For each of the following inventory errors occurring in 2018. determine the effect of the error on 2018’s cost of goods sold, net income, and retained earnings. assume that the error is not discovered until 2019 and that a periodic inventory system is used. ignore income taxes. u = understated o = overstated ne = no effect cost of net retained goods sold income earnings 1. overstatement of ending inventory u o o 2. overstatement of purchases 3. understatement of beginning inventory 4. freight-in charges are understated 5. understatement of ending inventory 6. understatement of purchases 7. overstatement of beginning inventory 8. understatement of purchases and understatement of ending inventory, by the same amount

Consider how health insurance affects the quantity of health care services performed. suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. her insurance company pays the remaining $120. (the insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) consider the following demand curve in the market for medical care. use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $160. then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $40. q d at p=$160 q d at p=$40 0 10 20 30 40 50 60 70 80 90 100 200 180 160 140 120 100 80 60 40 20 0 price of medical procedures quantity of medical procedures demand if the cost of each procedure to society is truly $160, the quantity that maximizes total surplus is procedures. economists often blame the health insurance system for excessive use of medical care. given your analysis, the use of care might be viewed as excessive because consumers get procedures whose value is than the cost of producing them.