-term debt, $225,000; Long-term debt due within one year, $75,000.


13) A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011 for 648,666, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2011, is
    A.     
$30,000
    B.     
$24,000
    C.     
$32,434
    D.     
$25,946


14) When the effective-interest method of bond discount amortization is used
    A.     
the applicable interest rate used to compute interest expense is the prevailing market interest rate on the date of each interest payment date
    B.     
the carrying value of the bonds will decrease each period
    C.     
interest expense will not be a constant dollar amount over the life of the bond
    D.     
interest paid to bondholders will be a function of the effective-interest rate on the date the bonds were issued


15) If a corporation has only one class of stock, it is referred to as
    A.     
classless stock
    B.     
preferred stock
    C.     
solitary stock
    D.     
common stock


16) Capital stock to which the charter has assigned a value per share is called
    A.     
par value stock
    B.     
no-par value stock
    C.     
stated value stock
    D.     
assigned value stock


17) ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2011. What is the annual dividend on the preferred stock?
    A.     
$50 per share
    B.     
$5,000 in total
    C.     
$500 in total
    D.     
$.50 per share


18) Manner, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2011. There were no dividends declared in 2010. The board of directors declares and pays a $45,000 dividend in 2011. What is the amount of dividends received by the common stockholders in 2011?
    A.     
$0
    B.     
$25,000
    C.     
$45,000
    D.     
$20,000


19) When the selling price of treasury stock is greater than its cost, the company credits the difference to
    A.     
Gain on Sale of Treasury Stock
    B.     
Paid-in Capital from Treasury Stock
    C.     
Paid-in Capital in Excess of Par Value
    D.     
Treasury Stock


20) The purchase of treasury stock
    A.     
decreases common stock authorized
    B.     
decreases common stock issued
    C.     
decreases common stock outstanding
    D.     
has no effect on common stock outstanding


21) Marsh Company has other operating expenses of $240,000. There has been an increase in prepaid expenses of $16,000 during the year, and accrued liabilities are $24,000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities, what were Marsh's cash payments for operating expenses?
    A.     
$228,000
    B.     
$232,000
    C.     
$200,000
    D.     
$280,000


22) Where would the event purchased land for cash appear, if at all, on the indirect statement of cash flows?
    A.     
Operating activities section
    B.     
Investing activities section
    C.     
Financing activities section
    D.     
Does not represent a cash flow


23) In performing a vertical analysis, the base for cost of goods sold is
    A.     
total selling expenses
    B.     
net sales
    C.     
total revenues
    D.     
total expenses


24) Blanco, Inc. has the following income statement (in millions):
BLANCO, INC.
Income Statement
For the Year Ended December 31, 2011
Net Sales    ..............................    $200
Cost of Goods Sold    ..............................    120
Gross Profit    ..............................    80
Operating Expenses    ..............................    44
Net Income    ..............................    $ 36

Using vertical analysis, what percentage is assigned to Net Income?
    A.     
100%
    B.     
82%
    C.     
18%
    D.     
25%


25) Dawson Company issued 500 shares of no-par common stock for $4,500. Which of the following journal entries would be made if the stock has a stated value of $2 per share?
    A.        
Cash         ...........................................................    $4,500     
     Common Stock              4,500

    B.        
Cash         ....................................    $4,500     
     Common Stock              1,000
     Paid-In Capital in Excess of Par              3,500

    C.        
Cash         ......................    $4,500     
     Common Stock              1,000
     Paid-In Capital in Excess of Stated Value              3,500

    D.        
Common Stock         ...........................................................    $4,500     
     Cash              4,500



26) Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a
    A.     
credit to Paid-In Capital from Treasury Stock for $9,000
    B.     
credit to Retained Earnings for $9,000
    C.     
debit to Pain-In Capital from Treasury Stock for $45,000
    D.     
debit to Retained Earnings for $45,000


27) Which of the following is a fundamental factor in having an effective, ethical corporate culture?
    A.     
Efficient oversight by the company's Board of Directors
    B.     
Workplace ethics
    C.     
Code of conduct
    D.     
Ethics management programs


