Scenario 1 Hector has worked in a small furniture factory for 10 years. He hasn’t had a pay increase in eight years. He frequently works 10 days in a row before getting a day off, and he often works extra hours with no extra pay. He knows that if he quits, the company will just hire someone else to replace him.

Scenario 2
Victor has worked in a steel factory for 10 years. He hasn’t received a pay raise in the 10 years he has been there and often works two weeks before getting a day off. While speaking with his coworkers, he realizes that hardly any of them are satisfied with this situation. So they approach their manager as a group and threaten to quit unless the company increases their pay and gives them days off on a weekly basis. Realizing it would be difficult to replace all of the factory workers, the company gives in to their demands.

What is the difference between these two situations?

With signals from no-claim bonuses and deductibles, a. the marginal cost curve for careful drivers lies to the left of the marginal cost curve for aggressive drivers b. auto insurance companies insure more aggressive drivers than careful drivers because aggressive drivers have a greater need for the insurance c. the market for car insurance has a separating equilibrium, and the market is efficient d. most drivers pay higher premiums than if the market had no signals

Describe what fixed costs and marginal costs mean to a company.

Prepare the operating activities section—indirect method.(lo 4), apthe income statement of paxson company is presented here.paxson companyincome statementfor the year ended november 30, 2014sales revenue $7,600,000cost of goods sold beginning inventory$1,900,000 purchases4,400,000goods available for sale6,300,000 ending inventory1,600,000total cost of goods sold 4,700,000gross profit 2,900,000operating expenses selling expenses450,000 administrative expenses700,0001,150,000net income $1,750,000additional information: prepare the operating activities section—indirect 1. accounts receivable decreased $380,000 during the year, and inventory decreased $300,000.2. prepaid expenses increased $150,000 during the year.3. accounts payable to suppliers of merchandise decreased $350,000 during the year.4. accrued expenses payable decreased $100,000 during the year.5. administrative expenses include depreciation expense of $110,000.instructionsprepare the operating activities section of the statement of cash flows for the year ended november 30, 2014, for paxson company, using the indirect method.net cash provided $1,940,000