Question: What have been the major causes of

> When is a receivable recognized for property tax assessments? When is the revenue recognized?

> What are the four classifications of nonexchange revenues that a state or local government can recognize?In each case, when are revenues normally recognized?

> What are the two different ways that supplies and prepaid items can be recorded on fund financialstatements?

> What provisions in a partnership agreement can be used to establish an equitable allocation ofincome among all partners?

> How do governmental funds report capital outlay in fund financial statements? How dogovernment-wide financial statements report capital expenditures?

> What costs necessitate the reporting of an expenditure by a governmental fund?

> When is an encumbrance recorded? What happens to this balance? How are encumbrances reportedin government-wide financial statements?

> How are budget results shown in the financial reporting of a state or local government?

> Why are budgetary entries recorded in the individual funds of a state or local government?

> The general fund of a city reports assets of $300,000 and liabilities of $200,000 in the fund financialstatements. Explain what is meant by each of the following balances: fund balance—nonspendableof $40,000, fund balance—restricted of $28,000, fund bala

> What are the two major divisions reported in government-wide financial statements? What fundsare not reported in these financial statements?

> What are the four fund types within the fiduciary funds? What types of events does each report?

> What are the two fund types within the proprietary funds? What types of events does each report?

> Go to the website www.napico.com and click on “Partnership Financial Information—Click Here.”Then click on “2015 Annual Reports” to access the Form 10-K annual report for Real Estate AssociatesLimited II (Real II). Read the financial statements contained

> At what point in the accounting process does the allocation of partnership income becomesignificant?

> What are the advantages of operating a business as a partnership rather than as a corporation? Whatare the disadvantages?

> Are the subgames of a sequential game visible when the entire game is presented in strategic form? Explain.

> Do you think that IACs such as the United States should open their doors wider to the immigration of low-skilled DVC workers as a way to help the DVCs develop? Do you think that it is appropriate for students from DVC nations to stay in IAC nations to wo

> Draw a domestic supply-and-demand diagram for a product in which the United States does not have a comparative advantage. What impact do foreign imports have on domestic price and quantity? On your diagram show a protective tariff that eliminates approxi

> What form does trade adjustment assistance take in the United States? How does such assistance promote political support for free trade agreements? Do you think workers who lose their jobs because of changes in trade laws deserve special treatment relati

> What is the rationale for exempting a firm’s contribution to its workers’ health insurance from taxation as worker income? What is the impact of this exemption on allocative efficiency in the health care industry?

> The labor demand and supply data in the following table relate to a single occupation. Use them to answer the questions that follow. Base your answers on the taste-for-discrimination model. a. Plot the labor demand and supply curves for Hispanic worker

> What was the major intent of the Freedom to Farm Act of 1996? Do you agree with the intent? Why or why not? Did the law succeed in reducing overall farm subsidies? Why or why not?

> Use economic analysis to explain why the optimal amount of product safety may be less than the amount that would totally eliminate risks of accidents and deaths. Use automobiles as an example.

> Is it possible for a country with a regressive tax system to have a tax-spending system that transfers resources from the rich to the poor?

> The figure in the Last Word section shows that a 10-fold increase in a country’s GDP per person is associated with about a 20-point increase in EPI. On the other hand, GDP per person was $48,112 in the United States in 2011 but $83,383 in Switzerland des

> Explain why the U.S. demand for Mexican pesos is downsloping and the supply of pesos to Americans is upsloping. Assuming a system of flexible exchange rates between Mexico and the United States, indicate whether each of the following would cause the Mexi

> Alpha’s balance-of-payments data for 2016 are shown below. All figures are in billions of dollars. What are the a. Balance on goods b. Balance on goods and services c. Balance on current account d. Balance on capital and financial acco

> What are the combined rent, interest, and profit share of the income earned by Americans in a typical year if proprietors’ income is included within the labor (wage) share?

