...Chapter 15, Question 14 National income and output are used in economic studies to estimate the value of goods and services produced in an economy a snapshot of a country’s economic activity. A system of national account is employed to account for and record economic changes. National income is calculated using a variety of different methods. Some of the more popular methods include GDP (Gross Domestic Product), GNP (Gross National Product), NNP (Net National Product), NNI (Net National Income) PI (Personal Income) and PDI (Personal Disposable Income), among many others. National income statistics provide us with a numerical comparison of one country’s economic situation with another country’s economic situation. Easily economic growth of countries can become pared over time or at a particular snapshot in time. National income accounts also provide government agencies and private businesses with a tool for economic planning and budgeting. What’s more is this information provides a comparison with the standard of living from one country to another. Many issues arise with accounting for the true national income of any country. Certainly there is a concern for double-counting, for example the outputs of one business are the inputs of another business. If both are accounted for separately and added to the final numbers, the final numbers may be exacerbated by the inaccuracies of merging the accounts. Undoubtedly there are controls in place to avoid such in accuracies. Using...
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...Chapter 16, Question 6 According to Stone, hyperinflation occurs when the inflation rate is extremely high and this high rate can have a devastating effect on the economy (436). These increases happen quickly and happen because it goes unchecked. The inflation rates in under hyperinflation usually go to 100% rate to as much as 1000% (economicshelp.org). What causes hyperinflation could be excessive government spending of tax revenue (high deficits) along with printing of money to finance these deficits (Stone 436). Why is this devastating? One reason, if there is not enough tax revenue collected and too much currency being printed, this can cause the value of currency to decline and at the same time prices increase. When this happens, the value of savings is quickly reduced and the value of investments begins to fall. What this means is, the rate of inflation goes above the interest rate of savings accounts and investment accounts (economicshelp.org). After a while, currency, the banks, pensions and other financial instruments become worthless. If hyperinflation is at its worse, families or workers themselves rush to the stores and buy anything they can use the money to purchase. This can cause people to begin hoarding of necessities. Once this occurs, you can no longer have a monetary system and stores and people turn to bartering (Stone 436). There is no longer a monetary system because the precious metals (gold, silver, etc.) and foreign currency that have...
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...Exercise 1 - Everyone’s Gasoline Problem It seems like gas prices change on a daily basis for the better or for worse. I spent the week studying the gas prices in my area as I drove by different gas stations. It’s amazing how the prices can different from area to area, company to company, and even the same company but just a mile few miles apart. The simplest answer is supply and demand but what actually goes into the decision making part of what gas prices should be? Research shows that 50% of the price of gas is based on the price of crude oil. This is what is refined and turned into gasoline. (Energy: demand vs. supply) Companies have to purchase crude oil to make into gasoline. This cost of purchasing the oil and refining it is then passed down to the customer. As the demand for crude oil or gas goes down, so do the prices. This can happen during recessions or when people travel less. As the demand increases, prices can go up, like during the summer when consumers travel more. Location can also contribute to the price of gas. Some locations can tend to have lower prices because of competition. They’re considered perfect competitive firms because they have to have the best price for the customer to want to come in and purchase their gas. I usually use the Safeway gas pumps instead of going across the street to the Arco station because I can receive a discount but the price is usually always three to five cents less than the Arco station. As I continue to drive to...
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...GM545 Final Exam Study Guide 1. Demand and Supply (TCO A) Know what the law of supply and demand is all about and be able to predict the impact on equilibrium price and/or quantity when supply and/or demand factors change. The interpretation of some basic graphs will be required. 2. Elasticity and Marginal Revenue (TCO B) The label on this question suggests what you need to know. You need to be able to calculate price elasticity of demand and/or supply and be able to interpret it. Also, given demand, you need to be able to calculate marginal revenue when the price level changes. Remember that MR = Change in TR / Change in Quantity. 3. Labor Productivity (TCO C) Be able to calculate Marginal Product (MP), Marginal Revenue Product (MRP), Marginal Cost (MC), and determine the proper number of workers to hire using Marginal Analysis (just like we did in our week 2 TDA discussion). 4. Calculating Profit or Loss (TCO C) Given a product price, as well Is this essay helpful? Upgrade your account to read more and access more than 600,000 just like it! GET BETTER GRADES as fixed and variable costs at different production levels, be able to determine whether the firm earns an economic profit, breaks even, or incurs an economic loss at the best possible production level. Also be able to determine how much the profit or loss will be (similar to a question you had on Quiz 1). 5. Marginal Analysis (TCO D) A key issue covered in several TCOs involves...