28) Two individuals at a retail store work the same cash register. You evaluate this situation as
    A.     
a violation of establishment of responsibility
    B.     
a violation of segregation of duties
    C.     
supporting the establishment of responsibility
    D.     
supporting internal independent verification


29) The Sarbanes-Oxley Act imposed which new penalty for executives?
    A.     
Fines
    B.     
Suspension
    C.     
Criminal prosecution for executives
    D.     
Return of ill-gotten gains


30) The Sarbanes-Oxley Act requires that all publicly traded companies maintain a system of internal controls. Internal controls can be defined as a plan to
    A.     
safeguard assets
    B.     
monitor balance sheets
    C.     
control liabilities
    D.     
evaluate capital stock

ECO561 Week 6 Signature Assignment Challenges of Expansion to a Foreign Location

Purpose of Assignment 

This week students will review and revise their Week 3 Research Analysis for Business Signature Assignment based on economic analysis and the feedback provided by their facilitator. Students will also expand their Week 3 analyses to evaluate the challenges of expanding their chosen company's production to a foreign market.

About Your Signature Assignment

This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments might be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements. 

Assignment Steps 

Resources: Tutorial help on Excel^® and Word functions can be found on the Microsoft^® Office website. There are also additional tutorials via the web offering support for Office products. 

Revise your Week 3 assignment, Research Analysis for Business, using the feedback provided by your facilitator. This Week 6 report should only include one conclusion, so you will need to rewrite the conclusion you included in your Week 3 assignment, Research Analysis for Business. 

Select a foreign market in which to expand your chosen product. If you wish, you may use one of the countries your team analyzed in their Week 5 Comparative and Absolute Advantage Assignment. 

Prepare a minimum1,750-word report addressing the points listed below. The use of tables and/or charts to display economic data over the time period discussed is highly encouraged, you may submit any economic data in Microsoft^® Excel^® format in a separate file. You may use the U.S. Department of Labor's Bureau of Labor Statistics (BLS), U.S. Dept. of Commerce's Bureau of Economic Analysis (BEA), the Federal Reserve of St. Louis's FRED data, the CIA World Fact Book, World Bank data, and World Trade Organization, or other appropriate sources you might find on the Internet or in the University Library. The new sections of your report should:

• Evaluate current global economic conditions and their effects on macroeconomic indicators in your selected country. Provide forecasts for population growth, gross domestic product (GDP) growth, GDP per capita growth, export growth, and sales growth.
• Evaluate any competitors' existing production in the chosen country.
• Assess sales forecasts in the selected country by using the Federal Reserve of St. Louis's FRED data, the CIA World Fact Book, World Bank data, World Trade Organization, or other appropriate sources you might find on the Internet or in the University Library.
• Categorize the type of economy that exists in your selected country as closed, mixed, or market.  What is the difference between these types of economies and how might this affect your expansion?
• Assess how your chosen country's current credit market conditions, especially interest rates and the availability of financing, affect demand for your product or service and your planning or operating decision for your production in that country.
• Analyze the role of the selected country's central bank on that country's economy.
• Compare the availability, education, and job skills of the work force in the selected country. Discuss any additional challenges of international production, such as political stability, availability of government financing or other incentives, threat of capital controls, and exchange rate risks.
• Explain any additional supply chain challenges you anticipate if attempting to make your product in your chosen country and selling the product in other countries.
• Based on the data gathered and analysis performed for this report write a conclusion in which you:
• Create business strategies, including price and non-price strategies, based on your market structure to ensure the market share and potential market expansions and explore global opportunities for your business in a dynamic business environment and provide recommendations.
• Develop a recommendation for how the firm can manage its future production by synthesizing the macroeconomic and microeconomic data presented.
• Propose how the firm's position within the market and among its competitors will allow it to take your recommended action.
• Recommend strategies for the firm to sustain its success going forward by evaluating the findings from demand trends, price elasticity, current stage of the business cycle, and government.
• Recommend any comparative advantages your company will have over competitors currently operating in that country, and defend your position, either for or against, expanding your company's production into your chosen country based on your research. 