> Suppose you are playing a game in which you and one other person each picks a number between 1 and 100, with the person closest to some randomly selected number between 1 and 100 winning the jackpot. (Ask your instructor to fund the jackpot.) Your oppone

> Do you favor debt forgiveness to all DVCs, just the poorest ones, or none at all? What incentive problem might debt relief create? Would you be willing to pay $20 a year more in personal income taxes for debt forgiveness? How about $200? How about $2000?

> Suppose Super D’Hiver—a hypothetical French snowboard retailer—wants to order 5000 snowboards made in the United States. The price per board is $200, the present exchange rate is 1 euro = $1, and payment is due in dollars when the boards are delivered in

> Suppose that if Iceland and Japan were both closed economies, the domestic price of fish would be $100 per ton in Iceland and $90 per ton in Japan. If the two countries decided to open up to international trade with each other, which of the following cou

> Identify and state the significance of each of the following trade-related entities: a. The WTO b. The EU c. The Euro Zone d. NAFTA.

> What was the single most important reason for the decline in illegal immigration between 2007 and 2009? What other factors were at play? Going forward, why might people think it more likely that illegal immigration will fall rather than rise?

> How is the moral hazard problem relevant to the health care market?

> What are the essential differences between social insurance and public assistance programs? Why is Medicare a social insurance program whereas Medicaid is a public assistance program? Why is the earned-income tax credit considered to be a public assistan

> We see quite a bit of international trade in the real world. And trade is driven by specialization. So why don’t we see full specialization—for instance, all cars in the world being made in South Korea, or all the mobile phones in the world being made in

> Use public choice theory to explain the persistence of farm subsidies in the face of major criticisms of those subsidies. If the special-interest effect is so strong, what factors made it possible in 1996 for the government to end price supports and acre

> Do all international financial transactions necessarily involve exchanging one nation’s distinct currency for another? Explain. Could a nation that neither imports goods and services nor exports goods and services still engage in international financial

> How does social regulation differ from industrial regulation? What types of benefits and costs are associated with social regulation?

> Suppose the equation for the demand curve for some product X is P = 8 - .6Q and the supply curve is P = 2 + .4Q. What are the equilibrium price and quantity? Now suppose an excise tax is imposed on X such that the new supply equation is P = 4 + .4Q. How

> Aquaculture is the growing of fish, shrimp, and other seafood in enclosed cages or ponds. The cages and ponds not only keep the seafood from swimming away but also provide aquaculturalists with strong property rights over their animals. Does this provide

> Why is the distinction between insurable and uninsurable risks significant for the theory of profit? Carefully evaluate: “All economic profit can be traced to either uncertainty or the desire to avoid it.” What are the major functions of economic profit?

> How could spending less on Social Security now lead to an ability to increase Social Security in the future?  Why don't businesses devote more of their R&D spending toward basic scientific research?

> Refer to the payoff matrix below. Assuming this is a sequential game with no collusion, what is the outcome if Firm A moves first to build a new type of commercial aircraft? Explain why first-mover strategies in the real-world are only as good as the

> What types of products do the DVCs typically export? How do those exports relate to the law of comparative advantage? How do tariffs by IACs reduce the standard of living of DVCs?

> Other things equal, if the United States continually runs trade deficits, foreigners will own ________ U.S. assets. a. More and more. b. Less and less. c. The same amount of.

> The potentially valid arguments for tariff protection—military self-sufficiency, infant industry protection, and diversification for stability—are also the most easily abused.” Why are these arguments susceptible to abuse?

> Suppose that the current international price of wheat is $6 per bushel and that the United States is currently exporting 30 million bushels per year. If the United States suddenly became a closed economy with respect to wheat, would the domestic price of

> In Country A, a worker can make 5 bicycles per hour. In Country B, a worker can make 7 bicycles per hour. Which country has an absolute advantage in making bicycles? a. Country A. b. Country B.

> True or false. In the United States, unions have been gaining in membership and power for several decades.

> How might protective tariffs reduce both the imports and the exports of the nation that levies tariffs? In what way do foreign firms that “dump” their products onto the U.S. market in effect provide bargains to American consumers? How might the import co

> If someone favors the free movement of labor within the United States, is it inconsistent for that person to also favor restrictions on the international movement of labor? Why or why not?

