Problem One Activity-Based Costing
Brown Land Coffee Ltd. makes two types of coffee, Gourmet and Espresso, and applies
overhead on the basis of direct-labor hours. Anticipated overhead for the upcoming accounting
period is $35
R&D S pending
Increase in R &D a nd in output growth.
A decrease in the fertility o f applied research; a (small) decrease in growth.
Such a treaty would likely increase R&D spending since appropriability would increase.
Purchasing Power Parity
Mexican standard o f living relative to the U .S.-exchange rate method: 500/5000 =0.10;
PPP method: 1000/5000=0.20. I t makes a huge difference.
The Production Functio
Problem One Activity-Based Costing
1. Calculate the cost per unit of each product using traditional costing method, assuming use
of direct-labor hours to apply overhead to production.
POHR = estimated overhead/estima
The University of Toronto
Department of Economics
1. preferences and indifference curves
What axioms are violated by indifference curves that cross?
Graph and describe indifference curves for the u
ECO202: Tutorial Worksheet 15
1. For each of the following problems, would you use real payments and real interest rates
or nominal payments and nominal interest rates to compute the expected present
discounted value? In each case, explain why.
ECO202: Tutorial Worksheet 13
1. Why is the amount of R&D spending important for growth? How do the appropriability and
fertility of research affect the amount of R&D spending? For each of the following policy
proposals, determine how the appropriability
University of Toronto Mississauga
Xxx xx, 2010
MANAGERIAL ACCOUNTING I
One hour and fifty minutes
Silent calculator. Programmable calculators must be reset.
Failure to reset before the test begins is an academic
9.3 Suppose there are 100 identical firms in the perfectly competitive notecard industry. Each firm has a
short-run total cost curve of the form: STC 1 300 q3 0:2q2 4q 10 and marginal cost is given by
SMC :01q2 :4q 4 a. Calculate the firms short-run suppl
8.4 Suppose that a firm faces a demand curve that has a constant elasticity of 2. This demand curve is
given by q 256=P2 Suppose also that the firm has a marginal cost curve of the form MC 0:001q a.
Graph these demand and marginal cost curves. b. Calculat
8.9 Suppose the production function for high-quality brandy is given by q K L p where q is the output
of brandy per week and L is labor hours per week. In the short run, K is fixed at 100, so the short-run
production function is q 10 L p a. If capital ren
13.9 Mrs. Smith has a guaranteed income of $10 per day from an inheritance. Her preferences require
her always to spend half her potential income on leisure (H) and consumption (C). a. What is Mrs.
Smiths budget constraint in this situation? b. How many h
13.7 Carl the clothier owns a large garment factory on a remote island. Carls factory is the only source of
employment for most of the islanders, and thus Carl acts as a monopsonist. The supply curve for
garment workers is given by L 80w and the marginal-
9.10 The domestic demand for portable radios is given by Demand: Q 5,000 100P where price P is
measured in dollars and quantity Q is measured in thousands of radios per year. The domestic supply
curve for radios is given by Supply: Q 150P a. What is the d
1. Consider the market for soybeans in Smallia. The market demand is given as P = 1000
2Q while the market supply is given as P = 200 + 6Q. Assume that the market for
soybeans in Smallia is closed to international trade. For each of the following questio
1. Suppose the market for corn in Utopia has market demand of P = 1000 2Q and market
supply of P = 200 + 6Q. Assume the market for corn in Utopia is a closed market. Use
this information to answer this set of questions. Make sure you show all of your work
1. Problem 3 consists of two different scenarios requiring you to find the market supply
a. The market supply curve is given as P = 100 + 2Q. Several new firms enter this
market and now you are told that at each price there are now 50 more units of
1. Consider the market for smart phones. Initially the market demand for these phones is
given as P = 500 .005Q and the market supply for these phones is given as P = .005Q.
For all questions in this problem make sure you show your work and not just your
3d. Yes, these values are consistent with our knowledge o fPDV. The PDV o f the second
option is lower than the first because it allows larger payments in the future. In
discounting the larger future payments more heavily, it causes the total PDV o f the
. Answer the next set of questions about various kinds of elasticity.
a. You are given a demand curve, P = 10 Q, and asked to calculate the arc elasticity of demand between
the quantities of 1 unit and 2 units. Show the general equation you plan to use be
Consider the market for soft drinks. You know that the demand curve in this market contains the points
(Q, P) = (100,000, $1.00) and (50,000, $2.00). You also know that the demand curve is linear. The linear
supply curve contains the points (Q, P) = (0, $
3. Suppose that the government of Zanzi decides that there is a need to reduce cigarette smoking in their
country. The cigarette market in Zanzi can currently be described by the following demand and supply
Demand for cigarettes: Q = 1125 12.5P
4. Coba is a small, closed economy. Cobas domestic demand curve and domestic supply curve for
coconuts is given by the following equations where Q is units of coconuts and P is the price per unit of
Domestic Demand: P = 100 (1/20)Q
1. In Boomtown government officials are considering implementing an excise tax on the
producers of tennis balls. They have called you in to analyze the impact of this proposed
tax. Currently (before the excise tax) market demand and market supply of tenni
Suppose the market for candy bars can be described as follows:
When the price of candy bars is $1.00 per candy bar, 500 candy bars are demanded. When the
price of candy bars increases by 10%, the quantity of candy bars demanded falls by 20%. The
1. Consider the small, closed economy of Exurbia. Exurbia produces mittens and the
domestic market demand and domestic market supply curves for mittens in Exurbia are
as follows where Q is pairs of mittens and P is the price per pair of mittens:
9.2 A perfectly competitive market has 1,000 firms. In the very short run, each of the firms has a fixed
supply of 100 units. The market demand is given by Q 160,000 10,000P a. Calculate the equilibrium
price in the very short run. b. Calculate the demand
9.4 Suppose there are 1,000 identical firms producing diamonds and that the short-run total cost curve
for each firm is given by STC q2 wq and short-run marginal cost is given by SMC 2q w where q is
the firms output level and w is the wage rate of diamond
Question 1. Students did badly.
Part a: many students did it right. Depending on the explanation I deducted 0.5 to 1.5
marks. If some students did it right but not good explanation I gave 4. Many also did it
wrong. Just stated PPP but did not discuss the