How Much Are Auditors Paid?
Question 5: For General Electric and the Fortune 100
companies, can you identify the increased costs of section 404
compliance cited in the press?
For General Electric, the implementation of section 404
1. What are several red flags that E&Y either was or should have been aware of in the audit of
The several red flags include the $400 million entries to goodwill, net income rising
nearly 500% while revenue only 5%, Hea
Something Went Sour Q1
What steps does an auditor ordinarily take when confirming cash balances held on deposits
with financial institutions?
1. The auditor should send bank request directly in the mail to the banks. The bank request
Something Went Sour
Question 3: What red flags did the auditors miss?
The auditors missed how big the amount of the cash account of $4.9 million was. It
doesnt seem reasonable for a company the size of Parmalat to have $4.9 million
4. What steps should Deloitte & Touche SpA have taken with respect to Grant Thorntons audit
of the Cayman Island subsidiaries?
Deloitte & Touche SpA had the responsibility of making sure Grant Thorntons is capable of
producing a good audit and if the comp
1. Single seller
2. No close substitutesthe product is unique
3. Price maker
4. Blocked entry
5. Marginal revenue curve is below the demand curve
6. Pure profits
7. Restricts output to charge higher prices
8. The firm is the
Price Ceilings and Floors
Price Ceiling A maximum price that can be charged for a good or service
In order for a ceiling to be effective, it must be BELOW the Equilibrium price. Price ceilings are
imposed when the government feels the Pe is too high. This
The Firm, Production, and Costs
Sole Proprietorship Owned and operated by one person
Easy to set up
You are your own boss
Hard to Raise Money
Harder to have Expertise
Partnership Two or more owning
(Download to print)
The Production Possibilities Curve
How do we decide where we produce on the Production Possibilities Curve? Rather than use the
examples in the books, I prefer to use Jeans and sewing machines. Jeans are an example of
HOUSEHOLD SECTOR BUSINESS SECTOR
The Circular Flow of Wealth
Note: All Blue/Bold terms are terms you must know for the test.
My stories are in Red/Italic Print. I like to think my stories are what make the subject
real. They should help you remember and u
For pure Competition, you must learn:
1. The characteristics of pure competition.
2. Why the demand curve facing the purely competitive firm is perfectly elastic.
3. To explain why P=MR=AR=D.
4. How a purely competitive firm maximizes pro
Rule for loss Minimizing losses
As long as you cover all of your variable costs and any part of your fixed cost
you will minimize your losses. This is in the SHORT RUN only. On a graph this
is the area above the variable cost curve and below total costs
THERE ARE 2 BOOK ASSIGNMENTS
( part of the 5 writing assignments )
You will read two books about entrepreneurs or companies and answer
questions about these books.
The first Entrepreneur will be Sam Walton. You must any BOOK about Sam
Walton, below are so
The chapter is just a read thorough. Know the terms in these notes. The Nobel Prize in 2002 was given to a person
who disproved the basic assumptions in the chapter!
Marginal Benefit-Incremental value of an additional unit of a good.
Answer Sheet for Part 2 of Assignment 2
For each article, write the number of the graph that best describes what happened. Fill in only the
appropriate boxes in each chart for each article and be sure and indicate if it is an increase or a
The Two Market Model (version two)
People are free to move among the vast number of markets that exist. A buyer of a two
bedroom house could, if he chose, move over to the market for three bedroom houses and
buy one of those. A long-distance truck driver
EXCHANGE AND PRODUCTION 27
dividuals and countries will specialize in those goods
that they are relatively more efficient in producing. To
be relatively efficient means to have a lower opportun
ity cost. Countries will have comparative advantages in
We all look for ways to reduce the various risks that we face. Our house may burn down.
Because such a loss would be intolerable, we buy fire insurance. The typical contract
requires that the homeowner pay relatively small premiums every
Sample Quiz #3
Michigan State University
1. When labor supply increases, which of the following does not occur?
a. a fall in the real wage;
b. a fall in average labor productivity;
c. a rise in GDP;
d. an increase in employment
GDP and the Economy
Advance Estimates for the Second Quarter of 2013
eal gross domestic product (GDP) increased 1.7
percent at an annual rate in the second quarter of
2013, according to the advance estimates of the na
tional income and pro
Problem set #3
Michigan State University
1. Consider the following production function.
Average Productivity Marginal Product
(output/unit of labor) (output/labor)
Economics Unit 2
Standards, Essential Questions and Enduring Understanding
A Study Guide!
12SSE1: Students understand common economic terms, concepts, and economic
reasoning and make connections to their daily lives.
The Federal Reserve
The Federal Reserve System is the central bank for the United States. Woodrow
Wilson created it with the Federal Reserve Act in 1913 (2014), after several periods of
economic instability. The United States had gone into debt from th
Title of Article: So called free trade policies hurt US workers every time we pass them
Date Written/Published: April 29, 2015
Author: The Guardian/ Bernie Sanders
Thesis statement (What is the main intention of the article):
Free trade agreem
1) The law of demand is important to economics because it influences the decisions
of both consumers and producers. Basically, the law of demand says that when all
factors are constant, people buy more of a good when the price goes down and less
of a good
Microeconomics is the study of economic behavior of individuals and businesses make
decisions to distribute limited resources; and it is important in our everyday life because we
make decisions everyday based on the opportunity cost each decision; the mar
1. There are several global benefits of international trade and multinational corporations. One reason
is because it let a country that doesnt have the resources for a product they need or want to be
able to gain it through international trade. Another re
1) Sally will supply three quilts at $500.00 per quilt.
2) No, there are no other factors besides price taken into account with the market
supply schedule she constructed.
3) Below are the situations Sally has encountered in her business and how t
Answer each of the following questions with strong thesis, facts, analysis, details and examples to back
1. How do individuals allocate resources based on opportunity cost and income?
2. How are an individuals monetary decision making effec
1) Gross Domestic Product is an important economic concept to understand because it
helps measure growth in an economy.
1a) Gross Domestic Product is the total dollar value of goods and services
produced in a country for one year. It is an important