> Explain how health care insurance results in an over allocation of resources to the health care industry. Use a demand and supply diagram to specify the resulting efficiency loss.

> How do government statisticians determine the poverty rate? How could the poverty rate fall while the number of people in poverty rises? Which group in each of the following pairs has the higher poverty rate: (a) children or people age 65 or over? (b) Af

> What are the effects of farm subsidies such as those of the United States and the European Union on (a) domestic-agricultural prices, (b) world agricultural prices, and (c) the international allocation of agricultural resources?

> In view of the problems involved in regulating natural monopolies, compare socially optimal (marginal-cost) pricing and fair-return pricing by referring again to Figure 12.9. Assuming that a government subsidy might be used to cover any loss resulting fr

> True or False. The MB = MC level of immigration is likely to be achieved if we simply let in every person who wishes to immigrate to the United States.

> Given the inelasticity of cigarette demand, discuss an excise tax on cigarettes in terms of efficiency loss and tax incidence.

> Various cultures have come up with their own methods to limit catch size and prevent fishery collapse. In old Hawaii, certain fishing grounds near shore could be used only by certain individuals. And among lobstermen in Maine, strict territorial rights a

> How do the concepts of accounting profit and economic profit differ? Why is economic profit smaller than accounting profit? What are the three basic sources of economic profit? Classify each of the following according to those sources: a. A firm’s profi

> Speculate as to why we see unnecessary occupational licensing only in some industries but not others. Consider both costs and benefits, who gets them, and how hard it would be to organize opposition to unnecessary licensing in various industries.

> Assume that the comparative-cost ratios of two products—baby formula and tuna fish—are as follows in the nations of Canswicki and Tunata: Canswicki: 1 can baby formula ≡ 2 cans tuna fish Tunata: 1 can baby formula ≡ 4 cans tuna fish In what product shoul

> Evaluate: “Society does not need laws outlawing monopolization and monopoly. Inevitably, monopoly causes its own self-destruction since its high profit is the lure for other firms or entrepreneurs to develop substitute products.”

> Look back at Figure 14.8. Suppose that the two firms switch places—the firm that was the follower now gets to go first while the firm that was the leader now has to go second. The new subgame perfect Nash equilibrium will lead to terminal node: a. A. b.

> Refer to the payoff matrix in question 8 at the end of this chapter. First, assume this is a one-time game. Explain how the $60/$57 outcome might be achieved through a credible threat. Next, assume this is a repeated game (rather than a one-time game) an

> Why do you think there is so much government corruption in some developing countries?

> If the economy booms in the United States while going into recession in other countries, the U.S. trade deficit will tend to ______. a. Increase. b. Decrease. c. Remain the same.

> In July 2007 The Wall Street Journal (WSJ) reported that a growing shortage of skilled labor in Eastern European countries such as Slovakia was driving up wages in key industries and reducing business income. The reason for the shortages was a large migr

> Would it be accurate to think of a fixed exchange rate as a simultaneous price ceiling and price floor?

> True or False: If a country is open to international trade, the domestic price for a homogeneous good can differ from the international price for the same good.

> In 2013, manufacturing workers in the United States earned average compensation of $36.34 per hour. That same year, manufacturing workers in Mexico earned average compensation of $6.82 per hour. How can U.S. manufacturers possibly compete? Why isn’t all

> Why are so many state and local governments greatly concerned about the federal government’s allegedly lax enforcement of the immigration laws and Congressional proposals to grant legal status (amnesty) to the 11.3 million illegal immigrants in the Unite

> How do advances in medical technology and health insurance interact to drive up the cost of medical care?

> Quantitatively, how important is international trade to the United States relative to the importance of trade to other nations? What country is the United States’ most important trading partner, quantitatively? With what country does the United States ha

> Comment on or explain: a. Endowing everyone with equal income will make for very unequal enjoyment and satisfaction. b. Equality is a “superior good”; the richer we become, the more of it we can afford. c. The mob goes in search of bread, and the means

> Do you agree with each of the following statements? Explain why or why not. a. The problem with U.S. agriculture is that there are too many farmers. That is not the fault of farmers but the fault of government programs. b. The Federal government ought to

> What types of industries, if any, should be subjected to industrial regulation? What specific problems does industrial regulation entail?