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...Course Project Paper 1 David J Marshall Business Economics GM545 Winter Term 2012 mr_marshalls@live.com Exercise 1: Microeconomics Issues: Question # 1 There are two reasons gas prices must go up. The first is to get people into coal-powered cars. Coal-powered cars can only be driven around 40 miles before they must be plugged back into the grid for more coal power. If everyone moves to coal-powered cars, the drivers will be forced to live closer to cities (Erickson, 2011). According to my current reading, when you look at the term product differentiation in buying your gas, this term gives competitors the edge to host the cheapest gas (Chapter 10:253). In the current week, the Shell gas pump went from $3.65 to $3.57 per gallon and the week before that the gas price during week 1 was $3.47 expecting to rise to $4 per gallon in Lexington, KY. During my travel to Indiana the gas prices average $3.99 per gallon. In using the midpoints of price and quantity to compute the relevant percentage changes essentially gives us the average elasticity between point (a) and point (b) (Stone, Gerald. “Core Economics” Worth Publishers, 07/2011. p. 118). My equation below may show just exactly how these price may increase or decrease based on the elasticity formula: Eᵈ = 200 / 400 ÷ 3.65 – 3.57 / (3.57 + 3.65) / 2 = 200 / 400 ÷ (- 0.08 / 5.3950) = .5 ÷ -0.0148 = [-33.72] = 33.72 I think for the most part of our gas prices has increase due to determinants of our increase...
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...ECON545 Quiz 2 Guidelines Recall that Keller courses are built around Terminal Course Objectives (TCOs). At the conclusion of the course, you will even be asked to rate the extent to which the TCOs have been covered. There are 9 TCOs specified for GM545. Review the TCOs by clicking on Course Syllabus at the top of the course home page, and then clicking on the Terminal Course Objectives link. Also, please note that the TCO(s) to be covered during any given week are specified in the Objective section for that course week. Quiz 2 addresses material covered in Weeks 4 and 5 of the course. The TCOs at issue are: Course Objective Description E Given an introduction to key macroeconomic variables, distinguish between real and nominal output variables, between various inflation measures, and demonstrate the derivation of the unemployment rate; assess the sensitivity of strategic policy decisions based on these measures to the quality of available statistical data. F Given increasing interdependencies between trading nations and the analogy of foreign currency as a commodity, analyze the effects of demand and supply pressures on exchange rates; students must demonstrate an understanding of trade barriers in general, as well as the effectiveness of institutional entities (e.g., GATT, NAFTA, and EU). You will note that the problems that have been assigned from the book focus on these TCOs. The problems address the basics while Discussions topics focus on applications...
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...ECON545 Final Exam Study Guide The final exam will be an online open-book, open-notes, open-computer exam with a time limit of 3-1/2 hours. It will be worth 30% of the course grade. Your final course grades must come from Keller (not me). The final exam will consist of 9 essay questions (6@ 30 points each; 3 @40 points each), each having multiple parts. There are calculations to be performed, but they are straight forward arithmetic operations for which a calculator should not be needed. As with the quizzes, I believe that the final exam should focus on basic economic principles and models, and I have structured the exam in that way. Also, I have made sure to ask questions that reinforce all of the GM545 TCOs. A good way to prepare is to review the assigned chapters from the text, the Key Questions that were assigned from the text, and the two quizzes. There is quite a bit of material to cover. So, in the interest of helping you focus your study somewhat, why don’t I tell you what is the subject matter of each of the nine questions? 1. Demand and Supply (TCO A) Know what the law of supply and demand is all about and be able to predict the impact on equilibrium price and/or quantity when supply and/or demand factors change. The interpretation of some basic graphs will be required. 2. Elasticity and Marginal Revenue (TCO B) The label on this question suggests what you need to know. You need to be able to calculate price elasticity of demand and/or...
