...Supply and Demand Simulation Joseph Silva Eco 365 FARIBA KHERADMAND 5/6/14 In this paper we will be observing the key points of microeconomics and how it relates to week twos supply and demand simulation. We shall go over and review the basic principals on how the supply and demand curve works and is effected in certain senarios. Also in this summary we will go over the affects on equlibrium price, quantiy, and decision making. Finally we will talk about the firms stategies how it relates to the senario. The senario in this simulation brings you to a new city called Atlantis where you are a property manager of some two bed room apartments. Your job is to manage the rental rates and make sure things don’t get out of hand in reguads to shifts in the demand and supply. The first topic we shall review in this paper is the miro and macro economic principles that came up in the simulation. From the the microeconomy stand point the two concepts that came up were the supply and demand as well as price cellings. The supply and demand was the most obvious one to choose. In the simulation you had to figure out how much the supply and demand curve shifted. In most cases the demand curve was always shifting due to the preferences of the simulation always changing. If the population increased then the demand for the apartments increased. Same thing if the preference changed it could cause and increased affect or a decreased...
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...Long-term Investment Decisions Introduction Investment is the process of creating or purchasing possessions with the aim of gaining benefits in future. Therefore, making long-term objectives or decisions is necessary for any business that relates to investment. For the organization to yield returns and gain good performance in the market it must make good use of the financial resources available to acquire buildings, machines, or other assets that will enable smooth operation within the organization for a long period. A planning that the management needs to consider involves accessing many issues that face the business, and finally decide which issue to invest on depending on its urgency in the business. The issues that are encountered in the business vary depending on attitude, circumstances to risk, and particular age. Therefore, the management must take time to think about the issues before making decisions to avoid possibly costly mistakes. A Plan Used By Managers When Selecting Pricing Strategies In Order To Attain Inelastic In Their Products. It’s very crucial for managers to price their product in order to attain the potential or current customers in the market. As a result, the decision made by the management will determine the future progress or success of the business. For that reason, major strategies like employing pricing, safeguarding inelasticity in products, and many other strategies need to be established to ensure that products are retained by customers...
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...McDonalds Business Proposal Paper Dorrina Martini ECO/561 February 3, 2012 David Francom McDonalds Business Proposal McDonalds has always been a company that shares in the happiness of a child. Recently after taking my own children to McDonalds, I have found that there is not a breakfast option for children. McDonalds should add a happy meal option to the breakfast menu. Current demands by consumers are to add a happy meal option allowing parents to purchase child sized portions of breakfast items. This option could help McDonalds to increase profits by attracting more consumers. Shareholder reports show a quarterly cash dividend per share increase of 15% and annual dividend of $2.80 per share. Comparable sales grew 5.6%. Cash by operations increased $808 million to $7.2 billion. Return to shareholders $6.0 billion (McDonald’s.com, 2012). Elasticity of demand and the market structure for the company’s good or service. * Profit-maximizing quantity is figured by determining the elasticity of the product. * By dividing the change in quantity sold by the corresponding change in price, you get a coefficient that tells you how elastic or inelastic your product is – with coefficients between zero and one being inelastic and coefficients greater than one being elastic. * The elasticity of this particular product is determined by the individual instead of the population. Considering this fact, fast food is considered an elastic good. An elastic good is more of...
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...Long-Term Investment Decisions Tiffant Lewis Strayer University Dr. Xiaodong Wu ECO 550 March 9, 2014 Introduction One of the most important long term decisions for any business relates to investment. Investment is the purchase or creation of assets with the objective of making gains in the future. Typically investment involves using financial resources to purchase a machine/building or other asset, which will then yield returns to an organization over a period of time. Planning investments involves thinking about a range of issues that have a bearing on where you ultimately decide to put your money. These issues will vary according to your particular age, circumstances and attitude to risk, and thinking about them carefully before you start making commitments will help you avoid some potentially costly mistakes. 1. Outline a plan that managers in the low-calorie microwaveable food company could follow when selecting pricing strategies for making their products as inelastic as possible. Provide a rationale for your response. Pricing the product to reach out the current and potential customers is crucial for the managers. It is their understanding and decisions that are going to determine the success of any business. A major strategy that ensures that customers are retained with the product is to make the product inelastic employing pricing and other strategies. However, before we explain the strategies to make low-calorie microwavable food inelastic, we must understand...
