BUSI 620 Week 2 Questions for Critical Thinking 2

BUSI 620 Week 2 Questions for Critical Thinking 2

Business 620 Critical Thinking Two

Salvatore’s Chapter 4: Discussion Questions: 8 and 10, 11.

Problems: 3(a) and (b), 7, 9, and 14, 15.

 

Froeb et al.’s Chapter 6:

Individual problems: 6-1, 6-3, and 6-5.

 

Salvatore’s Chapter 5:

Problems: 8, 15(b) and (c), and appendix problem 2 (p. 215).

 

 

 

Discussion Question 8: If the price increase by 10 percent by how much does the quantity of household

a) natural gas and

b) electricity change in the short run and the long run? (Hint: use the price-elasticity values).

Discussion Question 10: Agricultural commodities are known to have a price-inelastic demand and to be necessities. How can this information allow us to explain why the income of farmers falls

a) After a good harvest?

b) In relation to the incomes in other sectors of the economy?

 

Discussion Questions: 11.

Suppose that the cross-price elasticity of demand between McIntosh and Golden Delicious apples is 0.8 between apples and apple juice is 0.5 between apples and cheese is -0.4 and between apples and beer is 0.1 what can you say about the relationship between each set of commodities

 

Problem 3: Starting with the estimated demand function for Chevrolets given in Problem 2, assume that the average value of the independent variables changes to N=225 million, I=12,000, PF=10,000, PG=100 cents, A=250,000 and PI=0.

a) Find the equation of the new demand curve for Chevrolets.

b) Plot this new demand curve, D’C, and, on the same graph, plot the demand curve for Chevrolets, DC, found in Problem 2(d).

Problem 7: The total operating revenues of a public transportation authority are 100 million while its total operating costs are 120 million. The price of a ride is 1, and the price elasticity of demand for public transportation has been estimated to be -0.4. By law, the public transportation authority must take steps to eliminate its pricing deficit.

a) What pricing policy should the transportation authorty adopt? Why? (b)

b) What price per ride must the public transportation authority charge to eliminate the deficit if it cannot reduce costs?

Problem 9: A researcher estimated that the price elasticity of demand for automobiles in the United States is -1.2, while the income elasticity of demand is 3.0. Next year, U.S. auto makers intent to increase the average price of automobiles by 5 percent, and they expect consumers’ disposable income to rise by 3 percent.

a) If sales of domestically produced automobiles do expect U.S auto makers to sell next year?

b) By how much should domestic auto makers increase sales by 5 percent next year?

 

Problem 14: Suppose that a firm maximizes its total profits and has a marginal cost of production of 8 and price elasticity of (-) 3. Find the price at which the firm sells the product.

Problem15.

The research department of the Corn Flakes Corporation CFC estimated the following regression for the demand of the cornflakes it sells:

QX = 1.0 – 2.0P X + 1.5I + 0.8P Y – 3.0P M + 1.0A

Where QX = sales of CFC cornflakes, in millions of 10- ounce boxes per year

P X = the price of CFC cornflakes, in dollars per 10- ounce box

I = personal disposable income, in trillions of dollars per year

P Y = price of competitive brand of cornflakes, in dollars per 10- ounce box

P M = price of milk, in dollars per quart

A = advertising expenditures of CFC cornflakes, in hundreds of thousands of dollars per year

This year, P X = 2, I = 4, P Y = 2.50, P M = 1, and A = 2.

Froeb et al.’s Chapter 6:

Individual

problems: 6-1, 6-3, and 6-5.

 

Individual problem 6-1: George has been selling 5,000 T-shirts per month for 8.50. When he increased the price to 9.50 he sold only 4,000 T-shirts.

a) What is the demand elasticity?

b) If his marginal cost is 4 per shirt, what is his desired markup and what is his initial actual markup?

c) Was raising the price profitable?

 

Individual problem 6-3: To conduct an experiment, AMC increases movies tickets from 9 to 10 and measured the change in ticket sales. Using the data over the following month, they concluded that the increase was profitable. However, over the subsequent months, they changed their monds and discontinued the experiment. How did the timing affect their conclusion about profitability of increasing prices?

 

Individual problem 6-5: An end-of-aisle price promotions changes the price elasticity of a good from -2 to -3. If the normal price 10,what should be the promotional price be?

 

Salvatore’s Chapter 5:

Problems: 8, 15(b) and (c), and appendix problem 2 (p. 215).

 

Problem 8: In a study published in 1980, B.B. Gibson estimated the following price and income elasticities of demand for six types of public goods.

 

a) Do these public goods conform to the law of demand? For which public goods is demand price elastic?

b) What types of good are these public goods?

c) If the price or cost of college and university education increased by 10% and, at the same time, incomes also increased by 10%, what would be the change in the demand for college and university education?

