Writing

Week 1 – Opportunity Costs & emand v. Quantity Demanded

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Week 1

1.Opportunity Costs

What do economists mean by “opportunity cost?”  What are your opportunity costs in taking this course?

2.Demand v. Quantity Demanded

What is the difference between a decline in the quantity demanded and a decline in demand? Give an example of something that you now buy less of. Is it an example of a decline in the quantity you demand or a decline in your demand?

Discussion 1,2,3 – Prices serve a rationing function

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Business Finance – Economics HOMEWORK

-250 words each discussion

-2 references each discussion

Discussion 1:

Watch the video clip from  Jingle All the Way .   (View  Transcript.)   

Consider the following: Prices serve a rationing function. When quantity demanded exceeds quantity supplied, prices rise to alleviate the shortage. When quantity supplied exceeds quantity demanded, prices fall to alleviate the surplus. However, when prices are inflexible, shortages and surpluses persist. Other rationing mechanisms must develop.

1. Using demand and supply analysis, describe a specific situation that you have witnessed where a shortage occurred. Why were prices unable to adjust in this market?

2. Combining what you learned from your readings as well as from the video clip, what other rationing functions could develop to alleviate that shortage?

Citation: Barnathan, M., Columbus, C., Radcliffe, M. (Producers), & Levant, B. (Director). (1996). Jingle all the way [Motion picture]. United States: Twentieth Century Fox.

Discussion 2

Watch the video clip from  Bart Gets an Elephant.   (View  Transcript.) 

Consider the relationship between price elasticity of demand and total revenue, and why Homer didn’t make the smartest business decision when raising the price of admission. For this week’s discussion question, you should pick two products: one that is relatively price inelastic and another that is relatively price elastic. You can determine a product’s relative price elasticity by considering the Determinants of the Price Elasticity of Demand listed in your textbook. You should begin by defining your product in terms of the determinants and then describe how increases in the price would affect total revenue.Would it make good business sense to be the one producing and selling these products? Why or why not?

Discussion 3

Watch the video clip from  Cool Hand Luke .   (View  Transcript.)   

Consider how marginal benefits and marginal costs fit into Luke’s decision, and how the concept of diminishing marginal utility is at work as Luke eats more and more eggs.

a. What is driving his marginal benefits to continue to exceed his marginal cost?

b. Consider how Luke’s decision would change if he had to actually pay for each egg he eats. How would this affect his choice to continue eating?

c. Consider the concept of marginal utility per dollar spent (i.e. MU/P) and how it affects the consumption decisions we make. Think of a time when you ended up buying your second choice instead of your first choice. Explain how that decision was made because it wasn’t only about marginal utility for you, but about marginal utility per dollar spent.

Citation: Carroll, G. (Producer), & Rosenburg, S. (Director). (1967). Cool Hand Luke [Motion picture]. United States: Warner Brothers.

Opportunity Cost – One of the major concerns related to the US economy

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Opportunity Cost

PROMPT: 

One of the major concerns related to the US economy at the moment is INFLATION. On this Discussion you will start exploring this topic.  As so many economists say “ uncontrolled inflation is too much money chasing the same goods and services” Here you will research the forces behind inflation. Make sure you leave political views not influence your assessments of the facts. This is not even a Political Science course. Lets analyze the facts as they are. 

  • Under the Trump administration, the US Federal Government, approved a never seen before 2 trillion dollars Stimulus Package in response to the concerns about economic side effects COVID-19 instilled in our society. A significant part of the Stimulus Package was designated to individuals, including unemployment compensation sent to millions of people as well as PPP for business in different industries. As the Biden administration took office, in January 2021 a new Stimulus Package was signed and approved to inject another 1.9 trillion dollars into the economy. As part of the new stimulus plan, the deadline for several benefits associated to the 1st Stimulus Package were postponed and continued for longer periods of time as originally planned. The great majority of the stimulus was approved and released before the COVID 19 vaccination was in place. Under the Biden administration stimulus efforts took place at the beginning of COVID 19 vaccination and continues as of right now. Several Economists and Policy makers have argued that this injections of money created one of the forms of inflation Demand Pull inflation. However, in parallel withthe inflation created by the Stimulus there was another one happening at the same time: Cost Push Inflation
  • Question 1) What is Cost Push Inflation? Explain in detail and Provide source ( 10 points) How has the disruption of supply chain during the Pandemic pressured up the level of inflation? Please find a real case of either a firm, corporation or institution that has been affected by the disruption of the supply chain in their industry and explain their experience and how the situation pressured the prices they charge for their own goods and or services to a higher level. Present the evidence, explain and provide the source. (20 points) You can use up to 2 sources
  • Question 2) How has the labor shortage that started during the Pandemic in March 2020 and lasted all the way to the beginng of 2022 pressured up the level of inflation ? Please find a real case of either a firm, corporation  that has been affected by the disruption of the labor supply and explain their experience and how the situation pressured the prices they charge for goods and or services they offer ? Present the evidence, explain and provide the source. (20 points) You can use up to 2 sources
  • Question 3) Since the last quarter of 2022 several major employers in the US started announcing rounds of lay offs. Among them, Amazon, Disney Company, Morgan Stanley among others. Goldman Sachs last week indicated last week that 3,200 jobs would be eliminated. What is the opportunity cost of the high inflation ? Explain in detail provide evidence. (20 points)
  • Question 4) Bibliography (10 points)

 

 

potential useful resource: https://www.reuters.com/markets/us/tech-firms-wall-street-lead-job-cuts-corporate-america-2023-01-11/