...Name Tutor Course Date Microeconomics Quiz 2 Q.1 The purpose of a business is the provision of goods and services in exchange for money. The major business goal is making profits. Q.2 a) Marginal cost is the change in the firm's total cost resulting from one unit change in the output. b) Industry is a group of companies or firms that produce the same goods and services, for example, the oil industry c) Fixed cost is the expense incurred by a firm or business regardless of the level of output. This classification includes salaries, rent or the interest of the borrowed capital d) Separation of ownership and control is the delegation of duties by the financers of an enterprise, to people who are qualified in the running of a company e) A plant is a workplace with several departments usually in one location. For example a cement plant f) Three sources of capital include debt financing, leasing, and equity financing g) Cost leadership occurs when a company reduces the prices of goods and services so that they are low than the competitors thereby increasing its competitive advantages over the rival companies. h) Market equilibrium occurs when the level of supplies is equal to the level of demand for a particular good or service. i) A surplus condition occurs when the supply of a commodity is more than the demand j) Consumer saturation occurs when no further growth can be achieved regarding new customers because there is no improvement...
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...buy a wingding in the US, which means the quantity demanded domestically is now 18 and the quantity supplied domestically is 12, which is only a shortage of 6 units that needs to be supplied. C. The tariff decreased consumer surplus by the area with height 8-6 and base y = 26 and base z= 18. The area of this can be calculated by splitting the area into a rectangle and a triangle. The rectangle has an area of (8-6)x18=36 and the triangle has an area of (1/2)x(26-18)x2=8. Adding the two the consumer surplus went down by 44. D. Producer surplus increased after the tariff, by the area with height 8-6 and base y=6 and base z=12. The area of a trapezoid is just [(b1+b2)/2]xh, which is [(6+12)/2]x(8-6)=[18/2]x2=18. The producer surplus goes up by 18. E. The tariff will lead to deadweight loss, which means that total welfare will be smaller than it was before the tariff. This is because the consumer surplus went down by 44, and 18 of that went to the producers. The tariff will generate revenue for the government, which is just $2 tariff per unit x 6 units to tariff, which is $12. Of the 44 units that the consumer lost, 18 went to the producers, 12 went to the government, which leaves 14 units unaccounted for, which is the deadweight loss. Part II Free trade is a trade policy that allows traders to transact business without...
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...GSE-1003 Microeconomics Bernard C. Beaudreau Assignment No. 2 Question: One of the key principles in economics is the notion of a tradeoff. People are confronted with tradeoffs and hence are required to make choices. Describe two tradeoffs that you face in your everyday life and briefly describe the decision rule(s) that you use to make decisions in these cases. Tradeoff #1 ------------------------------------------------- You surely know, as a university teacher, that students have to do a lot of work outside of classes. In fact, students spend more time in books at home than in classes. Every day, I face a choice in whether I should study or do my leisure activities. As I look at those two options, I make a decision using simple decision rules. If I choose to do my homework and keep myself up to date in my courses, then I will probably have better grades at the exams and quizzes, but I won’t really like my evening and go to bed bored. However, if I occupy my time to my leisure activity, I’ll have a better evening, whether I go out with my friends or I pass some time watching sports on TV, but I’ll start being late in my courses and it will be hard to make up for all the time I wasted. To conclude, this trade-off is decided more by what I want now, versus what I later. Hence, I will often choose to study and make my homework, but still give myself a little brake once in a while. ------------------------------------------------- ------------------------------------------------- ...
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...Microeconomics – Homework #2 1. List/describe the determinants of price elasticity of demand. Availability of substitutes – When a product’s price increases, it’s demand may decrease if there is a similar product who’s price did not increase. Share of the consumer’s budget spend on the good – Higher price reduces quantity demand as the consumer’s budget will be too highly impacted. Length of adjustment period – The longer the adjustment period, the longer the consumer has to adjust to the change. The consumer has more time to look for a substitute. Elasticity estimates – Demand more elastic in long run. Consumers start to convert to other products over time. 2. Define inelastic and elastic demand; give an example of each. Inelastic – quantity almost unaffected by change in price. Gas –gas has increased in price over 300% in the last couple years, but still are pumping just as much into their cars now as they were back then, because it is a needed product. Elastic – Change in price has large effect on quantity demanded. Price increases, demand decreases. If a cheeseburger at McDonald’s goes from $1 to $4, demand for the product will decrease as most people will not be willing to pay that price. 3. What is the law of diminishing marginal utility? How does it apply to you? The more of a good a person consumes per period, the smaller the increase in total utility from consuming one more unit, other things constant. This applies to me while eating my...
