Unlike perfectly competitive markets, health insurance and health care markets are characterized by asymmetric information in many forms. To see the consequences, consider the following scenario: The population is evenly divided between 2 types of people: healthy people and unhealthy people. Healthy people have expected health care costs of $1000 per year. Unhealthy people have expected health care costs of $5000 per year. Unhealthy people can become healthy by working out, eating healthier, and taking preventive care. Assume that the cost of becoming healthy in terms of time and effort is $2000 per year. These people live in a city with one employer who will hire anyone who is willing to work. This employer provides complete health care to all its employees; all health care costs are covered by the insurance.
1. Do the unhealthy employees have an incentive to become healthy?
a. Yes.
b. No.
c. Not enough information.
2. What would the new actuarially fair cost of insurance be at the original firm?
3. What is the actuarial fair cost of insurance for all the workers?

1.  No, unhealthy employees do not have an incentive to become healthy.

2. The new actuarially fair cost of insurance would be $5000 at the original firm.

3. The actuarial fair cost of insurance for all the workers would be $3000

No,  unhealthy employees do not have an incentive to become healthy. This is due to the fact that the only employer in the city is giving jobs to everyone regardless of their health status. Besides, their health care cost is covered and managed by the employer by the insurance. Therefore, unhealthy employees do not have an incentive to become healthy.

The new actuarially fair cost of insurance can be determined by taking the probability of healthy employees and unhealthy employees with their health costs.

However, provided that all healthy people worked for the new employee, it implies that the original firm comprise of only the unhealthy workers and the new actuarially fair cost of insurance can be computed as follows:

∴

Actuarial Fair cost of insurance = Probability ( Healthy employee × cost of health) +  Probability (unhealthy employee × cost of health)

Actuarial Fair cost of insurance = (0 × $1000) + (1 × $5000)

Actuarial Fair cost of insurance = $5000

Therefore, the new actuarially fair cost of insurance would be $5000 at the original firm.

The actuarial fair cost of insurance for all the workers refers to the total sum of required payoffs for both the healthy employees and unhealthy employees

Actuarial Fair cost of insurance = Probability ( Healthy employee × cost of health) +  Probability (unhealthy employee × cost of health)

Actuarial Fair cost of insurance = [tex]\mathbf{(\dfrac{1}{2} \times \$1000) + (\dfrac{1}{2} \times \$5000)}[/tex]

Actuarial Fair cost of insurance = $500 + $2500

Actuarial Fair cost of insurance = $3000

Therefore, the actuarial fair cost of insurance for all the workers would be $3000

Learn more about Actuarial Fair cost of insurance here:

https://brainly.com/question/15970207

Help help help help business please

Hayleah is a california cpa practicing in california. to renew her license in active status, hayleah must to meet the basic requirement of completing 80 hours of qualifying continuing professional education in the two-year period immediately preceding her license expiration. Her license expires on june 30, 20x7. Which of the following are specific requirements regarding continuing education that hayleah may or may not be covered by depending on the type of work that she performs?
A) Fraud continuing education requirement
B) Government auditing continuing education requirement
C) Accounting and auditing continuing education requirement
D) Hayleah may take all of her 80 hour requirement in any subjects that she chooses.
E) All of the above.Hayleah may take all of her 80 hour requirement in any subjects that she chooses

The following data are accumulated by Zadok Company in evaluating the purchase of
$370,000 of equipment, having a four-year useful life:

Net Income Net Cash Flow
Year 1 $67,500 $160,000
Year 2 47,500 140,000
Year 3 (12,500) 80,000
Year 4 (12,500) 80,000

a. Assuming that the desired rate of return is 12%, determine the net present value for the
proposal.

b. Would management be likely to look with favor on the proposal? Explain.

Which of the following is one way business can be categorized ? A. By width B. By product C. By salary D. By demographic

At the end of the closing process, Income Summary will hold a balance.

a) True
b) False

A retail store had sales of $44,900 in April and $55,000 in May. The store employs eight full-time workers who work a 40-hour week. In April the store also had eight part-time workers at 12 hours per week, and in May the store had eleven part-timers at 17 hours per week (assume four weeks in each month). Using sales dollars as the measure of output, what is the percentage change in productivity (dollars output per labor hour) from April to May

Sunland Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2021. In 2021, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below.
2019 2020 2021
Completed contract $480000 $318000 $156000
Percentage-of-completion 780000 399000 300000
Which of the following will be included in the journal entry made by Sunland to record the income effect?
a. A debit to Retained Earnings for $239400.
b. A credit to Retained Earnings for $228600.
c. A credit to Retained Earnings for $158400.
d. A debit to Retained Earnings for $158400.

In 2019, Krista paid $1,600 in qualified adoption expenses to adopt a U.S. child. The adoption was not finalized, and in 2020, she paid an additional $2,500 in qualified adoption expenses. The adoption failed again in 2020 and never became final. What is the maximum amount Krista may be eligible to claim for the Adoption Credit on her 2020 return

True or False: The cost per exposure of most online advertising channels is difficult to account for.

