...Supply and Demand Simulation The simulation shows over the years, there are several changes to the population of Atlantis and thus the supply and demand of two-bedroom apartment housing. The changes in the supply and demand curves cause the equilibrium price to rise and fall. In the simulation, the price elasticity of demand affects both the customer’s decision to rent and the company’s pricing strategy. The principles of microeconomics and macroeconomics are both active in the simulation. Examples of microeconomics are the individuals and the GoodLife Company as they made choices because of scarcity and regulation. An example of macroeconomics is the economy-wide change of the government that places a price ceiling on apartments for GoodLife. The two examples of microeconomics classify as such because they have a limited effect on the organization or the individual in the economy. The government’s regulation of price ceiling classifies as macroeconomics because it has an aggregative effect on the economy. Individual consumer choice causes increases and decreases in demand that the company can respond to. The company can modify its price to achieve equilibrium in reaction to consumer demand. However, this is not the case when government sets regulation on product price. In the beginning of the simulation, when the company lowers its rate to $1,050 per month, the vacancy rate hits target level. At this price strategy, the company can fill vacancies for 1700 apartments, leading...
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...subject is to expose students to some of the key principles of economics theory and their applicability to economic and social problems. At the end of the course, candidates should have attained an understanding of microeconomics and in particular the problems of resource allocation. 1. Introduction Definition of Economics Microeconomics vs. Macroeconomics Positive vs. normative economics Economics as a science Scarcity and wants Opportunity cost. Production Possibility Frontiers Factors of Production 2. Demand, Utility and Supply Demand - price and income Distinction between a movement along and a shift of the demand curve Elasticity of demand Inferior and griffen goods Supply price and cost of production Elasticity of supply Determinants of supply 3. Price Mechanism and Allocation of Resources. Interrelationship between demand and supply Equilibrium price and output Interrelationship between markets Compliments and substitutes Government intervention in the market - Maximum price, minimum price Tax and subsidies 4. Consumer Choice Utility Consumer Equilibrium Marginal utility theory Consumer surplus Indifference Curves 5....
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...issue. Huge profits can be gained by selling these tickets on the black market and subsequently cause massive losses in revenue for the organisers of the event. Recommendations as to how to regulate such a market are also explained. This section will use President Elect Barack Obama’s recent inauguration to the Presidency of the United States as its example. These points can be explained through the analysis of the following topics: * The price mechanism and equilibrium price. * Changes in demand, supply and equilibrium price. * Price and the allocation of resources. The Event Barack Obama made history on January 20, 2009 as he was inaugurated as the first African American to be inaugurated to the Presidency of the United States. For people to attend such a massive event, 240,000 tickets were made available for reserved seating and standing areas around Capitol Hill. It was decided that these tickets were to be made available free of charge and distributed through the members and representatives of Congress when requested by members of the public. The price mechanism and the equilibrium price The price mechanism describes the way in which the prices charged for goods and services determine how scarce resources are allocated in a free market economy. The inauguration presented a perfect example of limited resources and the unlimited needs and wants of the consumer. In this case, due to the popularity of the event, demand quickly outstripped supply leading to...
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...Fall 2012 CHAPTER 1: THE CHALLENGE OF ECONOMICS 1 CHAPTER 1: THE CHALLENGE OF ECONOMICS Definitions and Questions All economic questions and problems arise because human wants exceed the resources available to satisfy them. Scarcity: - The condition that arises because the available resources are insufficient to satisfy wants. o Our resources are limited but our wants are unlimited. - Scarcity: Lack of enough resources to satisfy all desired uses of those resources The Central Problem of Scarcity Our materialistic wants and desires continue to grow. - Newest camera phone - Larger television - Bigger house - Exotic vacation Why can’t we have everything we want? - Our wants exceed our resources. Economics and Opportunity Cost Economics – the study of how best to allocate scare resources among competing users. Opportunity cost – The value or price of the most desired goods and services that are foregone in order to obtain something else. - The next best alternative that you give up. Factors of Production Resource inputs used to produce goods and services. The four resources: - Labor, land, capital and entrepreneurship Resources are factors of production. Economic resources – all natural human and manufactured resources that can be used in the production of goods and services. Land – arable land, forests, minerals, energy (oil deposits and coal), water, air, wild plants, animals, birds and fish. Labor – all the physical and intellectual talents that can...
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...Week 1 Knowledge Check Concepts Business Systems Productive Resources Law of Supply Law of Demand Calculating Profit Calculating Profitability Effect of the Business Model Mastery 100% 100% 67% 100% 100% 100% 100% Questions 1 2 3 Score: 20/21 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Concept: Business Systems Concepts Business Systems Mastery 100% Questions 1 2 3 1.What are the three components that make up a business system? A. Business commerce, business organization, business occupation B. Business organization, business management, business exchange C. Business commerce, business organization, business market D. Business market, business management, business organization Correct! The three components that make up a business system are as follows: business commerce, business occupation, and business organization. 2.Which term refers to the total money or assets of a business? A. Competitive advantage B. Sales revenue C. Capital D. Wealth Correct! “Profit that is kept in a company and invested in its business increases its capital, the total monetary value of its financial assets such as cash, property, land, stock, patents, and brand name” (Jones, 2007, p. 8). . 3.Information technology, e-commerce, human resource management, and procurement are included in what type of value chain function in a business? A. Tertiary function B. Complimentary function C. Primary value function D. Secondary value...
