Jamal consumes only two goods: lollipops and chewing gum. He treats these two goods as perfect substitutes, with one lollipop being a perfect substitute for a pack of chewing gum. Initially, the price of a lollipop is $1.15, while packs of chewing gum are $2.88 each. Jamal has $20 per week to spend on these two goods. Suppose the price of chewing gum decreases to $1.72. Required:
a. What is the substitution effect associated with the change in the price of chewing gum?
b. What is the income effect associated with the change in the price of chewing gum?

Cooper, cpa, is auditing the financial statements of a small rural municipality. the receivable balances represent residents’ delinquent real estate taxes. internal control at the municipality is weak. to determine the existence of the accounts receivable balances at the balance sheet date, cooper would most likely: cooper, cpa, is auditing the financial statements of a small rural municipality. the receivable balances represent residents’ delinquent real estate taxes. internal control at the municipality is weak. to determine the existence of the accounts receivable balances at the balance sheet date, cooper would most likely:

Mikkelson corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%. then an increase in investor risk aversion caused the market risk premium to rise by 2%. the risk-free rate and the firm's beta remain unchanged. what is the company's new required rate of return? (hint: first calculate the beta, then find the required return.) do not round your intermediate calculations.

Which of the following statements is (are) true? i. free entry to a perfectly competitive industry results in the industry's firms earning zero economic profit in the long run, except for the most efficient producers, who may earn economic rent. ii. in a perfectly competitive market, long-run equilibrium is characterized by lmc < p < latc. iii. if a competitive industry is in long-run equilibrium, a decrease in demand causes firms to earn negative profit because the market price will fall below average total cost.