Chapter 1 Homework

Chapter 1 Homework
1) (10%) A plumbing and electrical repair company estimates it can complete an average of 4
additional service jobs each day by hiring another technician. If a new technician would be hired
on at $22.50 per hour and an 8-hour workday is assumed, what would the average billing price
per service job need to be in order to move forward with the new hire?
What is the most the company would be willing to pay the new technician per hour if the
average billing price per job was $105?
2) (10%) After graduating from SPC, you receive 3 job offers. The starting salaries are $40,000,
$46,000 and $49,000, respectively. Briefly explain for each offer what the opportunity cost
would be if accepted. How would the benefits packages for each company be factored into the
analysis?
3) (10%) The Jones family has taxable household income of $75,000, while the Jonas family has
taxable household income of $90,000. If they paid income taxes of $15,000 and $22,500,
respectively, what type of tax system is in place?
What would the tax figure need to be for the Jonas family in order for the tax system to be
considered proportional?
4) (20%) Describe the tools that the Federal Reserve has to affect the money supply and therefore
impact interest rates throughout the financial system. How would the Fed use each of these
tools to expand the money supply?
What is the current Federal Funds rate and Discount Rate? How have these rates changed over
the past 12 months? Why have they changed?
5) (20%) Compare and contrast systematic versus unsystematic risk. Provide a couple of examples
to illustrate the differences. How can either risk be mitigated?
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NOT FOR DISTRIBUTION OR SHARING OUTSIDE OF THIS COURSE
6) (20%) Describe your team’s process going forward for completing weekly assignments. When
are your scheduled meeting days and times? What forum or technology will you use to meet?
What do you expect to accomplish during the meetings? How will the ‘minutes’ and agreed
upon duties and goals established during your meetings be summarized and who will post the
recap to your MyCourses discussion forum? What other forms/methods of communication will
be used throughout the week? How will the major responsibilities (like submitting work for the
team) change week to week?
7) (10%) Briefly (a few sentences each) provide at least 3 different business ideas the team is
considering for the course project. Each team member should provide one idea. For each idea,
identify which team member suggested it. (The team’s formal proposal and charter document
will be due in the middle of Week 2)