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...Sales & Marketing Management CA 2 – Group Project (20%) ________________________________________________________________ Group Project • • • • • • Form groups of no more than 5 students to work on this project. A list of products and customer groups, is given on the next page. Discuss among your group members which product your group will choose. No two groups can do the same product. Choice is on a first-come-first-serve basis. Register your product with your lecturer by Lesson 2 Report Component 1. Research and briefly explain about this customer group you have selected. 2. Research and showcase your knowledge of your chosen product. 3. Explain how you intend to sell your product to this customer group. 4. Presentation materials Your report should be type-written and 1.5-spaced in 11-point (Arial or Times) font. You must produce a picture/visual of your chosen product to accompany the report. It must not exceed 1500 words (not inclusive of the presentation materials) This report is due on 11/6/2012, 1159AM. Presentation Component 1. Each group is given 20 minutes to make the sales presentation to the chosen customer group. A 10-mark penalty will be imposed for exceeding the time limit. 2. Every member in the team must present his/her part. Absentees without a valid reason will be given a zero grade. Presentations are scheduled for Lessons 11 and 12. Each group will be allotted a slot to present. Products 1 Photocopy machines 2 2-liter cars 3 Laptops 4 Mattress...
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...write the expression for marginal revenue: Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall • Microeconomics • Pindyck/Rubinfeld, 7e. 9 of 50 10.1 MONOPOLY A Rule of Thumb for Pricing Chapter 10: Market Power: Monopoly and Monopsony Note that the extra revenue from an incremental unit of quantity, ∆(PQ)/∆Q, has two components: 1. Producing one extra unit and selling it at price P brings in revenue (1)(P) = P. 2. But because the firm faces a downward-sloping demand curve, producing and selling this extra unit also results in a small drop in price ∆P/∆Q, which reduces the revenue from all units sold (i.e., a change in revenue Q[∆P/∆Q]). Thus, Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall • Microeconomics • Pindyck/Rubinfeld, 7e. 10 of 50 10.1 MONOPOLY A Rule of Thumb for Pricing Chapter 10: Market Power: Monopoly and Monopsony (Q/P)(∆P/∆Q) is the reciprocal of the elasticity of demand, 1/Ed, measured at the profit-maximizing output, and Now, because the firm’s objective is to maximize profit, we can set marginal revenue equal to marginal cost: which can be rearranged to give us (10.1) Equivalently, we can rearrange this equation to express price directly as a markup over marginal cost: (10.2) 11 of 50 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall • Microeconomics • Pindyck/Rubinfeld, 7e. Applying MR-MC Output and Pricing Chapter 10: Market Power: Monopoly and Monopsony ...
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...Principles of Microeconomics is an introductory course that teaches the fundamentals of microeconomics. This course introduces microeconomic concepts and analysis, supply and demand analysis, theories of the firm and individual behavior, competition and monopoly, and welfare economics. Students will also be introduced to the use of microeconomic applications to address problems in current economic policy throughout the semester. COURSE OBJECTIVES After studying this course the students should be able to: Understand the basic concepts of the subject. Understand the application of the tools of demand and supply for efficient resource allocation and profit maximization. Identify core economic issues related to business firms. Comprehend the benefits of market efficiency. GRADING PLAN TYPE Quizzes Assignments Final Projects Midterm examination Final term examination Total PERCENTAGE (%) 10 10 10 30 40 100 CALENDER OF ACTIVITIES WEEK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 CONTENTS TASKS/ACTIVITIES Introduction to Economics • Basic Concepts – I Class Introduction Introduction to Economics • Basic Concepts – II Utility Assignment 1 Due Demand Supply Quiz 1 Markets - I Markets - II Mid-Term Midterm Exam Market Analysis: shares, currency, and labor markets Market Failures and Imperfections The Fundamental Economic Problems Assignment 2 Due Costs and Revenues Analyzing Market Structure - I Quiz 2 Analyzing...