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...Rachael Furman Business Economics GM545 Summer 2012 furman.rachael@gmail.com Exercise 1: Number 1 – Everyone’s Gasoline Problem ` Rising gas prices has been a huge concern for most Americans over the last couple of years. It seems as though each weekly stop at the pump costs more and more each time. Most people just pay the price but never stop to think why these gas prices continue to rise. There are seven major factors that directly affect the price of gasoline. These factors are: supply and demand, crude oil, gasoline, natural gas, heating oil, government regulations, and natural disasters. Two of the most important of these factors is supply and demand and crude oil. The demand for gasoline comes from the cars, trucks, SUVs, and most other vehicles on the highway. Many consumers use their vehicles to travel longer and further in the summertime for traveling, vacations, and road trips. “Americans drive nearly 3 trillion miles per year, according to the Motor and Equipment Manufacturer’s Association (Bonsor 1).” The United States uses 20 million barrels of oil products per day, which 178 million gallons of that is gasoline. Price increases typically occur when the world crude-oil market tightens and lowers inventories making the supply less. When the supply is less, it becomes more difficult to fulfill the required demand. Therefore the price rises making the gas more exclusive. Fewer consumers are willing to pay the higher price, therefore...
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...GM545 Quiz 1 Guidelines Recall that Keller courses are built around Terminal Course Objectives (TCOs). At the conclusion of the course, you will even be asked to rate the extent to which the TCOs have been covered. There are 9 TCOs specified for GM545. Review the TCOs by clicking on Course Syllabus at the top of the course home page, and then clicking on the Terminal Course Objectives link. Also, please note that the TCO(s) to be covered during any given week are specified in the Objective section for that course week. Quiz 1 addresses material covered in Weeks 1 and 2 of the course. The TCOs at issue are: Course Objective Description A Given a demand function and a supply function, illustrate how the price mechanism, in response to changes in other demand or supply factors, leads to a new market equilibrium price and level of output. B Given appropriate marketing data, including price elasticity coefficients, demonstrate how to use this information in product pricing in order to maximize revenues. C Given knowledge of key cost and marginal revenue relationships, use marginal analysis to demonstrate shutdown, break-even and optimal output points, as well as the optimal amount of a resource to utilize. You will note that the problems that have been assigned from the book focus on these TCOs. The problems address the basics while Discussion topics focus on broad applications. The quizzes (and the final exam) emphasize the basics. So, make sure...
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...Course Project - Part 1 This course contains two project assignments -- Project Part 1 in Week 2, and Project Part 2 in Week 5. Because of this, you will need to spend additional time and effort in Weeks 2 and Week 5. |Overview | | | | | Project Part 1 (PP1) Project Part 1 (PP1) consists of performing application-oriented exercises wherein the specific economic principles learned in this course are put to practical use. You must translate your ideas into economic analysis using the specific economic theory and economic terms contained in the TCOs covered in the course, and demonstrate that you are understanding and utilizing material from text chapters covered up to this point in the course, to receive full credit on the assignment. You are being asked to submit a report containing responses to three exercises. Exercise 1 entails a choice of one topical microeconomic issue out of two possible alternatives. Exercises 2 and 3 entail a choice of two textbook questions out of a list of possible alternatives. |Exercise 1 | | | | ...
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...Sonia L. Godoy Business Economics GM545 Summer 2010 term Slissy@hotmail.com 1. Everyone’s Gasoline problem The Gasoline Prices are so unpredictable one day they are up and next day they are down. As we can see in figure one the crude oil and Gas prices are related. As any product when there is a higher demand for it the supply has to be increase giving the sellers an upper hand in pricing. There are also other reasons as to why prices might rise like Pipe Leaks which are shortage of the product; Inflation and taxes are also factors that can make the price of gas change throughout the weeks. Also because of all the unemployment that has been going on in our country people are not traveling as much so they are not using gas as much which makes the demand for gasoline to decrease. At this moment New Jersey’s average gas price is $2.45 per gallon which is lower than the national average of $2.68. Figure 1 Chapter 7 Question 15 The implementation of Sarbanes Oxley Act has become an additional Cost for companies, which is a fixed cost. It has been reported that “Larger companies incur higher compliance cost in dollar terms (absolute cost), while smaller companies report higher costs as a fraction of asset value “scaled cost). There is a startup fixed cost which is not scalable. Then there are some recurring fixed costs. For companies complying with both parts of Section 404, the cost of complying with Section 404(b) is reportedly similar to the incremental cost...
