ECO 561 Week 2 Knowledge Check
January 25, 2016 | By nagarajlee15 |
For more course tutorials visit www.uophelp.com 1. Purely competitve firms increase total revenue by 2. What are two ways for a competitve firm to determine the optimal level of production, that is, the level of production that will maximize profit or minimize losses? 3. Suppose that a firm determines that its marginal revenue is greater than its marginal cost, it would be better to 4. It is profitable for a firm to continue employing additional resources as long as 5. As additional units are produced, the marginal revenue product falls for all firms because marginal product decreases. For firms operating in industries that are not perfectly competitve, marginal revenue product also falls because 6. All things being equal, an increase in demand for a product, 7. Marginal cost can be defind as the additon to---------------------of one more unit of output. 8. If a firm stars small and, over time, builds successively larger plant sizes or adds additonal work space in an office, average total costs are most likely to 9. Demand for resources, including labor, depend on its 10. The primary difference between increasing-and decreasing-cost industries lies in 11. When adding labor or other factors of production, buisnesses may see their total product rise, but see their per-unit increase in return for each additional unit diminish. This phenomenon 12. In the short run, firms should shut down if 13. When you are considering the value of a resource in its next best use, you are considering its 14. Of the four major market structures-perfectly competitive, monopolistic competition, oligopoly, monopoly-reducing variable costs of production
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For more course tutorials visit www.uophelp.com 1. Question : (TCO A) Suppose you are hired to manage a small manufacturing facility that produces Widgets. (a.) (15 points) You know from data collected on the Widget Market that market demand and market supply have both increased recently. As manager of the facility, what decisions should you make regarding production levels and pricing for your Widget facility? Remember that supply and demand are about the market supply and market demand, which is bigger than your own company. You are being given data on supply and demand for the whole market and are being asked what effect that has on you as a small part of that market. (b.) (15 points) Now, suppose that following the supply and demand changes in (a), a substitute good goes up in price, and your costs of production increase. What new decisions will you make regarding production levels and pricing for your Widget facility? 2. Question : (TCO B) Here is some data on the demand for marshmallows: Price Quantity $10 100 $ 8 300 $ 6 700 $ 4 1300 $ 2 2200 (a.) (15 points) Is demand elastic or inelastic in the $6-$8 price range? How do you know?
For more course tutorials visit www.uophelp.com Let's discuss one of the most important areas of economics, namely the use of leading economic indicators to forecast the future direction of the macroeconomy. What websites are helping you gain a better understanding of where the economy is heading in the next 12 months?
For more course tutorials visit www.uophelp.com What is the appropriate balance between private and public (i.e., government) activity? Think of a case where the government has intervened (or it was suggested that government intervene) in a previously private market (e.g. Chrysler, tariffs on Japanese luxury cars, the airline industry, etc). What other examples can you think of? Using a marginal benefit/marginal cost analysis, support or argue against the intervention.
For more course tutorials visit www.uophelp.com What are the monetary policies required to fight unemployment? What about those required to fight inflation? What are some of the downside risks and potential problems involved when using monetary policy?
For more course tutorials visit www.uophelp.com What fiscal policies are required to fight unemployment? Which ones are required to fight inflation? What are some of the downside risks and potential problems involved when using fiscal policy?
For more course tutorials visit www.uophelp.com ECON545: Project 2—Macroeconomic Analysis The Macroeconomic Paper tests your ability to apply economic principles to a business decision considering the impact of macroeconomic variables. Select one situation from the items outlined below: A to D. Complete the paper on the selected situation as specified below. The completed paper is a professional report and is due in Week 6 (260 Points). See the grading rubric at the end of this document. Be sure to use the DeVry library to find data, and avoid questionable sources, such as Wikipedia. Each of the scenarios has a list of Macroeconomic areas you are to address, with sources, in your answer. Briefly you are to research and show how these apply to your scenario: GDP growth rate (20 points), the business cycle (30 points), fiscal policy and level of unemployment (50 points), monetary policy and interest rates (50 points), international trade (40 points), and demographics (20 points). Situation A Rick, your friend, runs a small manufacturing plant that produces parts for the auto industry. Rick is thinking of expanding his operations to meet the increasing demand from car manufacturers. Hearing of your taking this course in business economics, he asks you for advice on how to go about making the expansion decision. At first you are reluctant to give investment advice, but then you happen to read the piece “U.S. Auto Sales Estimates Cut as Confidence Slows Rebound” on page 634 of the textbook. You suddenly realize that Rick needs to take a number of macroeconomic variables into consideration for the expansion decision. You decide to research the economy in terms of GDP growth rate, interest rates, level of unemployment, the business cycle, fiscal policy, monetary policy, international trade, and demographics. You want to provide Rick with the most informed advice possible. Situation B Your neighbor Cindy wants to start a contracting business for installing solar panels. She has heard of the cost savings that households and businesses can make each year by installing solar panels on their roofs. Cindy has also heard of government incentives for installing solar panels. Being concerned about the environment and wishing to reduce pollution, Cindy thinks installing solar panels also serves a good social purpose. But she does not want to risk her life savings on a venture that might not succeed or become profitable enough. After hearing from you about taking this course in business economics, she decides to ask you for advice. At first you are hesitant to give investment advice. Then you read the piece “Postal Service Considering Cutt
For more course tutorials visit www.uophelp.com Do a little research about foreign exchange traders. It's a big business; how do they make money? What is the relationship between FX rates and interest rates?
For more course tutorials visit www.uophelp.com The healthcare sector is often cited as being fraught with just about every economic imperfection that is known to humankind. Can you identify and briefly describe ONE of these imperfections? Do you know of any examples?
For more course tutorials visit www.uophelp.com Scour the national media for a credible macroeconomic current issue (many good sources are available online) in which Chapters 19-21 is at the heart of the matter. Summarize your article for your colleagues and attach a link to your article. Make sure you appropriately refer to the textbook sections that apply to your chosen article.
For more course tutorials visit www.uophelp.com Review and chose a firm of your choice provided by your instructor. Is this firm a monopoly? In what ways could it be considered a monopoly? What markets are involved? What anti-trust legislation would apply? Is anti-trust legislation "fair" to your chosen firm? Why or why not?
For more course tutorials visit www.uophelp.com Have you ever been involved in a merger or acquisition? If so, tell us about your experiences. If not, comment on this week's tutorial, "The Private Sector."
For more course tutorials visit www.uophelp.com Name some of the ways firms attempt to control their costs. How does your firm control costs? The key here in keeping this question interesting is that reducing the workforce or having one person do the work of three people are not the only ways to control costs. I'm looking for more creative ways. Maybe you can think of some that your firm is not currently using. Be creative here.
For more course tutorials visit www.uophelp.com Why is marginal analysis important in economics? How do the tutorials Basics of Marginal Analysis and Understanding and Applying Marginal Analysis at the end of this week's lecturereinforce the concepts of marginal analysis? How can any firm find the right production level which guarantees maximum profit (or minimum loss)?
For more course tutorials visit www.uophelp.com What are your thoughts about minimum wage legislation? What kind of a price-control policy is this? Who gains? Who loses? Are there alternatives to this legislation for achieving the same policy objectives? What role do demand and supply elasticities play in determining outcomes?
For more course tutorials visit www.uophelp.com What is the difference between a change in demand versus a change in quantity demanded? A change in supply versus a change in quantity supplied? Why is it so important to differentiate between these similar-sounding terms?
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