PREFERENCES AND UTILITY
Axioms of Rational Choice
 Completeness
lfA and B are any two situations, an
individual can always specify exactly one of
these possibilities:
 A is preferred to B
 B is preferred to A
. A and B are equally attractive Axioms of
MARKET DEMAND AND
ELASTICITY
Market Demand Curves
 Assume that there are only two goods
(X and Y) and two individuals (1 and 2)
The first person s demand forX is
X1: dx1(P)oPY:I1) @
The second person s demand forX is
X2 = dx2(PX:PY:I2) Market Demand Cu
Efciency in Exchange
Introduction:
 Efciency in Exchange: Pareto
Optimality Condition
 An allocation is already Pareto
Optimal ifwe can no longer
reallocate the goods to make one
person betteroff, without making one
person worseoff. Introduction:
 A
 Assume that the individual 5 MRS = 1
(Q: interpret the MRS)
 Assume: the price ofX = Php2 and the
price ofy = Php1
 The individual can be made better off
trade 1 unit ofX for 2 units of y in the
marketplace
The individual can afford
to choose onl
THE MATHEMATICS OF
OPTIMIZATION
The Mathematics of Optimization
 Many economic theories begin with the
assumption that an economic agent is
seeking to nd the optimal value of some
function
 This chapter introduces the mathematics
common to these problem
Gross Substitutes
In this case, we call Xand Y gross
substitutes
U
Quantity of Good Y
aX/aPY > o
Quantity of Good X
A Mathematical Treatment
 The change in X caused by changes in Py
can be shown by a SIutskytype equation
aPy aPy R,
U: con Santal

MODELS OF MONOPOLY
Monopoly
 A monopoly is a single supplier to a
market
 This rm may choose to produce at any
point on the market demand curve
Barriers to Entry
 The reason a monopoly exists is that
other rms nd it unprotable or
impossible to enter t
PRODUCTION FUNCTIONS
Introd uction:
Indifference Curve Isoquant
Budget Line lsocost
Marginal Rate of Substitution Marginal Rate of Technical Substitution
Utility Max Cost Min
Optimization : Slope of IC = Slope of BL Optimization: Slope of lsoquant = Slope
ECON 202 Macroeconomics
Solutions to Homework3
1.) Solve Problem 1 in page 82 in the main textbook.
a) Equilibrium level of income is reached when Y = AE and since AE = C + I when
there is no govrnment sector, then:
AE = C + I = 100 + 0.8Y + 50 = 150 + 0
Errata Sheet for Introduction to Management Science, 8th Edition, Taylor
Solutions Manual Corrections:
Chapter 1, page 2, problem 21 the formula for volume should be
v = (60,000 + 8,000)/(400 75), and thus v = 209.2 teams, instead of v = 160 teams.
Chapte
Lukes
The Bennet Company purchase one of its essential raw materials from three suppliers. Bennets current
policy is to distribute purchase equally among the three. The owners son, Benjamin Bennet, just
graduated from a business college. He proposes that
Homework on Operations Improvement
Problem 1: Oregon fiber board makes roof liners for the automotive industry. The manufacturing manager
is concerned about product quality. She suspects that one particular failure, tears in the fabric, is related to
prod
StandardCostsandVarianceAnalysis
STANDARD COSTS AND VARIANCE ANALYSIS
A.
B.
C.
D.
THEORIES:
Standard cost system
1. A primary purpose of using a standard cost system is
A. To make things easier for managers in the production facility.
B. To provide a dist
Student Name:
Class:
Problem 1011
COTTONWOOD HEALTH CLINIC
Materials Price and Quantity Variance
Actual
quantity
Actual
price
Standard
quantity
Standard
price
Actual qty.
@ actual price
Actual qty.
@ std. price
Standard
qty.
@ std. price
Actual hours
@ s
Distinguish between job costing and process costing
Process costing:
Weighted average versus FIFO
How to calculate equivalent units
How to calculate cost per equivalent units
How to calculate cost in ending work in process inventory and transferred out
Co
Student Name:
Class:
Problem 415A
BRADY PRODUCTS
Cooking Department Production Report
1. Equivalent Units of Production
Materials
Conversion
Materials
Conversion
Transferred to next department
Ending work in process:
Materials
Conversion
Equivalent units
Chapter 11 Flexible Budgets and Overhead Analysis
True/False Questions 1. A key feature of a flexible budget is that actual results can be compared to budgeted costs at the same level of activity. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Th
Problem 1014 (60 minutes)
1. Total standard cost for units produced during August:
500 kits $42 per kit.
Less standard cost of labor and overhead:
Direct labor.
Variable manufacturing overhead.
Standard cost of materials used during August.
2. Standard c
Accounting for a Merchandising Business Organized as
a Partnership  Chapter 17
Financial Statements for a Partnership
Seth and Steve used the general ledger account balances to transfer to the worksheet, which
showed that the business had a net income.
CHAPTER 4
JOB COSTING
4.16
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
(10 min)
Job order costing, process costing.
Job costing
Process costing
Job costing
Process costing
Job costing
Process costing
Job costing
Job costing (but some process costing)
Process costing
4.19
Quantity Schedule and Equivalent Units
Quantity
Schedule
Units to be accounted for:
Work in process, June 1
(materials 70% complete,
conversion 40% complete)
Started into production
Total units to be accounted for
70,000
460,000
530,000
Equivalent Un
Before the labor variances can be computed, the actual direct
labor cost for the month must be computed:
Actual cost per kit produced ($42.00 +
$0.14).
$42.14
Number of kits produced.
500
Total actual cost of production.
$21,070
Less: Actual cost of mater
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C H A P T E R
F O U R
Systems Design:
Process Costing
A LOOK BACK
We described a basic joborder
costing system in Chapter 2 that
used a single plantwide overhead
rate. Then, in Chapter 3, we
looked at activit
Confirming Pages
Chapter
Process Costing
4
B U SI NE SS FOCU S
Costing the QuickerPickerUpper
If you have ever spilled milk, there is a good
chance that you used Bounty paper towels to
clean up the mess. Procter & Gamble (P&G)
manufactures Bounty in two
Value of Information
in Decision Trees
19
19.1 VALUE OF INFORMATION
Useful concept for
Evaluating potential informationgathering activities
Comparing importance of multiple uncertainties
19.2 EXPECTED VALUE OF PERFECT INFORMATION
Several computational me
SESUG 2012
Paper SD04
DecisionMaking using the Analytic Hierarchy Process (AHP) and SAS/IML
Melvin Alexander, Social Security Administration, Baltimore, MD
ABSTRACT
SAS/IML can be used to implement the Analytic Hierarchy Process (AHP). AHP helps decisio