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...Course Project Part 1 Name Business Economics GM545 Professor May 10, 2012 Exercise 1: Microeconomic Issues Reported ethical issues involving a company or its products can have a major impact on that company’s market position, social image, product demand, and resulting market value (price). Some markets are more sensitive to these issues than others, such as healthcare. Abbott Laboratories has been in the news in the past few weeks due to an ethical issue reported to the government. It was reported that Abbott was marketing their popular medication Depakote for health conditions that it was not approved for by the FDA. “Depakote is an anti-seizure and mood-stabilizing drug prescribed for bipolar disorder. However, the company admitted that it marketed the drug for unapproved uses, including treatment of schizophrenia, agitated dementia, and autism.” (Yost, 2012). This admission will cost Abbott $1.5 billion in fines and settlement costs. More importantly, this admission may cost Abbott far more than the money. It may cost them market share and a damaged public image. Depakote is a very popular medication, but poor press around the company’s behavior around the marketing of the product can change the company image in not only the public, but with their direct customers such as hospitals and physicians. This can greatly impact demand for their product, impacting market price and profit for the company. Abbott does have a very large market share compared...
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...Business Economics GM545 Project Part 2 Fall Session A 2011 Mohamed Bah t.bahafsl@yahoo.com _______________________________ DeVry University Keller Graduate School of Management New Jersey North Brunswick An economic system should provide two social needs for the people it serves first an adequate production of goods and second an equitable distribution of those goods. National Income is the science of how to measure an economy’s overall economic performance. It mainly focuses on the overall level of production of goods and services. The Gross Domestic Product (GDP) per person tells us the income and expenditure of the average person in the economy, though it is not intended to be a measure of happiness or quality of life, It is good to measure the material well-being of the whole economy, because the more real GDP we have mean that we have higher standard of living by being able to consume more goods and services. In addition, we do have some factors or issues not in GDP that lead to the well being of the economy such as leisure, quality environment, volunteer work, and child rearing. Having measured these factors or issues above the national income accounting is faced with these limitations: • Measurement problem exist, • GDP measure economic activities not welfare, and • Subcategories are often interdependent. Finally, due to these limitations we faced these measurement errors: • Illegal drug sales • Work...
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...Business Economics GM545 Spring 2011 Everyone’s Gasoline Problem. We are all familiar with fluctuating prices of gasoline at the pump. Why does this happen? Research the recent history of gasoline pricing in your area, and attempt to relate any fluctuations you observe to documented supply and demand factors, as outlined in our book. By the end of the 6-week period of November 19th –December 31, gas prices in Chicago had risen significantly. In it’s bi-monthly newsletter at the beginning of January 2011, the Lundberg Survey, a report which tracks gas prices, points to Chicago for the highest gasoline prices nationally topping the charts at an average of $3.35 per gallon for regular. With Illinois already high, 58.8 cent gas tax coupled with the city of Chicago’s gas tax of 50 cent a gallon any nationwide increase in gas prices will be even more significant in Chicago (1). Gas prices vary widely from state to state based largely on local taxes placed on the inelastic product. But prices have been trending higher nationwide after an increase in the price of crude oil, the main ingredient in gasoline (2). In Chicago, just as in the rest of the U.S., there was an increase in demand for oil during the period of November 19th –December 31, 2010. This increase in demand is illustrated by the decrease in U.S. crude oil inventories. Between the mentioned period of 6 weeks, crude oil inventories declined by 21.84 million barrels (3). These declines were a result of increases in gas...
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...Econ545 Paper Business Economics GM545 Spring 2011 Everyone’s Gasoline Problem. We are all familiar with fluctuating prices of gasoline at the pump. Why does this happen? Research the recent history of gasoline pricing in your area, and attempt to relate any fluctuations you observe to documented supply and demand factors, as outlined in our book. By the end of the 6-week period of November 19th –December 31, gas prices in Chicago had risen significantly. In it’s bi-monthly newsletter at the beginning of January 2011, the Lundberg Survey, a report which tracks gas prices, points to Chicago for the highest gasoline prices nationally topping the charts at an average of $3.35 per gallon for regular. With Illinois already high, 58.8 cent gas tax coupled with the city of Chicago’s gas tax of 50 cent a gallon any nationwide increase in gas prices will be even more significant in Chicago (1). Gas prices vary widely from state to state based largely on local taxes placed on the inelastic product. But prices have been trending higher nationwide after an increase in the price of crude oil, the main ingredient in gasoline (2). In Chicago, just as in the rest of the U.S., there was an increase in demand for oil during the period of November 19th –December 31, 2010. This increase in demand is illustrated by the decrease in U.S. crude oil inventories. Between the mentioned period of 6 weeks, crude oil inventories declined by 21.84 million barrels (3). These declines were a result of increases...
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