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...Econ 1 Professor Carter December 12, 2011 Microeconomics In My Daily Life Throughout my life, I have always been reading and hearing about economic issues and concepts, but I never thought about the impacts of economic models on my personal life. Before learning about microeconomic concepts, I always thought that a course in the field of Economics, would teach me theories that only apply to the economy of a nation as a whole and not to an individual’s life. However, there were a lot of concepts throughout this course that I found relative to my personal life. Among all the concepts that I have learned in the Microeconomics course, “Opportunity Cost”, “Sunk Cost”, and “Supply and Demand” have the most impact on my daily life. “Choice and Opportunity Cost” is one of the most important concepts of Microeconomics that I found it relative to my everyday life. Similar to many other students, limited time during the school semester, forces me to make choices about what to study, when to study, and how to estimate the opportunity cost of every choice. Applying opportunity cost concept in my day-to-day life helps me better schedule my study time. For instance, I usually choose to study during weekdays because the opportunity cost of studying on these nights is lower than studying on Friday or Saturday nights, when usually more exciting events are happening. On the other hand, if my alternative on weekend is to stay home and organize my closet and do my laundry, I would...
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...Phoenix ECO365 Brad Bennett March 2, 2009 Introduction The following paper will define economics, microeconomics, and the law of supply and demand. The paper will identify the factors leading to a change in supply and a change in demand, and will also analyze the basis for the trends in consumption patterns discussed in the article “As US Shoppers Retreat, Can World Thrive?” The author of the paper will analyze the article by considering the utility derived from the products mentioned in the mentioned article, and will describe what has occurred to change the demand for, or the supply of, the good or service. The paper will then conclude with the market prices of the products or services. Define Economics Economics is the research and study of income, production, land, investments, taxes, government spending and labor. Economics is a study of how people choose to earn and spend their resources. The choice needs to be made individually by people and countries about what goods and services they can purchase and which ones they need to delay. Resources are scarce and are pushing people and countries to make choices. Economics is studied from two perspectives. The first being governments of nations seek to maximize the production of countries. This perspective is referred to as macroeconomics. The second perspective is of individuals and firms; this perspective is known as microeconomics. Define Microeconomics Microeconomics refers to the study of economic activity...
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...and the environment that it functions in. It uses various economic theory and other quantitative methods to scrutinise a business organisation and the issues that influences the enterprise with the labour and its market. Question 1 Business Economics is a useful toolbox for understanding the business environment and making better decisions. Consider you are the managing director of a manufacturing company based in UK; describe the different aspects of the business that you should be looking at from an economics perspective in order to run the company efficiently. Consider both the microeconomics and macroeconomics perspectives. The entire business organisations around the globe have one similar goal and that is to increase the profit. By scrutinising the demand of the clients, supplying good quality and suitable supply, the profit can be maximised. Conversely there are various microeconomic and macroeconomic factors that affect this process. These factors significantly affect the sales and production level of a business organisation1. The following are few of the economic factors that affect the efficiency of a business organisation. All these factors are interconnected to each other. * Demand and supply: Two of the main factors that affect the efficiency of an organisation are demand and supply. The demand...
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...(Individual Assignment Week 2) ECO/365 12/09/13 Atlantis is a nice city that’s is well maintained and booming with young professionals and families alike. Good Life Management is the premier choice for tenants seeking two bedroom apartments and also is the only choice. Often times in the real estate rental industry rental apartments experience a higher degree of vacancy and Good Life is looking to reduce the vacancy rate from 28% to 15%. Lowering the amount of available units was no easy task for Good Life management and likely would not have been achieved with a solid understand of the principles of the micro and macroeconomics and the supply and demand curve. This simulation has taught the importance of economics and how the play an important part of everyday life. Micro and macroeconomics play a key role in the everyday lives of people and corporations. In the simulation in this weeks assignment Atlantis is a prime example of just how often people come into contact with situations with two important factors of economics. The two important factors are supply and demand and they affect everything that we as people do in everyday life. Understanding supply and demands makes consumers, the supplier and us, determine when it is best to buy and best to sell. Understand this principle enables us to make more informed purchasing and selling decisions. There are a number of real world examples of how micro and macroeconomic...
