Let’s consider the effects of inflation in an economy composed of onlytwo people: bob, a bean farmer, and rita, a rice farmer. bob and ritaboth always consume equal amounts of rice and beans. in 2010, theprice of beans was $1, and the price of rice was $3.a. suppose that in 2011 the price of beans was $2 and the price ofrice was $6. what was inflation? was bob better off, worse off, orunaffected by the changes in prices? what about rita? b. now suppose that in 2011 the price of beans was $2 and the priceof rice was $4. what was inflation? was bob better of , worse off, or unaffected by the changes in prices? what about rita?
c. what matters more to bob and rita-the overall inflation rate orthe relative price of rice and beans?

Suppose the number of firms you compete with has recently increased. you estimated that as a result of the increased competition, the demand elasticity has increased from –2 to –3 (i.e., you face more elastic demand). you are currently charging $10 for your product. what is the price that you should charge if demand elasticity is -3?

Diversified semiconductors sells perishable electronic components. some must be shipped and stored in reusable protective containers. customers pay a deposit for each container received. the deposit is equal to the container’s cost. they receive a refund when the container is returned. during 2018, deposits collected on containers shipped were $856,000. deposits are forfeited if containers are not returned within 18 months. containers held by customers at january 1, 2018, represented deposits of $587,000. in 2018, $811,000 was refunded and deposits forfeited were $41,000. required: 1. prepare the appropriate journal entries for the deposits received and returned during 2018. 2. determine the liability for refundable deposits to be reported on the december 31, 2018, balance sheet.

Robert black, regional manager for ford in texas and oklahoma, faced a dilemma. the ford f-150 pickup truck was the best-selling pickup ever, yet ford's headquarters in detroit had decided to introduce a completely redesigned f-150. how could mr. black sell both trucks at the same time? he still had "old" f-150s in stock. in his advertising, mr. black referred to the new f-150s as follows: "not a better f-150. just the only truck good enough to be the next f-150." this statement represents ford's of the new f-150.