> What is the tax incidence of an excise tax when demand is highly inelastic? Highly elastic? What effect does the elasticity of supply have on the incidence of an excise tax? What is the efficiency loss of a tax, and how does it relate to elasticity of de

> True or False. Under the PPACA, Americans are free to decide for themselves whether or not they should have health insurance coverage.

> User cost is equal to the present-value of future profits in the model presented in Figure 19.7. Will the optimal quantity to mine in the present year increase or decrease if the market rate of interest rises? Does your result make any intuitive sense? (

> Historically, usury laws that put below-equilibrium ceilings on interest rates have been used by some states to make credit available to poor people who could not otherwise afford to borrow. Critics contend that poor people are those most likely to be hu

> What is the principal-agent problem? Have you ever worked in a setting where this problem has arisen? If so, do you think increased monitoring would have eliminated the problem? Why don’t firms simply hire more supervisors to eliminate shirking?

> Make a case that neither pure competition nor pure monopoly is conducive to a great deal of R&D spending and innovation. Why might oligopoly be more favorable to R&D spending and innovation than either pure competition or pure monopoly? What is the inver

> Look back at Figure 14.7. Suppose that the payouts at terminal node B change to (13,12) while everything else in the game stays the same. The new subgame perfect Nash equilibrium will consist of the two line segments: a. Build at BB followed by Build at

> Is the game shown by Figure 14.1 a zero-sum game or is it a positive-sum game? How can you tell? Are there dominant strategies in this game? If so, what are they? What cell represents a Nash equilibrium and why? Explain why it is so difficult for Uptown

> Each year, the number of legal immigrants to the United States is ___________ the number of illegal immigrants. a. Less than. b. Equal to. c. Greater than. d. Less than, but only in most years, not every year.

> True or False:  Some economists argue that the single best thing that IACs could do for DVCs in terms of economic growth would be to eliminate trade barriers between IACs and DVCs.

> Do you think that the nature of the problems the DVCs face requires a government-directed or a private-sector directed development process? Explain your reasoning.

> Suppose that a country follows a managed-float policy but that its exchange rate is currently floating freely. In addition, suppose that it has a massive current account deficit. Other things equal, are its official reserves increasing, decreasing, or st

> What are the estimated income and price elasticities of demand for health care? How does each relate to rising health care costs?

> Explain why you agree or disagree with the following statements: a. A country that grows faster than its major trading partners can expect the international value of its currency to depreciate. b. A nation whose interest rate is rising more rapidly than

> Which of the following are benefits of international trade? Choose one or more answers from the choices shown. a. A more efficient allocation of resources. b. A higher level of material well-being. c. Gains from specialization. d. Promoting competition.

> Evaluate the effectiveness of artificial trade barriers, such as tariffs and import quotas, as a way to achieve and maintain full employment throughout the U.S. economy. How might such policies reduce unemployment in one U.S. industry but increase it in

> Why is each of these statements somewhat misleading? a. “Illegal immigrants take only jobs that no American wants.” b. “Deporting 100,000 illegal immigrants would create 100,000 job openings for Americans.”

> Briefly discuss the demand and supply factors that contribute to rising health costs. Specify how a. Asymmetric information b. Fee-for-service payments c. Defensive medicine d. Medical ethics might cause health care costs to rise.

> Do you agree or disagree? Explain your reasoning. “There need be no trade-off between equality and efficiency. An ‘efficient’ economy that yields an income distribution that many regard as unfair may cause those with meager incomes to become discouraged

> Explain the economic effects of price supports. Explicitly include environmental and global impacts in your answer. On what grounds do economists contend that price supports cause a misallocation of resources?

> Mexico has daily (rather than hourly) minimum wage laws. In 2016, the daily minimum wage in Mexico was about 73 pesos per day, and the exchange rate between Mexican pesos and U.S. dollars was about 17 pesos per dollar. a. In 2016, what was the Mexican m