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Econ 545 Project 1 Microeconomic Analysis Complete A+


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Econ 545 Project 1 Microeconomic Analysis Complete A+ Answer
Econ 545 Project 1 Microeconomic Analysis Complete A+ Answer
ECON545: Project 1Microeconomic Analysis
The Microeconomic Paper tests your ability to apply economic principles to a business
decision. 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 3 (230 points). See the grading rubric at the end of this document. Be
sure to use the DeVry library for finding data; avoid questionable sources, such as
Wikipedia.
The following is a list of the specific required information, research, graphs, and math
to be included in each answer regardless of the scenario chosen.
1. Demand Determinants:
a. Each individual determinant analyzed for your situation, with examples applicable to
your situation (5 points each) and research (3 points each) showing current Demand
data or most recent past data, except for the Expectations Determinant in which you
need to use data estimating future market conditions.
b. (20 points) Price Elasticity of Demand facing you in your scenario, including actual
calculation of it using the midpoint formula. If you cant find data, then determine the
Price Elasticity from the Characteristics and make up numbers to use. Be sure to
identify this if you use this approach. This will help you in deciding the slope of your
Demand curve below.
c. (10 points) Graph the Demand facing your situation. Note that this requires
information from the Supply Determinant analysis before deciding how to draw the
curve(s), as you may need a separate MR curve.
2. Supply Determinants:
a. Each individual determinant analyzed for your situation, with examples applicable to
your situation (5 points each) and research (3 points each) showing current Supply data
or most recent past data, except for the Expectations Determinant in which you need to
use data estimating future market conditions.
i. (40 points) You need to be very specific in the Cost of Production Determinant to
identify Fixed, Variable, and Marginal Cost in order to derive your Supply curve for the
graphing component. You will need to explain and show how Profit Maximization or
Loss Minimization output and price are determined. You will need to do the math using
actual figures [cited] or your own estimated figures [identified as such] and explain why

you expect Short Run Economic or Normal Profits, Acceptable Loss or temporary Shut
Down and how you will know which it is.
ii. The Number of Sellers determinant must contain your analysis of the kind of market
structure in which your firm or labor service will be sold.
b. (20 points) Price Elasticity of Supply you have based on the Cost of Production
changes as output changes, including actual calculation of it using the midpoint
formula. If you cant find data, then determine the Price Elasticity from the
Characteristics and make up numbers to use. Be sure to identify this if you use this
approach. This will help you in deciding the slope of your Supply curve.
c. (10 points) Graph your Supply situation using the numbers from your earlier Cost of
Production analysis.
3. Recommendations(40 points) what are your recommendations explained by your
analysis?
4. Paper presentation(10 points) good format, citations, lack of spelling errors, etc.
Situation A
Jenny, your niece, is a smart high-school student who wants to make intelligent choices
for her future. Hearing of your course in business economics, she has e-mailed you
asking for advice on whether to become a doctor and on the best location to practice it.
She recognizes the high costs of tuition and the years of study involved in becoming a
doctor. She wants to evaluate if that career choice is an optimal decision for her, so she
has asked you for advice.
Having read the piece Fewer Physicians Move, a Sign of Career Caution on page 20 of
the textbook, you recognize the significance of such a career decision for Jenny. You
decide to educate yourself about the market for physicians in terms of supply and
demand, elasticity, costs of production, pricing, and economic or normal profit or loss.
You want to provide Jenny 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 US boosts
game-changer solar technology in bid for global market share on page 374 of the
textbook. You realize there are more pieces to the decision than Cindy is considering.
You decide to research the market in terms of supply and demand, elasticity, costs of
production, pricing, and economic or normal profit or loss. You want to provide Cindy
with the most informed advice possible.
Situation C

Cousin Edgar is always thinking of the next business idea. This time, he plans to invest
in buying two gas stations. He reckons American consumers have come to accept the
high gasoline prices, and estimates world prices for gasoline to increase even further
with high demand from India and China. Besides, Cousin Edgar thinks he will make a
good profit on the sale of convenience items at each station. But before buying the gas
stations, he decides to ask for your advice because you are taking this course in business
economics.
You happened to read the piece $4-a-Gallon Gas Fueling Fears for Recovery on page
196 of the textbook. Being skeptical of Cousin Edgars optimism on the profitability of
selling gasoline and convenience items, you decide to research the market in terms of
supply and demand, elasticity, costs of production, pricing, and normal or economic
profit or loss. You want to provide Cousin Edgar with the most informed advice
possible.
Situation D
After hearing of you taking this course in business economics, Uncle Dan has e-mailed
you asking for advice on his 100-acre corn farm. He mentioned how, after 30 years of
growing corn, he wishes to leave that commoditys market and enter a more profitable
market instead. He is thinking of planting some organic crop. But he is not sure which
crop would be most profitable. He already knows that going organic requires changing
some of his practices to qualify for the certification. Therefore he wants to know how
much it costs to become a certified organic farmer, and which crop would be best suited
for him to grow given his current equipment.
Luckily before you can find time to answer Uncle Dans e-mail, you read the piece on
organic farming in the United Kingdom on page 422 of the textbook. Recognizing the
costs and risks for Uncle Dan in making the switch, you decide to research the market in
terms of supply and demand, elasticity, production costs, pricing, and economic or
normal profit or loss. You decide to educate yourself about organic farming so that you
can provide Uncle Dan with the most informed advice possible.
Microeconomic Paper as a Professional Report
Your paper should be organized into five parts as listed below.
1. Title PageName, course, and date
2. Introduction to situation, but do NOT copy the scenario. Briefly summarize the
situation and identify the microeconomic issue(s) to be decided from the perspective of
the organization.
3. Relevant Economic Principles: Determinants of Demand, Supply, etc. and Relevant
Data
Identify the variables that are critical in addressing the issue(s). Gather and present the
relevant data on the variables by searching the DeVry Online Library. Ask a librarian
for help if needed. Use in-text citation to report the source(s) of the data. Graphs may be
included here.
4. Recommendations and Economic Justification
Formulate and present your recommendations for addressing the issue(s) based on the

relevant data and economic principles identified above. Justify your recommendations
in terms of the economic impact on those affected.
5. References
List the full references for at least five sources alphabetically in APA format.

Econ 545 Project 1 Microeconomic Analysis Complete A+


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