The t-shirt industry in Happy Valley consists of ten manufacturers. Each can hire zero, one, or two workers. If a manufacturer hires zero workers, it has no revenue. If it hires one worker, its revenue after deducting the cost of materials (but not the wage of workers) is $200 per day. If it hires two workers, this net revenue is $300 per day. There are 15 residents of Happy Valley who have a reservation wage of $80 per day, and there are 10 more residents who have a reservation wage $130 per day. No one else is willing to work in this industry. How would the introduction of minimum wage of $120 per day affect total worker income (include both employed and unemployed workers) compared to the situation with no minimum wage? 

a. It would increase total worker income by $100 

b. It would increase total worker income by $150

c. It would decrease total worker income by $100 

d. No change

e.     We cannot answer this question because we do not know which workers (high       reservation wage or low reservation wage) will be employed at the new minimum wage. 

I’m studying for my Management class and need an explanation.

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1. The Classical Theory of Asset Prices assumes which of the following ideas?

A. The interest rate to use is the nominal rate, assets are the discounted sum of their future values, and expected income is the best information available.

B. Actual past income is the best information available, assets are the discounted sum of their future values, and the interest rate is the safe interest rate plus a risk premium.

C. The value of an asset is the discounted present value of expected cash flows, expected income is the best information available, and the interest rate is the safe interest rate plus a risk premium.

D. The interest rate to use is the real rate, expected income is the best information available, and the assets are the discounted sum of their future values.

2. Economists use two principle interest rates: nominal and real. The purpose of this distinction is to

A. use nominal interest rates during periods when the economy is growing and real interest rates during economic down turns

B. adjust for the influences that inflation may have on business profits

C. account for and factor the influences that inflation may have on the behavior that consumers and firms use to determine how much to save out of their incomes

3. During periods of increasing inflationary pressure, the Federal Reserve should

A. buy member bank’s bonds to encourage increased lending to the public

B. sell bonds to member banks to discourage lending to the public

C. reduce the discount rate to make it easier for small businesses to borrow money

4. What is the increased moral hazard associated with the too big to fail (TBTF) bailouts of the largest of financial institutions?

A. Financial institutions might misuse the bailout funds and continue the same practices that lead to the original failure.

B. Depositors will lose their deposits.

C. Employees of the financial institutions will lose their jobs.

5. The Federal Reserves’ primary tool for managing the money flow is

A. discount rate

B. reserve ratio

C. open-market operations

D. term auction facility

6. Which of the following is a major drawback of a flexible exchange rate?

A. Government intervention in the form of reserves

B. Use of exchange controls

C. Discouraging the flow of trade due to risks and uncertainties

7. The major advantage to a flexible exchange-rate policy is

A. automatic adjustments to balance of payments

B. relative interest rates between countries are automatically adjusted

C. increased foreign investment

D. increased overall wealth

8._____________suggests that a country will engage in trade and export products that it can produce at a lower-opportunity cost than a competing nation.

A. Comparative advantage

B. Absolute advantage

C. Arbitrage

D. Heckscher-Ohlin theory

9. Absolute advantage encourages a country to

A. enact protective tariffs

B. specialize and trade with other countries

C. export the technology that gives it an absolute advantage

10. The _____________________ explains that long-run trends in exchange rates are based on a predictable relationship between product price levels and exchange rates.

A. monetary approach to exchange rates

B. asset market approach to exchange rates

C. purchasing power parity

11. A business traveler to Germany who, upon deplaning in Berlin, uses an airport ATM to withdraw 100 Euros from her U.S. bank would receive which kind of exchange rate?

A. Spot

B. Forward

C. Fixed

D. Flexible

12. Suppose Nation A can produce 2 million pounds of sugar per week OR 1 million pounds of rice in a week and Nation B can produce 10 million pounds of sugar per week OR 3 million pounds of rice in a week. If this is a two-good, two nation model, what would Nation Bâs best choice in regards to trade and specialization?

A. Nation B should produce both rice and sugar.

B. Nation B should produce only sugar and trade for rice.

C. Nation B should produce sugar, produce rice, and trade some sugar for rice.

D. Nation B should produce sugar, produce rice, and trade some rice for sugar.

MBAA 523 Problem Set 4 

Revised 3/14

1.       Define the short-run and long-run and provide an aviation example.

2.       In the short-run, Airbus manufactures aircraft at its existing factories; however, labor and other inputs such as those components purchased from suppliers (engines are one example) are variable.  Airbus has received a substantial number of new orders and will increase its monthly aircraft production rate.  Explain why the MPL will decrease above some level of labor as more workers are added.  How does this decrease in MPL result in an increase in MC? 

3.       The table shows the marginal product of labor for a manufacturing firm in the short-run.  The cost of an additional worker is $100 per day including benefits.  The product sells for $2 per unit.  Compute the value of the marginal product of labor.  How many workers will the firm hire? 

4.       NEW DELHI — Each fall at harvest time, Leela Dhar Rajput used to hire 25 farm hands to work from dawn to dusk every day for a week bringing in the rice crop on his 20 acres of land in the central Indian state of Madhya Pradesh.  This year, he plans to use a combine harvester instead. With the machine and the help of two or three men, he expects to finish the job in a single day.  Indian agriculture is belatedly engaged in a mechanical revolution, boosting productivity in a sector that has long relied on cheap, surplus labor to tend crops in the world’s second most populous country.  Job opportunities in factories and services, plus the government’s rural job-creation program guaranteeing 100 days of employment a year on public-works projects, have drained the pool of workers in villages. “I just can’t find enough people to do the hard work in the fields anymore,” says Mr. Rajput.  [Mukherji, B. (2013, October 29).  India’s Farmers Mechanize.  WSJ, B8.]

Show and label the amount of capital (K) and labor (L) employed with the displayed isocost line and then insert a new isocost reflecting a substantial increase in the price of labor.  Mr. Rajput intends to harvest the same quantity of rice as last year.  Show and explain the effect on the K and L employed. 

5.       Complete the table (the easiest method is to do the computation in MS Excel).  Create a line graph of AFC, AVC, ATC, and MC (in Excel, select the 4 columns, then Insert/Line, and choose the first graph option).  Explain the reason for the shape of each curve.   The completed table and graph can be copied and pasted into this document.  Hint:  Be certain that your line graph looks similar to those in Baye (your graph will not be as smooth as in Baye).  If not, there is likely an error in your computations.

6.       Define economies of scale.  Is there evidence of economies of scale in the airline industry?  (Hint:  Consider Low-Cost-Carriers).  In large commercial aircraft manufacturing? 

Security professionals need to understand that compliance, along with strong security policies, can make organizational security stronger, but not completely hacker-proof.

In 500-750 words, explain how compliance with governing standards can fail to provide security even when using the Diamond Model of Intrusion Analysis or Cyber Kill Chain model. Where does the use of the model’s tools (e.g., relating to HIPAA, DOD, etc.) still make an organization vulnerable even though the organization is compliant with industry regulations and standards?

Prepare this assignment according to the guidelines found in the APA Style Guide

This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.

Security professionals need to understand that compliance, along with strong security policies, can make organizational security stronger, but not completely hacker-proof.

In 500-750 words, explain how compliance with governing standards can fail to provide security even when using the Diamond Model of Intrusion Analysis or Cyber Kill Chain model. Where does the use of the model’s tools (e.g., relating to HIPAA, DOD, etc.) still make an organization vulnerable even though the organization is compliant with industry regulations and standards?

Prepare this assignment according to the guidelines found in the APA Style Guide

This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.