Problem Set 2 – Strategy I 1. Why do price misreads (or more generally the inability to observe prices with precision) encourage firms to lower prices? [Note: assume all prices are subject to misreads.] Misreads occur when a firm are competing with no information about competitors and assumes that competitors have taken an uncooperative pricing action when in fact they are cooperative. This assumption makes the firm react in an uncooperative manner‚ lowering the price. This asymmetric information
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20-1. The campus pizzeria sells a single pizza for $12. If you order a second pizza‚ however‚ the pizzeria charges a price of only $5 for the additional pizza. Explain how an understanding of marginal utility helps to explain the pizzeria’s pricing strategy. 20-1-A. The pricing method that the pizzeria is using shows they understand how marginal utility works‚ specifically diminishing marginal utility. After hitting the level of satisfaction from the first pizza‚ a second pizza will not be quite
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for Problems and Cases Chapter 1 No check figures Chapter 2 Problem 2-13 Boxes for packaging: variable‚ direct Problem 2-14 Depreciation: fixed‚ manufacturing overhead‚ sunk Problem 2-15 (3) Cloth used: variable‚ direct Problem 2-16 (1) Cost of goods manufactured: $310‚000 Problem 2-17 No check figure Problem 2-18 (1) Cost of goods manufactured: $290‚000 Problem 2-19 (1) Total variable cost: $321‚000 Problem 2-20 Clay and glaze: variable‚ direct materials Problem 2-21
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Homework 1 – Chapter 1 1. In the following independent situations‚ is the tax position of the tax payer likely to change? Explain why or why not. a) Yes‚ this is likely to change John’s tax position because of capital gains and losses on the disposition because of property now convert to ordinary income and losses. b) Yes‚ this is likely to change Theresa’s tax position because now she is self employed and has to deal with the safe harbor of withholdings is lost and new quarterly payments on
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No one knows why there are problems on I-35. How can we fix that? We need to find some way to fix the traffic accidents and other accidents that occur on I-35. In a recent article from KXXV‚ there were accidents along I-35 causing major traffic delays. KXXV also reported that North I-35 was shut down after 18 wheeler crash. According to KXXV‚ “Traffic as being detoured at Industrial Blvd Exit.” There are problems on I-35 that need to be solved. I-35 is dangerous because of slow moving traffic‚ and
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casualty loss deduction the loss must qualify as theft‚ the tax payer must prove the amount of loss due to theft and the taxpayer must also prove the date the theft was discovered. As mentioned in both Robert S. Gerstell‚ 46 T.C. 161 (1966)‚ and Michael Monteleone‚ 34 T.C. 688 (1960)‚ “for tax purposes‚ whether a theft loss has been sustained depends on the law of the jurisdiction wherein the particular loss occurred.” In Keith’s case we are assuming that the state in which he resides in would
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2010 166 Your social security number Alice Johnson 222-23-3334 CAUTION ! To take the making work pay credit‚ you must include your social security number (if filing a joint return‚ the number of either you or your spouse) on your tax return. A social security number does not include an identification number issued by the IRS. Only the Social Security Administration issues social security numbers. You cannot take the making work pay credit if you can be claimed as someone else’s
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1-49 Case Study Problem An audit by the IRS was done on Mr. John Gemstone‚ a wealthy client. A few deductions were questioned‚ such as; $10‚000 loss on beach rental‚ $20‚000 charitable contribution‚ $15‚000 loss for operation of cattle breeding ranch. There was a concern that the battle breeding ranch is not a legitimate business‚ which is more like a hobby. My supervisor was asked that I represent Mr. Gemstone in his discussions with the IRS. In order to get elaborate more on Mr. Gemstones deductions
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PROBLEM SET # 1 Instructions: 1) Open book‚ open notes limited to only class materials. 2) Unlimited time. 3) This must be reflective of your individual effort. GMU Honor Code applies. 4) The Problem Set #1 (only the question solutions portion) is due at the end of the day on September 24th. 5) Show all work‚ as partial credit will be given for each question’s answer. Organize your work so it is easy to follow. You can use word‚ power point‚ excel or combinations
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CACL 2014 Case studies and problem sets Problem Set 1 The following problems and questions should be answered after you have read Chapters 1 and 2. 1. GML is a public company. Its shares are listed for quotation on the ASX. What does it mean to say that a company is listed? Are all public companies listed on the ASX? See [¶1-120]‚ [¶1-140] and key terms [¶1-500] If a public company is listed on the ASX‚ members of the public can buy and sell securities (such as shares) issued by the company
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