Kanye, Eddie, Jaco, and Danny are trying to form a band. They each have some basic skills on most instruments, so their current plan is for each of them to rotate among vocals, guitar, bass, and drums. After a year of practice and rehearsals, the band still sounds awful. Kanye can't keep a steady beat when on bass or drums, Jaco sounds terrible at everything except the bass, nobody except Eddie can remember all the chords on guitar, and even Danny's own mother thinks his singing sounds like a dying cow. At their current rate, they expect it will be several years before they are good enough to land their first paid performance. None of them have enough money saved up to last that long. They all know you are taking economics and ask your advice. What would you say to them? a) Change the rotation to be random rather than equal, to take advantage of heteroskedasticity.
b) Continue with the current plan, as economies of scale should eventually kick in.
c) Have each member specialize in the role that they are best in, to take advantage of benefits from specialization.
d) Invest their remaining savings in new instruments, as they are at a point where the marginal product of capital exceeds the marginal product of labor.
e) Abandon the band, as continued practice is doomed to suffer diminishing marginal returns.

Upscale hotels in the united states recently cut their prices by 20 percent in an effort to bolster dwindling occupancy rates among business travelers. a survey performed by a major research organization indicated that businesses are wary of current economic conditions and are now resorting to electronic media, such as the internet and the telephone, to transact business. assume a company's budget permits it to spend $5,000 per month on either business travel or electronic media to transact business. graphically illustrate how a 20 percent decline in the price of business travel would impact this company's budget set if the price of business travel was initially $1,000 per trip and the price of electronic media was $500 per hour. suppose that, after the price of business travel drops, the company issues a report indicating that its marginal rate of substitution between electronic media and business travel is 1. is the company allocating resources efficiently? explain.

Each of the following scenarios is based on facts in anactual fraud. categorize each scenario as primarily indicating (1) anincentive to commit fraud, (2) an opportunity to commit fraud, or(3) a rationalization for committing fraud. also state your reasoningfor each scenario.a. there was intense pressure to keep the corporation ' stock from declining further. this pressure came from investors, analysts,and the ceo, whose financial well-being was significantly dependent on the corporation ' s stock price.b. a group of top-level management was compensated (mostly in the form of stock-options) well in excess of what would be considered normal for their positions in this industry.c. top management of the company closely guards internal financial information, to the extent that even some employees on a “need-to-know basis” are denied full access.d. managing specific financial ratios is very important to the company, and both management and analysts are keenly observant of variability in key ratios. key ratios for the company changed very little even though the ratios for the overall industry were quite volatile during the time period.e. in an effort to reduce certain accrued expenses to meet budget targets, the cfo directs the general accounting department to reallocate a division’s expenses by a significant amount. the general accounting department refuses to acquiesce to the request, but the journal entry is made trough the corporate office. an accountant in the general accounting department is uncomfortable with the journal entries required to reallocate divisional expenses. he brings his concerns to the cfo, who assures him that everything will be fine and that the entries are necessary. the accountant considers resigning, but he does not have another job lined up and is worried about supporting his family. therefore, he never voices his concerns to either the internal or external auditors.f. accounting records were either nonexistent or in a state of such disorganization that significant effort was required to locate or compile them.

True or false: banks are required to make electronically deposited funds available on the same day of the deposit