Question 1
A partial income statement from Sizzling Foods, Inc. is shown below:
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2011
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Revenues
Revenue from sales of meals.............
Operating costs and expenses:
Cost of products and services sold......
Selling expenses...........................
Administrative expense...................
Total operating costs and expenses
Income from operations.......................
Interest expense (corporate bonds & loans)
Non-recurring expense (Legal expenses/
fines in settling a federal antitrust suit.....
Income taxes.....................................
Net income.......................................
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$80,000,000
$30,000,000
$3,000,000
$4,000,000
$37,000,000
$43,000,000
$300,000
$200,000
$700,000
$41,800,000
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In 2011, Sizzling Foods owned and occupied an office building in downtown Indianapolis. The building could have been leased to other businesses for $2,000,000 in lease income for 2011. Sizzling food also owned undeveloped land valued at $15,000,000 which is used by employees as a parking lot. Owners of Sizzling Foods can earn a 14% rate of return on that land it they leased it others as a parking lot.
Total explicit costs of using market-supplied resources for Quest Realty in 2011 are
1) $23,000,000
2) $37,000,000
3) $38,200,000
4) $41,000,000
Question 2
Which of the following will NOT affect the elasticity of demand for a product?
1) the number of substitutes
2) how long consumers have to adapt to price changes
3) the cost of producing the product
4) the percentage of the consumer's budget spent on the product
Question 3
Suppose the general linear demand relation is given as follows:
Qd = 680-9P +0.006M-4PR
If M = $15,000 and = $20, the demand function is
1) P = 690-9Qd
2) Qd= 690-9P
3) Qd = 680-9P
4) P = 680-9Qd
5) Qd = 800 -19P