As you know, couples usually decide how many children they want to have (x1). since family resources are limited, there is a tradeoff between the quantity of children in a family and consumption of "other goods" (x2). assume a family budget of m, a "price" per children of pi, and a price of other goods" of p2. assume also that parental preferences are described by u(x1x2) = xı x2. assume perfect divisibility of children. a. find the demand functions for x and x2 in terms of m, pi and p2. b. assume m= 14 and pi = p2 = 1. what is the optimal bundle? c. now assume the price of children increases to pı = 3. compute the new optimal bundle. d. what is the (minimum) additional income the couple would need to be able to afford the original optimal bundle (i. e. the one you found in part b)? for simplicity, let's refer to that additional income as am. show clearly how you arrive to your results. e. what would be the optimal bundle if the couple had an income of 14 + am and faced the original prices (pı = p2 = 1)? f. focusing on x1, express the income and substitution effects in terms of your answers to parts b, c and e. g. draw a graph with the three bundles and the corresponding indifference curves and budget lines. carefully label the income and substitution effects.

Eileen's elegant earrings produces pairs of earrings for its mail order catalogue business. each pair is shipped in a separate box. she rents a small room for $150 a week in the downtown business district that serves as her factory. she can hire workers for $275 a week. there are no implicit costs. what is the marginal product of the second worker?

Assume that all of thurmond company’s sales are credit sales. it has been the practice of thurmond company to provide for uncollectible accounts expense at the rate of one-half of one percent of net credit sales. for the year 20x1 the company had net credit sales of $2,021,000 and the allowance for doubtful accounts account had a credit balance, before adjustments, of $630 as of december 31, 20x1. during 20x2, the following selected transactions occurred: jan. 20 the account of h. scott, a deceased customer who owed $325, was determined to be uncollectible and was therefore written off. mar. 16 informed that a. nettles, a customer, had been declared bankrupt. his account for $898 was written off. apr. 23 the $906 account of j. kenney & sons was written off as uncollectible. aug. 3 wrote off as uncollectible the $750 account of clarke company. oct. 20 wrote off as uncollectible the $1,130 account of g. michael associates. oct. 27 received a check for $325 from the estate of h. scott. this amount had been written off on january 20 of the current year. dec. 20 cater company paid $7,000 of the $7,500 it owed thurmond company. since cater company was going out of business, the $500 balance it still owed was deemed uncollectible and written off. required: prepare journal entries for the december 31, 20x1, and the seven 20x2 transactions on the work sheets provided at the back of this unit. then answer questions 8 and 9 on the answer sheet. t-accounts are also provided for your use in answering these questions. 8. which one of the following entries should have been made on december 31, 20x1?

Ummit record company is negotiating with two banks for a $157,000 loan. fidelity bank requires a compensating balance of 24 percent, discounts the loan, and wants to be paid back in four quarterly payments. southwest bank requires a compensating balance of 12 percent, does not discount the loan, but wants to be paid back in 12 monthly installments. the stated rate for both banks is 9 percent. compensating balances will be subtracted from the $157,000 in determining the available funds in part a. a-1. calculate the effective interest rate for fidelity bank and southwest bank. (do not round intermediate calculations. input your answers as a percent rounded to 2 decimal places.) a-2. which loan should summit accept? southwest bank fidelity bank b. recompute the effective cost of interest, assuming that summit ordinarily maintains $37,680 at each bank in deposits that will serve as compensating balances