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...Eco 550 Long-Term Investment Decisions Tiffant Lewis Strayer University Dr. Xiaodong Wu ECO 550 March 9, 2014 Introduction One of the most important long term decisions for any business relates to investment. Investment is the purchase or creation of assets with the objective of making gains in the future. Typically investment involves using financial resources to purchase a machine/building or other asset, which will then yield returns to an organization over a period of time. Planning investments involves thinking about a range of issues that have a bearing on where you ultimately decide to put your money. These issues will vary according to your particular age, circumstances and attitude to risk, and thinking about them carefully before you start making commitments will help you avoid some potentially costly mistakes. 1. Outline a plan that managers in the low-calorie microwaveable food company could follow when selecting pricing strategies for making their products as inelastic as possible. Provide a rationale for your response. Pricing the product to reach out the current and potential customers is crucial for the managers. It is their understanding and decisions that are going to determine the success of any business. A major strategy that ensures that customers are retained with the product is to make the product inelastic employing pricing and other strategies. However, before we explain the strategies to make low-calorie microwavable food inelastic...
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...www.cambridge.org/micro4mbas McKENZIE: MICROECONOMICS FOR MBAS PPC CMYBLK ................................................................................................................ 10 Monopoly power and firm pricing decisions If monopoly persists, monopoly will always sit at the helm of government … its bigness is an unwholesome inflation created by privileges and exemptions which it ought not to enjoy. If there are men in this country big enough to own the government of the United States, they are going to own it. Woodrow Wilson That competition is a virtue, at least as far as enterprises are concerned, has been a basic article of faith in the American Tradition, and a vigorous antitrust policy has long been regarded as both beneficial and necessary, not only to extend competitive forces into new regions but also to preserve them where they may be flourishing at the moment. G. Warren Nutter and Henry Alder Einhorn t the bottom of almost all arguments against the free market is a deep-seated concern about the distorting (some would say corrupting) influence of monopolies. People who are suspicious of the free market fear that too many producers are unchecked by the forces of competition, but instead hold considerable monopoly power or control over market outcomes. Unless the government intervenes, these firms are likely to exploit their power for their own selfish benefit. This theme has been fundamental to the writings of economist John Kenneth Galbraith: The...
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... Chapter 21 – Getting Employees to Work in the Firm’s Best Interests Chapter 22 – Getting Divisions to Work in the Firm’s Best Interests Chapter 23 – Managing Vertical Relationships Managerial Economics, 3rd Edition Luke M. Froeb; Brian T. McCann; Michael R. Ward; Mikhael Shor http://en.wikipedia.org/wiki/Managerial_economics / http://www.coursehero.com/sitemap/schools/501-FIT/courses/1467122-ECONBUS-5421/ http://www.coursehero.com/sitemap/states/Massachusetts/ Managerial economics is the "application of the economic concepts and economic analysis to the problems of formulating rational managerial decisions".[1]It is sometimes referred to as business economics and is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units. As such, it bridges economic theory and economics in practice.[2] It draws heavily from quantitative techniques such as regression analysis, correlation and calculus.[3] If there is a unifying theme that runs through most of managerial economics, it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research, mathematical programming, game theory for strategic decisions,[4] and other computational methods.[5] Managerial decision areas include: • assessment of investible funds • selecting business area • choice of product • determining optimum output ...
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...Institute The McKinsey Global Institute (MGI), established in 1990, is McKinsey & Company’s business and economics research arm. MGI’s mission is to help leaders in the commercial, public, and social sectors develop a deeper understanding of the evolution of the global economy and to provide a fact base that contributes to decision making on critical management and policy issues. MGI research combines two disciplines: economics and management. Economists often have limited access to the practical problems facing senior managers, while senior managers often lack the time and incentive to look beyond their own industry to the larger issues of the global economy. By integrating these perspectives, MGI is able to gain insights into the microeconomic underpinnings of the long-term macroeconomic trends affecting business strategy and policy making. For nearly two decades, MGI has utilized this “micro-to-macro” approach in research covering more than 20 countries and 30 industry sectors. MGI’s current research agenda focuses on three broad areas: productivity, competitiveness, and growth; the evolution of global financial markets; and the economic impact of technology. Recent research has examined a program of reform to bolster growth and renewal in Europe and the United States through accelerated productivity growth; Africa’s economic potential; debt and deleveraging and the end of cheap capital; the impact of multinational companies on the US economy; technology-enabled business trends;...
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...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 from the viewpoint of an individual firm or groups of individuals. Microeconomics studies how firms...
