ECON 545 Week 3 Course Project 1, Microeconomic Analysis Situation A, B, C, D
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 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:
2. Supply Determinants:
3. Recommendations—what are your recommendations explained by your analysis?
4. Paper presentation—good format, citations, lack of spelling errors, etc.
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.
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.
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 Edgar’s 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.
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 commodity’s 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 Dan’s 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.