Problem 15: Starting with the data from Problem 6 and the data of the price of a related commodity for the years 1986 to 2005 given below, we estimated the regression for the quantity demanded of a commodity (which we now relabel Qx), on the price of the commodity (which we now label Px), consumer income (which we now label Y), and the price of the related commodity (Pz), and we obtained the following results

b) Evaluate the above regression results

c) What type of commodity is Z? Can you be sure?

 

Appendix problem 2:

a) Estimate the regression in Problem 5 based on Table 5-6 using Excel’s regression function in the Data Analysis menu.

b) Using the coefficients found in the regression estimate, enter a formula based in cells C6 through J6 to forecast the sales when quality control goes from 2 million to 9 million a year.

c) Graph both the actual data and the forecast using the graphing tools. Does the forecast vary much from the actual data

Important information for writing discussion questions and participation

Welcome to class

Hello class and welcome to the class and I will be your instructor for this course. This is a -week course and requires alot of time commitment, organization, and a high level of dedication. Please use the class syllabus to guide you through all the assignments required for the course. I have also attached the classroom policies to this announcement to know your expectations for this course. Please review this document carefully and ask me any questions if you do. You could email me at any time or send me a message via the “message” icon in halo if you need to contact me. I check my email regularly, so you should get a response within 24 hours. If you have not heard from me within 24 hours and need to contact me urgently, please send a follow up text to

I strongly encourage that you do not wait until the very last minute to complete your assignments. Your assignments in weeks 4 and 5 require early planning as you would need to present a teaching plan and interview a community health provider. I advise you look at the requirements for these assignments at the beginning of the course and plan accordingly. I have posted the YouTube link that explains all the class assignments in detail. It is required that you watch this 32-minute video as the assignments from week 3 through 5 require that you follow the instructions to the letter to succeed. Failure to complete these assignments according to instructions might lead to a zero. After watching the video, please schedule a one-on-one with me to discuss your topic for your project by the second week of class. Use this link to schedule a 15-minute session. Please, call me at the time of your appointment on my number. Please note that I will NOT call you.

Please, be advised I do NOT accept any assignments by email. If you are having technical issues with uploading an assignment, contact the technical department and inform me of the issue. If you have any issues that would prevent you from getting your assignments to me by the deadline, please inform me to request a possible extension. Note that working fulltime or overtime is no excuse for late assignments. There is a 5%-point deduction for every day your assignment is late. This only applies to approved extensions. Late assignments will not be accepted.

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Plagiarism is highly prohibited. Please ensure you are citing your sources correctly using APA 7th edition. All assignments including discussion posts should be formatted in APA with the appropriate spacing, font, margin, and indents. Any papers not well formatted would be returned back to you, hence, I advise you review APA formatting style. I have attached a sample paper in APA format and will also post sample discussion responses in subsequent announcements.

Your initial discussion post should be a minimum of 200 words and response posts should be a minimum of 150 words. Be advised that I grade based on quality and not necessarily the number of words you post. A minimum of TWO references should be used for your initial post. For your response post, you do not need references as personal experiences would count as response posts. If you however cite anything from the literature for your response post, it is required that you cite your reference. You should include a minimum of THREE references for papers in this course. Please note that references should be no more than 5 years old except recommended as a resource for the class. Furthermore, for each discussion board question, you need ONE initial substantive response and TWO substantive responses to either your classmates or your instructor for a total of THREE responses. There are TWO discussion questions each week, hence, you need a total minimum of SIX discussion posts for each week. I usually post a discussion question each week. You could also respond to these as it would count towards your required SIX discussion posts for the week.

I understand this is a lot of information to cover in 5 weeks, however, the Bible says in Philippians 4:13 that we can do all things through Christ that strengthens us. Even in times like this, we are encouraged by God’s word that we have that ability in us to succeed with His strength. I pray that each and every one of you receives strength for this course and life generally as we navigate through this pandemic that is shaking our world today. Relax and enjoy the course!

Hi Class,

Please read through the following information on writing a Discussion question response and participation posts.

Contact me if you have any questions.

Important information on Writing a Discussion Question

• Your response needs to be a minimum of 150 words (not including your list of references)
• There needs to be at least TWO references with ONE being a peer reviewed professional journal article.
• Include in-text citations in your response
• Do not include quotes—instead summarize and paraphrase the information
• Follow APA-7th edition
• Points will be deducted if the above is not followed

Participation –replies to your classmates or instructor

• A minimum of 6 responses per week, on at least 3 days of the week.
• Each response needs at least ONE reference with citations—best if it is a peer reviewed journal article
• Each response needs to be at least 75 words in length (does not include your list of references)
• Responses need to be substantive by bringing information to the discussion or further enhance the discussion. Responses of “I agree” or “great post” does not count for the word count.
• Follow APA 7th edition
• Points will be deducted if the above is not followed

• Remember to use and follow APA-7th edition for all weekly assignments, discussion questions, and participation points.
• Here are some helpful links
• The is a great resource