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Brief Discussion Questions
a) Why is accounting considered a language of business? How is it related to management
process?
b) Discuss about the four basic financial statement (income statement, statement of owners’
equity, balance sheet, and statement of cash flows); comparing and contrasting their
differences in merchandising firms Vs. service providing entities
c) Discuss about the four finance functions (financial management decisions)
Consider a competitive market for which the quantities demanded and supplied (per year) at various prices are given as follows:
P Q S
60 22 14
80 20 16
100 18 18
120 16 20
a. Calculate the price elasticity of demand when the price is $80.
b. Calculate the price elasticity of supply when the price is $100.
c. What are the equilibrium price and quantity?
d. Suppose the government sets a price ceiling of $80. Will there be a shortage, and if so, how large will
it be?
A company sells q ribbon winders per year at $p per ribbon winder. The demand function for ribbon winders is given by p=300−0.02q. Find the elasticity of demand when the price is $70 apiece. Will an increase in price lead to an increase in revenue?
10 examples of positive and normative statements
P($) Q
70 2800
60 3000
Calculate Price Elasticity of Demand using Mid-Point Method.
When inflation gets very high, people do not like to hold money because it is losing value
quickly. Therefore, they spend it faster.
When the money supply is doubled, if people spend money more quickly, what happens to
prices? Do prices more than double, less than double, or exactly double? Explain using the
Quantity Theory of Money
Currently, we Ethiopian faced a problem of war in some part of Ethiopia such as State of Amhara, State of Afar and Tigray. This problem caused low production, output, high unemployment rate, low aggregate demand. The macroeconomics has considered the state of macroeconomics, the philosophies that have been most important in the 21th century. Given the situation, what would a state of macro economics recommend be done? And as off you what would be done?
With fixed cost of ksh 400,000 a firm has an average total cost of ksh 3000 and average variable cost of ksh 2500 find it's output
A marketing research conducted by firm company result shows the firms production function and its demand as the following equation. And the demand function is given by 100. Using the given information answer the following question.
If you are this firms manager how are you suggest your firms owner to add the input x in order to be at maximum average production? Support your suggestion with evidence from the production function given
2) Consider the following hypothesis test:
H 0 : μ = 16
H a : μ ≠ 16
A sample of 50 provided a sample mean of 15.15. The population standard deviation is 3.
a) Compute the value of the test statistic.
b) What is the p-value?
c) Write the rejection rule using the p-value. Using α = 0.05, what is your conclusion?
d) Write the rejection rule using the critical value. What is your conclusion?
