The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.

Rina spends all of her money on comic books and beignets. In 2011 she earned $14.00 per hour, the price of a comic book was $7.00, and the price of a beignet was $2.00.

Which of the following give the nominal value of a variable? Check all that apply.

__ Rina's wage is 2 comic books per hour in 2011.

__The price of a beignet is $2.00 in 2011.

__ Rina's wage is $14.00 per hour in 2011.

Which of the following give the real value of a variable? Check all that apply.

__Rina's wage is $14.00 per hour in 2011.

__The price of a comic book is 3.5 beignets in 2011.

__Rina's wage is 7 beignets per hour in 2011.

Suppose that the Fed sharply increases the money supply between 2011 and 2016. In 2016, Rina's wage has risen to $28.00 per hour. The price of a comic book is $14.00 and the price of a beignet is $4.00.

In 2016, the relative price of a comic book is ( 0.29 beignets, 3.5 beignets, $4.00, $14.00)

Between 2011 and 2016, the nominal value of Rina's wage (decreases, increases, remains the same) and the real value of her wage(decreases, increases, remains the same) .

Monetary neutrality is the proposition that a change in the money supply (does not affect, affect) nominal variables and ( does not affect, affect) real variables.

Security a has a higher standard deviation of returns than security b. we would expect that: (i) security a would have a risk premium equal to security b. (ii) the likely range of returns for security a in any given year would be higher than the likely range of returns for security b. (iii) the sharpe ratio of a will be higher than the sharpe ratio of b. (a) i only (b) i and ii only (c) ii and iii only (d) i, ii and iii

Zachary company produces commercial gardening equipment. since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. the costs and cost drivers associated with the four overhead activity cost pools follow: activities unit level batch level product level facility level cost $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? (b) how much overhead is allocated to the cutting shears using activity-based costing? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?

Which of the following constitute the types of unemployment occurring at the natural rate of unemployment? a. frictional and cyclical unemployment. b. structural and frictional unemployment. c. cyclical and structural unemployment. d. frictional, structural, and cyclical unemployment.