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...Microeconomics Paper One Renee Ingram Chamberlain College of Nursing Econ312: Principles of Economics Spring 2013 MICROECONOMICS 2 Every day individual consumers make choices for products they feel are needed in their lives. Whether out of comfort or necessity, the choices made can determine the standard of living for the individual. Research by McConnell, Brue, and Flynn (2012) argue, “Even though biologically people need only air, water, food, clothing and shelter,” once these basic needs are met, the other items desired are only to make one’s life more comfortable (McConnell, Brue, & Flynn, 2012). However, the choices made by these individuals have one obstacle, and that is how does one chose to use limited resources so as to satisfy these unlimited wants. This is where the idea of economics comes into play. Economics is defined as the basic study of supply and demand of goods in a market structure, and how this market is driven by self-interests of individual consumers for their unlimited wants. For consumers, McConnell, Brue, and Flynn (2012) suggest, “Individuals look for and pursue opportunities to increase their utility---they allocate their time, energy, and money to maximize their satisfaction” (McConnell, Brue, & Flynn, 2012). Since goods or services are limited, the self-interest of individuals will drive them to choose one product or service over another in order to maximize their comfort. Bearing in mind the above stated...
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...1. Coffee bun market Research and certified by economists and scholars, market structure has 4 types of market. It comprises of perfect, monopolistic, oligopoly and monopoly. Each market has its own characteristics and features which the businessman are required to master so that they are able to apply the business strategy sophisticatedly. First of all, it is perfect competition. In this market type, there are a lot of small firms and customers. Thus, both sides do not have any effect on price. Besides, the products sold in this market are identical to the sellers. And because product is homogenous and consumers do not care the brand name, it leads to a strong competition among the sellers to gain the most attention from consumers. Moreover, the entry of market is free. There is almost no object to prevent new firms from entering the market. So it is very easy for them to come in and compete with the existing firms. And if they feel the profits from the business not as much as they want, they also leave the market without prevention. One more thing is that the information about price and products in the market are observed and updated well by both sellers and buyers, so they know which suppliers are offering same products with lower price than another. For example, selling cabbage belongs to perfect competition where the sellers and buyers update their own information about price daily. And the buyer can choose any seller which they provide the lower price than another in...
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...three classes represented by farmers, landowners and the sterile class. Malthus, Sismondi and Marx in the 19th century dealt with macroeconomic problems. Walras, Wicksell and Fisher were the modern contributors to the development of macroeconomic analysis before Keynes. Certain economists, like Cassel, Marshall, Pigou, Robertson, Hayek and Hawtrey, developed a theory of money and general prices in the decade following the First World War. But credit goes to Keynes who finally developed a general theory of income, output and employment in the wake of the Great Depression. Contents: Nature of Macroeconomics Difference between Microeconomics and Macroeconomics Dependence of Microeconomic Theory on Macroeconomics Dependence of Macroeconomics on Microeconomic Theory Macro Statics, Macro Dynamics and Comparative Statics Transition from Microeconomics to Macroeconomics Stock and Flow Concepts 1. Nature of Macroeconomics:________________________________________ Macroeconomics is the study of aggregates or averages covering the entire economy, such as total employment, national income, national output, total investment, total consumption, total savings, aggregate supply, aggregate demand, and general price level, wage level, and cost structure. In other words, it is aggregative economics which examines the interrelations among the various aggregates,...
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...Article Analysis University of Phoenix ECO / 365 Liliana Fargo November 1, 2009 Article Analysis Many consumers purchase products to use them because they like the product, it fits their lifestyle or just for the simple fact of it being affordable. The consumers hardly ever look at the purchase habits of other consumers that is the company’s job to do. There are many facets that a company has to look at, such as the trends and consumption patterns of the consumers that consumers are not too aware of. Taking all of this into consideration, the purpose of this paper will be to define economics, define microeconomics, define law of supply, as well as define the law of demand, ad to also identify the factors that lead to a change in supply and a change in demand. What is economics? Economics is more than just the “economy.” Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society (Colander, 2008). Merriam-Webster defines economics in a simpler way as a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services (2009). The key word in the definition given by Colander is coordinate. In the study of economics there are three central coordination problems any economy must solve, which are: what, and how much, to produce; how to produce it; and for whom to produce it...
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