Garcia Co. issued bonds with detachable common stock warrants. Only the warrants had a known market value. Cash proceeds exceed the sum of the fair value of the warrants and the face amount of the bonds. This excess is reported as:

The recording, summarizing, and reporting of the economic activities and events of an organization is known as _____.

Audra owns a rental house. She makes mortgage payments of $1,060 per month, which include insurance, and pays $2,700 per year in property taxes and maintenance. Utilities are paid by the renter. What should Audra charge for monthly rent to make $4,500 profit each year?

Assume the following data for Oshkosh Company before its year-end adjustments:
Unadjusted Balances
Debit Credit
Sales $51,600,000
Cost of Merchandise Sold $31,750,000
Estimated Returns Inventory 28,100
Customer Refunds Payable 115,400
Estimated cost of merchandise that will be returned in the next year $400,000
Estimated percent of refunds for current year sales 1.2%
Journalize the adjusting entries for the following:
(a) Estimated customer refunds and allowances.*
(b) Estimated customer returns.*
Refer to the Chart of Accounts for exact wording of account titles.*
CHART OF ACCOUNTS
Oshkosh Company
General Ledger
ASSETS
110 Cash
120 Accounts Receivable
125 Notes Receivable
130 Merchandise Inventory
131 Estimated Returns Inventory
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
180 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
216 Salaries Payable
218 Sales Tax Payable
219 Customers Refunds Payable
220 Unearned Rent
221 Notes Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
REVENUE
410 Sales
610 Rent Revenue
EXPENSES
510 Cost of Merchandise Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710
Interest Expense
Journalize the adjusting entries for the following: (a) Estimated customer refunds and allowances. (b) Estimated customer returns. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY
1
Adjusting Entries
2
3
4
5

Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the interest income earned on bonds or deposits is taxed at a rate of 20%. Now suppose there is an increase in the tax rate on interest income, from 20% to 25%.
Shift the appropriate curve on the graph to reflect this change.
This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to and the level of investment spending to ______.

Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $49,000 and a remaining useful life of five years. It can be sold now for $59,000. Variable manufacturing costs are $42,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Machine A Machine B Purchase price $ 116,000 $ 129,000 Variable manufacturing costs per year 19,000 13,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A. (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine

In terms of measuring and validating supply savings: Group of answer choices static markets, technologies, and volumes facilitate the process. there is a universal definition of supply savings. information systems easily capture savings. in many cases there is an inability to convert savings into profit.

Thaddeus is eighty-two years old and lives by himself in his rent-stabilized apartment. He is on a fixed income and has no family. He purchased a set of premium cast-iron cooking pots after meeting Henry, a salesperson, at the supermarket. Thaddeus signed the contract in the coffee shop next door after the two men left the supermarket. The cooking pot set cost $2,400 and is payable in 24 equal monthly installments. The same set retails for $1,000 elsewhere. The next day, Thaddeus decides that he cannot afford the cooking pot set.
a. The circumstances surrounding the transaction would be considered by the court, including the bargaining power of the parties.
b. The doctrine of unconscionability would probably allow Thaddeus to be released from his obligation.
c. The contract unreasonably favors Henry.
d. All of the above.

MC Qu. 87 Riemer, Inc. has four... Riemer, Inc. has four departments. Information about these departments is listed below. Maintenance is a service department. If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department. (Do not round your intermediate computations.) Maintenance Cutting Assembly Packaging Direct costs$18,000 $24,000 $64,000 $39,000 Sq. ft. of space 750 1,250 2,250 2,500 No. of employees 7 3 7 7

Debentures are paid back only when the company goes into liquidation

A lessor enters a sales-type lease with an unguaranteed residual. The lessor will record:____.
a. A credit to sales revenue for the fair value of the asset less the gross amount of the unguaranteed residual value.
b. A debit to lease receivable for the gross amount less the present value of the unguaranteed residual value.
c. A credit to sales revenue for the fair value of the asset.
d. A credit to sales revenue for the fair value of the asset less the present value of the unguaranteed residual value.

Below are five items that would be included in the balance of payments for the United States. Sort each item into either the current account or the capital account.

a. a Japanese citizen earns dividend income on shares of stock of a U.S. firm
b. a U.S. citizen buys a vacation home in Acapulco, Mexico
c. a U.S. citizen buys a BMW made in Germany
d. a Japanese citizen donates money to a U.S. charity

Tanya's employer offers a cafeteria plan that allows employees to choose among a number of benefits. Each employee is allowed $6,000 in benefits. For 2021, Tanya selected $3,480 ($290 per month) of parking, $1,720 in 401(k) contributions, and $800 of cash. How much must Tanya include in taxable income

two special courses suggested for the career and has offered reasons for their placement Agriculture, Food & Natural Resources.two special courses suggested for the career and has offered reasons for their placement Agriculture, Food & Natural Resources.

