According to data from the u. s. department of agriculture’s national agricultural statistics
service, 124 million acres of land in the united states were used for wheat or corn farming in 2004. of
those 124 million acres, farmers used 50 million acres to grow 2.158 billion bushels of wheat and 74
million acres of land to grow 11.807 billion bushels of corn. suppose that u. s. wheat and corn farming
is efficient in production. at that production point, the opportunity cost of producing one additional
bushel of wheat is 1.7 fewer bushels of corn. however, farmers have increasing opportunity costs, so
that additional bushels of wheat have an opportunity cost greater than 1.7 bushels of corn. for each of
the following production points, decide whether that
production point is (i) feasible and efficient in production, (ii)
feasible but not efficient in production, (iii) not feasible,
or (iv) unclear as to whether or not it is feasible.
a. farmers use 40 million acres of land to produce 1.8 billion bushels of wheat, and they use 60 million
acres of land to produce 9 billion bushels of corn. the remaining 24 million acres are left unused.
b. from their original production point, farmers transfer 40 million acres of land from corn to wheat
production. they now produce 3.158 billion bushels of wheat and 10.107 bushels of corn.
c. farmers reduce their production of wheat to 2 billion bushels and increase their production of corn to
12.044 billion bushels. along the production possibility frontier, the opportunity cost of going from
11.807 billion bushels of corn to 12.044 billion bushels of corn is 0.666 bushel of wheat per bushel of
corn.

Problem 9-5. net present value and taxes [lo 1, 2] penguin productions is evaluating a film project. the president of penguin estimates that the film will cost $20,000,000 to produce. in its first year, the film is expected to generate $16,500,000 in net revenue, after which the film will be released to video. video is expected to generate $10,000,000 in net revenue in its first year, $2,500,000 in its second year, and $1,000,000 in its third year. for tax purposes, amortization of the cost of the film will be $12,000,000 in year 1 and $8,000,000 in year 2. the company’s tax rate is 35 percent, and the company requires a 12 percent rate of return on its films. required what is the net present value of the film project? to simplify, assume that all outlays to produce the film occur at time 0. should the company produce the film?

Fred smithers, a recent college graduate decided to open his own portable juice bar, smithers smoothies, to wheel around newport beach. you, a trusted friend of fred, are a business major that has also recently graduated and agreed to handle the books for a while to get some practical experience and have a favor that you can ask of fred in the future. given the following five transactions concerning the new venture, prepare the necessary journal entries for the transactions, post the journal entries to appropriate t accounts and prepare a trial balance as of the end of the month in order to answer to the necessary may 2: fred invests $12,000 of his own money to start the new company. this money was obtained from a part-time job working at a legal firm while he was in school. may 3: fred spent $5,100 cash to purchase a refrigerated trailer that he can pull behind his car and set up at the beach. under your advice, fred agrees to place the new asset under an account called "equipment." may 6: fred bought $640 of supplies on account from the flav-o-rite confectioners company. because they will last longer than a single accounting period fred agrees to record them as, "supplies" as per your suggestion. may 13: fred sat on the beach for six hours without a single sale and was feeling very down. right before he left, however, a plumber escorting his family reunion along the beach stopped by his stand and bought $800 worth of smoothies for the entire family. under your advice, fred agrees to call this cash revenue, "sales." may 15: excited about his new venture, fred withdraws $350 from the company to take his girlfriend out to dinner. what would be the balance in the cash account at the end of the period following the posting of all the transactions?

When used-car dealers signal the quality of a used car with a warranty, a. buyers believe the signal because the cost of a false signal is high b. it is not rational to believe the signal because some used-car dealers are crooked c. the demand for lemons is eliminated d. the price of a lemon rises above the price of a good used car because warranty costs on lemons are greater than warranty costs on good used cars