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...Economies of scale Economies of scale are the cost advantages exploited by expanding the scale of production in the long run. The effect is to reduce long run average costs over a range of output. These lower costs represent an improvement in productive efficiency and can feed through to consumers in lower prices. But economies of scale also give a business a competitive advantage in the market-place. They lead to lower prices and higher profits! The table below shows a simple representation of economies of scale. We make no distinction between fixed and variable costs in the long run because all factors of production can be varied. As long as the long run average total cost (LRAC) is declining, economies of scale are being exploited. Long Run Output (Units) | Total Costs (£s) | Long Run Average Cost (£ per unit) | 1000 | 12000 | 12 | 2000 | 20000 | 10 | 5000 | 45000 | 9 | 10000 | 80000 | 8 | 20000 | 144000 | 7.2 | 50000 | 330000 | 6.6 | 100000 | 640000 | 6.4 | 500000 | 3000000 | 6 | Returns to scale and costs in the long run The table below shows a numerical example of how changes in the scale of production can, if increasing returns to scale are exploited, lead to lower long run average costs. | Factor Inputs | | Production | | Costs | | (K) | (La) | (L) | | (Q) | | (TC) | (TC/Q) | | Capital | Land | Labour | | Output | | Total Cost | Average Cost | Scale A | 5 | 3 | 4 | | 100 | | 3256 | 32.6 | Scale B | 10...
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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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...Over the course of this class we will cover the following topics: Principles of Economics (week 1) Thinking Like an Economist (week 1) Supply and Demand (week 2) Market Efficiency (week 3) Consumer Surplus (week 2) Your assignment for the final paper is to write a 2 to 3 page paper (double spaced) about how 3 of the above concepts applies to your daily life. For example how does consumer surplus impact the decisions you make when shopping for groceries? Be creative and think hard about these important concepts. Please use ProQuest and cite at least one source in text. Your paper will be due on Saturday night of the last week of the module. Submit your paper to Smarthinking. Attach their feedback along with your final submission. Smarthinking has about a 48 hour turn-around time so plan accordingly. Day to Day Concepts Perla Gomez ECN220 September 7, 2013 Sheneman Day to Day Concepts The thought of Economics can be a scary one. It is full of big words, difficult concepts, and challenging theories that can be hard to understand. The concepts that underlie Economics are scary ones and at some point were difficult to understand. However, I found that I could apply most of these concepts to my daily life. Supply and Demand, Consumer Surplus, and Thinking Like an Economist are all part of my day to day activities. I use them so often that I don’t even realize I am using them or taking advantage of them. Even if you have no idea what these are, chances...
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...Week 1 Knowledge Check Concepts Business Systems Productive Resources Law of Supply Law of Demand Calculating Profit Calculating Profitability Effect of the Business Model Mastery 100% 100% 67% 100% 100% 100% 100% Questions 1 2 3 Score: 20/21 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Concept: Business Systems Concepts Business Systems Mastery 100% Questions 1 2 3 1.What are the three components that make up a business system? A. Business commerce, business organization, business occupation B. Business organization, business management, business exchange C. Business commerce, business organization, business market D. Business market, business management, business organization Correct! The three components that make up a business system are as follows: business commerce, business occupation, and business organization. 2.Which term refers to the total money or assets of a business? A. Competitive advantage B. Sales revenue C. Capital D. Wealth Correct! “Profit that is kept in a company and invested in its business increases its capital, the total monetary value of its financial assets such as cash, property, land, stock, patents, and brand name” (Jones, 2007, p. 8). . 3.Information technology, e-commerce, human resource management, and procurement are included in what type of value chain function in a business? A. Tertiary function B. Complimentary function C. Primary value function D. Secondary value...
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...Question 2: Explain the concept of a concentration ratio. Is the concentration ratio in a monopolistically competitive industry likely to be higher than for a perfectly competitive industry? Explain your answer (6 marks) Suppose the minimum point on the Long-run Average Cost (LRAC) curve of a soft drink firm’s lemonade is $1 per litre. Under conditions of monopolistic competition, will the price of a litre bottle of lemonade in the long-run be above $1, equal to $1, less than $1 or impossible to determine. Illustrate your answer using a diagram (2 marks for diagram plus 2 marks for explanation) Question 5: Explain the impact of external costs and external benefits on resource allocation; (2.5 marks) Why are public goods not produced in sufficient quantities by private markets? (2.5 marks) Which of the following are examples of public goods (or services)? Delete the incorrect option The Judicial system--------------------------------------------------------------------------Yes/No Pencils --------------------------------------------------------------------------------------Yes/No The quarantine service----------------------------------------------------------------------Yes/No The Great Wall of China-------------------------------------------------------------------Yes/No ...
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...Quiz1 Question 1 3 out of 3 points Correct The flat-screen plasma TVs are selling extremely well. The originators of this technology are earning higher profits. What theory of profit best reflects the performance of the plasma screen makers? Answer Selected Answer: innovation theory of profit Correct Answer: innovation theory of profit Question 2 3 out of 3 points Correct The primary objective of a for-profit firm is to ___________. Answer Selected Answer: maximize shareholder value Correct Answer: maximize shareholder value Question 3 3 out of 3 points Correct Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include: Answer Selected Answer: requiring officers to own stock in the company Correct Answer: requiring officers to own stock in the company Question 4 3 out of 3 points Correct The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn? Answer Selected Answer: Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return. Correct Answer: Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return. Question 5 0 out of...
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