This article presents comments on an article describing a very useful algebraic teaching aid to explain the differences between the direct costing and full-absorption costing models, written by Don T. DeCoster and Kavasseri V. Ramanathan and published in the October 1973 issue of the journal "The Accounting Review." The article introduced students to break-even analysis under absorption costing, which in turn provides additional insights into the underlying assumptions of conventional break-even analysis. As DeCoster and Ramanathan observe,the difference between income under absorption costing and income under direct costing is equal to the change in the amount of fixed overhead in inventory. DeCoster and Ramanathan's paper demonstrates to the students that the difference in income between absorption costing and direct costing is due to a change in the amount of fixed overhead in inventory and is not due to the presence of a volume variance. This analysis can be used to show students that, although most discussions of conventional accounting concepts assume absorption costing, conventional break-even analysis is based on the direct costing concept.

Introduction and summary, 304. — The Ashenfelter-Pencavel model, 305. — Testing the Ashenfelter-Pencavel model, 307.

EXTRAORDINARILY high unemployment among nonwhite teenagers is often explained in terms of the disadvantaged environment from which this group comes. As noted in a recent Manpower Report of the President (1972, p. 80), however, there is a large gap between whites and blacks in the extent of unemployment within urban poverty areas. This suggests that even among males living in the inner-city, racial discrimination in employment may be important in explaining observed racial differentials in unemployment rates. Isolation of the direct impact of race on unemployment is difficult because variations in many factors related to unemployment for both whites and nonwhites are also associated with race as a consequence of generations of discrimination in housing, education, employment, and participation in social and political processes. This study attempts to measure the direct impacts of race and age in determining racial differentials in unemployment rates among males aged 16-21 and 22-34 years residing in urban low-income areas. The older group of males is examined because while the unemployment rates of both whites and blacks drop sharply as teenagers become young adults, the unemployment rate of blacks in recent years has fallen further than that of whites resulting in a lower black-white ratio 'of unemployment rates for the older age category (see Leigh and Rawlins, 1973). Two specific issues are addressed in the paper. (1) How much of racial unemployment rate differentials can be explained by race after standardization by employment-related personal characteristics, and how does the magnitude of the differentials explained by race differ across age groups? (2) How much of the lower unemployment rates observed for the older age group can be attributed to age after standardization, and does the effect of aging differ by race? In approaching these questions we utilize a new source of data, the Census Employment Survey (CES) (United States Bureau of the Census, 1972), recently made available as a part of the 1970 Census. The survey provides data from persons living in 60 selected lowincome areas in 51 large cities and 7 rural areas.1 Approximately half the respondents are black and nearly 12 % are Spanish-speaking (largely Puerto Ricans, Chicanos, and Cubans). For the purposes of this study, CES data offer the advantage, relative to Census data, of providing more information on job training, job-seeking methods, job tenure, and other cognitive skills usually thought to be associated with success in the labor market.

Despite recent advances incorporating uncertainty into the theory of the firm, major problems remain which mar the theory and prevent its practical application. This paper explores and offers solutions to two such problems: the form of the neoclassical firm's objective function under uncertainty, and the derivation of equations for investment and factor inputs from the maximization of a properly chosen objective function. The expression adopted in Section I as the best available objective function for the neoclassical firm is derived from the well-known Lintner-Mossin-Sharpe (LMS) market valuation equation (see the articles by John Lintner (1965a), Jan Mossin, and William Sharpe). However, the major point of this section is that the LMS equation, as presently written, unnecessarily limits the scope of the analysis of optimal firm decisions, particularly investment decisions. Implicit in the currently accepted version of the equation is the assumption that todlay's decisions affect firm cash flow only in the present period. Truly dlynamic problems such as those attacked in the investment analysis pioneered by Robert EIisner and Robert Strotz cannot, therefore. he handlledT'he situation can be remedied, but we will see that this is more difficult in some cases than others. It will depend on one's choice of assumptions about the randomness of future values of the market parameters: the riskless rate of interest and the market price of risk. In the second part of this paper, a revised version of the LMS valuation equation is used to derive optimal investment, labor input, and production policies for models that have been extensively studied under certainty, but which have been treated inadequately or not at all under uncertainty. In particular, we will cover 1) the standard neoclassical case where the firm faces constant factor costs and constant returns to scale, and 2) the EisnerStrotz model, where the cost of investment goods is no longer constant, but a function of the rate of investment.

I. The competitive allocation of insurance under moral hazard, 45. — II. "Competitive" equilibrium, 50. — III. Moral hazard and public provision, 52. — IV. Adverse selection and the competitive market, 54. — V. Alternative devices for dealing with adverse selection and moral hazard from overinsurance, 60.

The purpose of this paper is to investigate the relationship between the money supply and returns to holding common stock. A primary reason for undertaking this investigation is the apparent contradiction between two hypotheses that have been given considerable attention to the literature: the quantity theory of money and the efficient capital markets hypothesis.

Several titles reflecting different approaches to our subject matter were considered for the paper. An historical but somewhat pedantic approach to the teaching of investments might have been titled “Pedagogical Developments in Investments: Past, Present, and Future.” Another possibility was “Sex and the Single Investor, ” a title which probably would have attracted a larger audience. “Beat the Dealer Versus Beat the Market” might well have been an appropriate title in view of our presence here in Las Vegas and also because of recent experience in the securities markets. We finally decided on simply “A Portfolio Analysis of the Teaching of Investments, ” because this seems to better capture the essence of our viewpoint.

Reviews the book "Accounting Principles: A Multimedia Program," by Dudley W. Curry and Robert J. Frame.