Vaughn Manufacturing reported net income of $185,060 for 2022. Vaughn Manufacturing also reported depreciation expense of $33,860 and a loss of $4,930 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $16,140 for the year, a $15,330 increase in accounts payable, and a $4,310 increase in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2022. Use the indirect method

Joseph (43) and Azalea (44) are married with no dependents. They will file separate returns for 2020. Joseph files his return first and claims total itemized deductions of $22,500. If Azalea chooses to claim the standard deduction on her return, what is the maximum amount she may claim

PLEASE HELP

Assuming all other factors are the same, which statement about the cost of
loans is correct?
A. A loan with simple interest will cost more than a loan with
compound interest.
B. A loan with simple interest and a loan with compound interest will
cost the same.
C. Interest compounded daily will cost more than interest
compounded monthly.
D. Interest compounded annually will cost more than interest
compounded quarterly.
SUBMIT

In each diary kept by the owner/engineer's or contractor's personnel, entries should be made: A. to document every working day, whether any work is performed or not, or even if you did not go to the project site that day. B. only if something of particular importance is happening. C. regularly each time that you visit a site where work is being done; however, no entry need be made unless you were personally at the site and witnessed work being performed. D. A diary is neither necessary nor desirable on construction.

Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak.
Kevlar $250 per kayak
Resin and supplies $100 per kayak
Finishing kit (seat, rudder, ropes, etc.) $170 per kayak
Labor $420 per kayak
Selling and administrative expenses—variable $400 per kayak
Selling and administrative expenses—fixed $119,700 per year
Manufacturing overhead—fixed $240,000 per year
Bill and Diane have asked you to provide a cost-volume-profit analysis, to help them finalize the budget projections for the upcoming year. Bill has informed you that the selling price of the composite kayak will be $2,000.
(a) Calculate variable costs per unit.
Variable cost per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(b) Determine the contribution margin per unit.
Contribution margin per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(c) Using the contribution margin per unit, determine the break-even point in units for this product line.
Break-even point
Bill Johnson, sales manager, and Diane Buswell, co
units
(d) Assume that Current Designs plans to earn $270,600 on this product line. Using the contribution margin per unit, calculate the number of units that need to be sold to achieve this goal.
Number of units
Bill Johnson, sales manager, and Diane Buswell, co
units
(e) Based on the most recent sales forecast, Current Designs plans to sell 1,000 units of this model. Using your results from part (c), calculate the margin of safety and the margin of safety ratio. (Round margin of safety ratio to 1 decimal place, e.g. 25.5%.)
Margin of safety $
Bill Johnson, sales manager, and Diane Buswell, co
Margin of safety ratio
Bill Johnson, sales manager, and Diane Buswell, co
%
By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor.
(a) Calculate variable costs per unit.
Variable cost per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(b) Determine the contribution margin per unit.
Contribution margin per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(c) Using the contribution margin per unit, determine the break-even point in units for this product line.
Break-even point
Bill Johnson, sales manager, and Diane Buswell, co
units
(d) Assume that Current Designs plans to earn $270,600 on this product line. Using the contribution margin per unit, calculate the number of units that need to be sold to achieve this goal.
Number of units
Bill Johnson, sales manager, and Diane Buswell, co
units
(e) Based on the most recent sales forecast, Current Designs plans to sell 1,000 units of this model. Using your results from part (c), calculate the margin of safety and the margin of safety ratio. (Round margin of safety ratio to 1 decimal place, e.g. 25.5%.)
Margin of safety $
Bill Johnson, sales manager, and Diane Buswell, co
Margin of safety ratio
Bill Johnson, sales manager, and Diane Buswell, co
%

As a Paralegal, you have been asked to prepare a contract for your client based upon the following: Client: Tire Manufacturer, FT. Wayne, Indiana. The client is contracting to provide 15,000 tires per month to Car Assembly Plant in Louisville, Kentucky for the next 3 years. The price agreed upon is $30 per tire. The tires must be all-weather with a 60,000-mile warranty. It will be a destination contract. The car Assembly Plant is insistent that the tires be delivered in a manner so that there is always only a two-day supply stored at the Car Assembly Plant. The plant does not have enough room to store any additional tires. They would like there to be a penalty if the Tire Manufacturer brings too many. Your client is concerned about this provision as the number of cars manufactured each day varies. Car Assembly Plant is also concerned that the tire supply is never delayed because Car Assembly Plant has to pay the assembly workers if the assembly line stops because there are no tires. Car Assembly Plant wants Tire Manufacturer to pay for any downtime expenses due to lack of tires. Your Client would like there to be an Arbitration clause and that Indiana is the state to resolve issues. Additionally, there should be a Liquidation clause and a non-disclosure clause. Prepare a contract for your client. Attach the completed contract.

How should Sophia advise her senator? Why?