Divorce Fallout.Following a messy divorce,Dr.Fred has encountered significant financial difficulties.Dr.Fred has a friend named Slick Slim who tells Dr.Fred that he has been making lots of money by selling people a wristband that allegedly places pressure on a nerve that signals hunger resulting in a lack of appetite.Slick Slim tells Dr.Fred that,although the device does not really work,people who want to lose weight and look good in their bathing suits will do anything and that it sells like hotcakes.Slick Slim tells Dr.Fred that he will pay Dr.Fred five dollars for every band that Dr.Fred can sell to his patients.Dr.Fred proceeds to mail letters to patients suggesting the use of the band for weight loss.He also uses UPS to mail samples of the band to some patients along with letters encouraging purchase of the bands.Dr.Fred then proceeds to bill Medicare for office consultations he has with patients when they come in to purchase the bands.The scheme is wildly successful.Dr.Fred is able to entirely satisfy his alimony obligations within just a few months.Unfortunately,as patients begin to see that they are not having any weight loss,he has been receiving numerous complaints,and a friend of his told him that he could even be facing some criminal prosecution.By which of the following acts,if any,did Dr.Fred commit health care fraud?

A) Dr.Fred did not commit any acts of health care fraud.
B) By the submission of false claims to Medicare only.
C) By the receipt of kickbacks from Slick Slim only.
D) By the submission of false claims to Medicare and the receipt of kickbacks from Slick Slim.
E) By submitting false claims to Medicare,receiving kickbacks from Slick Slim,and merely discussing the matter with Slick Slim.

People had been expecting the price level to be 120 but it turns out to be 122. In response Robinson Tire Company increases the number of workers it employs. What could explain this?

A) Both sticky price theory and sticky wage theory
B) Sticky price theory but not sticky wage theory
C) Sticky wage theory but not sticky price theory
D) Neither sticky wage theory nor sticky price theory

Why might a firm consider raising equity via a rights offering rather than via a general cash offer? What are the disadvantages? If you are a stockholder in the firm, which would you prefer?

Horizontal specialization is often referred to as the process of departmentation.

Paul Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: $$\begin{array}{lllll}\text{ Activity }& \text{ Estimated }& \text{ Expected Activity }& & \\ \text{ Cost Pool }& \text{ Cost }& \text{ Product A }& \text{ Product B }& \text{ Total }\\ \text{ Activity }1& \$22,000& 400& 100& 500\\ \text{ Activity }2& \$16,240& 380& 200& 580\\ \text{ Activity }3& \$14,600& 500& 250& 750\end{array}$$ The activity rate under the activity-based costing system for Activity 3 is closest to:

A) $28.87.
B) $58.40.
C) $19.47.
D) $70.45.