Integrate with the Week 3 Individual Assignment, and incorporate corrections and suggestions from the instructor's feedback. The final report should be a minimum of 2,800 words. 

Cite a minimum of three peer reviewed sources not including the textbook. 

Include all peer-reviewed references and government economic data sources/references from Week 3. 

Format your assignment consistent with APA guidelines.

 

 

 

ECO561 Final Exam Score 97 PERCENT (2019)

Question 1
The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that:
    the production possibilities curves of any two nations are identical
    a nation's production possibilities line lies to the right of its trading possibilities line
        a nation's trading possibilities line lies to the right of its production possibilities line
        a nation's production possibilities and trading possibilities lines coincide

Question 2
The business cycle depicts:

    the phases a business goes through from when it first opens to when it finally closes
    the evolution of technology over time
    short-run fluctuations in output and employment(Probably wrong, not sure. Either answer of question 1 is wrong or question2 is wrong)
    fluctuations in the general price level

3.Which of the following have substantially equivalent effects on a nation's volume of exports and imports?

Exchange rate depreciation and domestic inflation

Exchange rate depreciation and domestic deflation

Exchange rate appreciation and domestic deflation

Exchange rate appreciation and a decrease in the domestic supply of money


4If an unintended increase in business inventories occurs at some level of GDP, then GDP:

may be either above or below the equilibrium output

is too high for equilibrium

is too low for equilibrium

entails a rate of aggregate expenditures in excess of the rate of aggregate production


5Why are economists concerned about inflation?

Inflation lowers the standard of living for people whose income does not increase as fast as the price level

Inflation increases the value of peoples' saving and encourages overspending on goods and services

Inflation generally causes unemployment rates to rise

Real GDP is necessarily falling when there is inflation


6Contractionary fiscal policy is so named because it:

involves a contraction of the nation's money supply

is aimed at reducing aggregate demand and thus achieving price stability

necessarily reduces the size of government

is expressly designed to expand real GDP
7The term "recession" describes a situation where:

government takes a less active role in economic matters

output and living standards decline

inflation rates exceed normal levels

an economy's ability to produce is destroyed


8Which of the following statements best describes the 12 Federal Reserve Banks?

They are privately owned and publicly controlled central banks whose basic goal is to earn profits for their owners.

They are privately owned and publicly controlled central banks whose basic goal is to control the money supply and interest rates in promoting the general economic welfare.

They are privately owned and publicly controlled central banks whose basic function is to minimize the risks in commercial banking in order to make it a reasonably profitable industry.

They are privately owned and privately controlled central banks whose basic goal is to provide an ample and orderly market for U.S. Treasury securities.


9The primary gain from international trade is:

tariff revenue

more goods than would be attainable through domestic production alone

increased employment in the domestic import sector

increased employment in the domestic export sector


10If the prices of all goods and services rose, but the quantity produced remained unchanged, what would happen to nominal and real GDP?

Nominal and real GDP would both rise

Real GDP would rise, but nominal GDP would be unchanged

Nominal GDP would rise, but real GDP would be unchanged

Nominal and real GDP would both be unchanged


11Pure monopolists may obtain economic profits in the long run because:

of rising average fixed costs

of barriers to entry

of advertising

marginal revenue is constant as sales increase


12Mrs. Arnold is spending all her money income by buying bottles of soda and bags of pretzels in such amounts that the marginal utility of the last bottle is 60 utils and the marginal utility of the last bag is 30 utils. The prices of soda and pretzels are $.60 per bottle and $.40 per bag respectively. It can be concluded that:

the two commodities are substitute goods

Mrs. Arnold should spend more on soda and less on pretzels

Mrs. Arnold should spend more on pretzels and less on soda

Mrs. Arnold is buying soda and pretzels in the utility-maximizing amounts


13Suppose you have a limited money income and you are purchasing products A and B, whose prices happen to be the same. To maximize your utility, you should purchase A and B in such amounts that:

their marginal and total utilities are proportionate

their marginal utilities are the same

the income and substitution effects associated with each are equal

their total utilities are the same


14Two major virtues of the market system are that it:

eliminates discrimination and minimizes environmental pollution

allocates resources efficiently and allows economic freedom

results in price level stability and a fair personal distribution of income

results in an equitable personal distribution of income and always maintains full employment


15Macroeconomics approaches the study of economics from the viewpoint of:

the entire economy

governmental units

individual firms

the operation of specific product and resource markets


16Which of the following will generate a demand for country X's currency in the foreign exchange market?

