Question & Answer

If the government is running a budget deficit, does this mean that national income will increase?

1. Explain the shape of the LRMC curve in diagram (d) in Figure 6.12. 2. What would the LRMC curve look like if the LRAC curve were ‘flat bottomed’ as in Figure 6.11?

Compare the relative benefits of subsidies and high minimum prices to (a) the consumer; (b) the producer.

Environmental decision making — Environment Aotearoa and ‘dirty dairying’ in New Zealand In October 2015, Statistics New Zealand published the first comprehensive and independent report on the state of the country’s environment. This provided information on five ‘domains’ — air, atmosphere and climate, fresh water, land, and marine. The report was the first in a three-yearly cycle that reports on one domain every six months and provides a combined, comprehensive picture once every three years.   At the time of its release the Minister for Statistics, Craig Foss, stated:   This is the first comprehensive report on New Zealand’s environment produced by Statistics New Zealand. It puts into practice the maxim that you manage what you measure. Robust, independent financial reporting has helped achieve significant improvements in New Zealand’s financial management and our ambition is to achieve the same for the environment.   Similarly, the Minister for the Environment, Nick Smith, explained:   New Zealand’s environment is so important to our quality of life, our successful exporting industries and our nation’s brand that we need robust, independent reporting. It enables us to know where we match up, what areas need more attention, and helps us figure out what we need to do about problem areas.   As the country’s population increases, its economy develops and lifestyles change, pressures on its natural resources grow. For example, there have been longstanding issues associated with dairy farming polluting rivers, referred to as ‘dirty dairying’, with at least 151 prosecutions over a four-year period from July 2008 to June 2012 involving 300 charges for unlawful discharges of dairy effluent.70 Regular and independent monitoring of the state of those resources is a first and vital step towards stopping, and hopefully reversing, further degradation.   (a) With the use of online data, search for evidence that the dairy industry in New Zealand is working to prevent ‘dirty dairying’. (b) Is it possible for you to know the conditions under which the products you purchase are produced? Why? (c) Is it possible for managers of a dairy cooperative, such as Fonterra, to know with certainty that their outsource partners comply with agreed-upon working conditions? Why? (LO1 and 2)

What impact might the balance sheets of economic agents have on the influence of interest rates in affecting aggregate expenditure?

Pleasant Co. manufactures specialty bike accessories. The company is known for product quality, and it has offered one of the best warranties in the industry on its higher-priced products—a lifetime guarantee,performing all the warranty work in its own shops. The warranty on these products is included in the sales price. Due to the recent introduction and growth in sales of some products targeted to the low-price market, Pleasant is considering partnering with another company to do the warranty work on this line of products, if customers purchase a service contract at the time of original product purchase. Pleasant has called you to advise the company on the accounting for this new warranty arrangement. Instructions If your school has a subscription to the FASB Codification, go to http://aaahq.org/asclogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses. (a) Identify the accounting literature that addresses the accounting for the type of separately priced warranty that Pleasant is considering. (b) When are warranty contracts considered separately priced? (c) What are incremental direct acquisition costs and how should they be treated?

A vertical boring mill is used to bore the inside diameter of a large batch of tube-shaped parts. The diameter = 28.0 in and the length of the bore = 14.0 in. Current cutting conditions are: speed = 200 ft/min, feed = 0.015 in/rev, and depth = 0.125 in. The parameters of the Taylor equation for the cutting tool in the operation are: n = 0.23 and C = 850 (ft/min). Tool change time = 3.0 min, and tooling cost = $3.50 per cutting edge. The time required to load and unload the parts = 12.0 min, and the cost of machine time on this boring mill = $42.00/hr. Management has decreed that the production rate must be increased by 25%. Is that possible? Assume that feed must remain unchanged in order to achieve the required surface finish. What is the current production rate and the maximum possible production rate for this job?

Explain the liquidity premium theory. (LO3)

1. Give other examples of each of the four types of externality. 2. Redraw Figure 12.4, only this time assume there is only one producer, which is thus a monopoly. How does the existence of power affect the relationship between the private and the social optimum positions? 3. Redraw Figure 12.4, only this time assume that at low levels of production the good generates no external costs. Only once a certain outcome is reached (Qx) does the production of additional units generate rising external costs.

As indicated in Section 23.4, the effect of a cutting fluid is to increase the value of C in the Taylor tool life equation. In a certain machining situation using HSS tooling, the C value is increased from C = 200 to C = 225 due to the use of the cutting fluid. The n value is the same with or without fluid at n = 0.125. Cutting speed used in the operation is v = 125 ft/min. Feed = 0.010 in/rev and depth = 0.100 in. The effect of the cutting fluid can be to either increase cutting speed (at the same tool life) or increase tool life (at the same cutting speed). (a) What is the cutting speed that would result from using the cutting fluid if tool life remains the same as with no fluid? (b) What is the tool life thatwould result if the cutting speed remained at 125 ft/min? (c) Economically, which effect is better, given that tooling cost = $2.00 per cutting edge, tool change time = 2.5 min, and operator and machine rate = $30/hr? Justify you answer with calculations, using cost per cubic in of metal machined as the criterion of comparison. Ignore effects of workpart handling time.

What is stretch forming?

For what reasons might GDP be a poor indicator of (i) the level of development of a country; (ii) its rate of economic development?

1. Assume that there is a growing demand for computer programmers. As a result more people train to become programmers. Does this represent a rightward shift in the supply curve of programmers, or merely the supply curve becoming more elastic in the long run, or both? Explain. 2. Which is likely to be more elastic, the supply of coal miners or the supply of shop assistants? Explain.

1.      Order the following primary value chain activities in the correct sequence. a.       Marketing and sales activities b.      Service activities c.       Operations d.      Outbound logistics   e.       Inbound logistics

What is blockchain technology? Why did it gain large popularity in such a short amount of time? (LO2)

A 3.0-in-long cylindrical billet whose diameter = 1.5 in is reduced by indirect extrusion to a diameter = 0.375 in. Die angle = 90°. In the Johnson equation, a = 0.8 and b = 1.5. In the flow curve for the work metal, K = 75,000 lb/in2 and n = 0.25. Determine (a) extrusion ratio, (b) true strain (homogeneous deformation), (c) extrusion strain, (d) ram pressure, (e) ram force, and (f) power if the ram speed = 20 in/min.

What tax issue arises when a shareholder receives a nontaxable stock distribution?

Every year the number of people who want to run the London Marathon far exceeds the number of places available. For example, 457 861 applicants were willing to pay £39 to enter the 2020 event. Unfortunately, there were only 17 500 places for these applicants and so the majority ended up very disappointed. Find out the different methods used by the organisers to allocate all 40 000 places and consider their advantages and disadvantages.

Where can authoritative IFRS related to the accounting for leases be found?

In what ways can interventionist industrial policy work with the market, rather than against it? What are the arguments for and against such policy?

Describe the liquidity and credit risk of savings institutions, and discuss how each is managed. (LO3)

A business buys two identical tangible personal property assets for the same price. It buys one at the beginning of the year and one at the end of year. Under what conditions would the taxpayer’s depreciation on each asset be exactly the same? Under what conditions would it be different?

What is a copolymer?

Would it be possible for firms to calculate their maximum-profit output if they did not use marginal cost and marginal revenue concepts?

Why are bank regulators more concerned about a large bank failure than a small bank failure? (LO6)