The imports of country X

Travel by citizens of country X in other countries

The desire of foreigners to buy stocks and bonds of firms in country X

Charitable contributions by country X's citizens to citizens of developing nations


17The simple circular flow model shows that:

households are on the buying side of both product and resource markets.

businesses are on the selling side of both product and resource markets.

businesses are on the buying side of the product market and on the selling side of the resource market.

households are on the selling side of the resource market and on the buying side of the product market.


18Countercyclical discretionary fiscal policy calls for:

surpluses during both recessions and periods of demand-pull inflation

surpluses during recessions and deficits during periods of demand-pull inflation

deficits during recessions and surpluses during periods of demand-pull inflation

deficits during both recessions and periods of demand-pull inflation


19If the Federal Reserve System buys government securities from commercial banks and the public:

commercial bank reserves will decline

the money supply will contract

it will be easier to obtain loans at commercial banks

commercial bank reserves will be unaffected


20The two basic markets shown by the simple circular flow model are:

product and resource

free and controlled

capital goods and consumer goods

household and business


21All else equal, a large decline in the real interest rate will shift the:

investment demand curve rightward

investment demand curve leftward

investment schedule downward

investment schedule upward


22Normal profit is:

determined by subtracting implicit costs from total revenue

the return to the entrepreneur when economic profits are zero

the average profitability of an industry over the preceding 10 years

determined by subtracting explicit costs from total revenue


23In the theory of comparative advantage, a good should be produced in that nation where:

its absolute cost in terms of real resources used is least

its cost is least in terms of alternative goods that might otherwise be produced

the production possibilities line lies further to the right than the trading possibilities line

its absolute money cost of production is least


24As output increases, total variable cost:

increases continuously at a decreasing rate

increases at a constant rate

increases more rapidly than does total cost

increases at a decreasing rate and then at an increasing rate

25Assume the reserve ratio is 25 percent and Federal Reserve Banks buy $4 million of U.S. securities from the public, which deposits this amount into checking accounts. As a result of these transactions, the supply of money is:

directly increased by $4 million and the money-creating potential of the commercial banking system is increased by $12 million.

directly increased by $4 million and the money-creating potential of the commercial banking system is increased by an additional $16 million.

not directly affected, but the money-creating potential of the commercial banking system is increased by $12 million.

directly reduced by $4 million and the money-creating potential of the commercial banking system is decreased by an additional $12 million.



26Buyers will opt out of markets in which:

standardized products are being produced

there are only foreign sellers

there are significant negative externalities

there is inadequate information about sellers and their products


27In order for mutually beneficial trade to occur between two otherwise isolated nations:

each nation must be able to produce at least one good absolutely cheaper than the other

each nation must face constant costs in the production of the good it exports

each nation must be able to produce at least one good relatively cheaper than the other

one nation's production must be labor-intensive while the other nation's production is capital-intensive


28Research for industrially advanced countries indicates that:

the more independent the central bank, the higher the average annual rate of inflation

there is no relationship between the degree of independence of a country's central bank and its inflation rate.

the more independent the central bank, the higher the average annual rate of unemployment.

the more independent the central bank, the lower the average annual rate of inflation


29A monopolistically competitive industry combines elements of both competition and monopoly. The monopoly element results from:

the likelihood of collusion

mutual interdependence

high entry barriers

product differentiation


30Because the federal government typically provides disaster relief to farmers, many farmers do not buy crop insurance even through it is federally subsidized. This illustrates:

the moral hazard problem

logrolling

the adverse selection problem

the special interest effect