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...Week 1 Knowledge Check Concepts Business Systems Productive Resources Law of Supply Law of Demand Calculating Profit Calculating Profitability Effect of the Business Model Mastery 67% 100% 100% 67% 100% 67% 67% Questions 1 2 3 Score: 17/21 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Concept: Business Systems Concepts Business Systems Mastery 67% Questions 1 2 3 1.What are the three components that make up a business system? A. Business commerce, business organization, business occupation B. Business organization, business management, business exchange C. Business commerce, business organization, business market D. Business market, business management, business organization Correct! The correct answer is: A. The three components that make up a business system are as follows: business commerce, business occupation, and business organization. 2.Which term refers to the total money or assets of a business? A. Competitive advantage B. Sales revenue C. Capital D. Wealth Correct! The correct answer is: C. “Profit that is kept in a company and invested in its business increases its capital, the total monetary value of its financial assets such as cash, property, land, stock, patents, and brand name” (Jones, 2007, p. 8). . 3.Information technology, e-commerce, human resource management, and procurement are included in what type of value chain function in a business? A. Tertiary function B. Complimentary function...
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...Weblog Assignment for Samsung 1.0 Introduction of the firm The firm that I choose for the assignment is Samsung. It is a conglomerate corporation and its market structure is Oligopoly. It is a corporation that includes variety of business such as Petrochemicals, Heavy Industries, Life Insurance, Fire and Marine insurance, Securities Company, Venture Investment Corporation and others (Samsung, 2013). Samsung was establish in the year of 1938 by Lee Byung-Chull, the founder of Samsung from Daegu, Korea (Samsung, 2013). In year 1938, Samsung firstly focus on the business on trade export that sells vegetables and fruits to Manchuria and Beijing (Samsung, 2013). Samsung has evolved to the modern global corporation in these days by still using the same name. The location of Samsung is located all over the world and the headquarters is located in Seoul, South Korea. The types of economic goods that is produced by the company includes mobile devices, mobile accessories, television, audio and video player, camera and also home appliances (Samsung, 2013). In year 2012, Samsung has been ranked 20th as the world’s most admired companies by Fortune (Samsung Profile, 2013). The size of Samsung is large as it have many types of business in it. In year 2012, Samsung has earned a net sales of RM 268.80 billion, net income was RM 26.20 billion and the number of employees reach 425 thousands in year 2012 (Samsung, 2013). Samsung also has its own Values and Philosophy. The core values of Samsung...
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...macroeconomic goals. | b. | the use of the government's regulatory powers to improve economic efficiency. | c. | the government provision of goods to improve economic efficiency. | d. | the deliberate control of the money supply to achieve macroeconomic goals. | ANS: D 3) The use of government taxation and expenditures to achieve macroeconomic goals is called a. | cyclical policy. | b. | monetary policy. | c. | fiscal policy. | d. | industrial policy. | ANS: C 4) As the U.S. price level rises relative to price levels in other countries, what would happen in the U.S.? a. | consumption and net exports would decline | b. | consumption and net exports would increase | c. | consumption would increase and net exports would decrease | d. | consumption would decrease and net exports would increase | e. | consumption and net exports would remain constant | ANS: A 5) Which of the following is not included in aggregate demand? a. | purchases of stock and bonds | b. | purchases of services such as visits to the doctor | c. | purchases of capital goods such as equipment in a factory | d. | purchases by foreigners of consumer goods produced in the United States | ANS: A 6) Which of the following helps explain why the aggregate demand...
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...your own professional experience, examine within your answer the circumstances that will enable a company to pass on cost increases to customers and protect profit margins. ------------------------------------------------------------------------------------------------------------------------------------ 1a) Identify and explain the main economic factors that determine the price of a good or service. Let us first understand the market equilibrium price of the product and then identify and analyze how factors such as change in demand and supply, elasticity, separating and pooling equilibrium, market structure determine the price of a good or service. In free market, equilibrium price is the price at which there is no surplus or shortage and therefore quantity demanded equals quantity supplied (Sloman 2008). At equilibrium, any change in quantity demanded or quantity supplied will move the market towards disequilibrium. Graph 1 Table 1 Market Equilibrium is at the combination P0Q0 where consumers demand and firms supply are equal. (Lowes 2010a) Market forces will push the market from disequilibrium towards stable position of equilibrium (Lowes 2010a). Graph 2 Table 2 In shortage, buyers bid higher price due to scarcity of product whereas suppliers tend to increase the supply to earn higher profits leading to higher equilibrium price P*. (Lowes 2010a) Graph 3 Table 3 In surplus, suppliers sell at lower price to clear the stock and buyers buy more quantity...
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...Keller Graduate School Business Economics 26 July 2014 Project I The price of gasoline fluctuates due to the price of crude oil. Gasoline is made from crude oil (found in the earth). Gasoline prices have been on the rise due to increasing crude oil prices. West Texas Intermediate (U.S) and Brent Crude (World) are two of the most important crude oil market suppliers (Dent & Sakurai, 2014). These organizations crude oil price is mandated by the Organization of Petroleum Exporting Countries (OPEC). Private business owner for gasoline stations seeks a higher maximum profit per gallon when prices increase. But, when the price of gasoline increases it affects the economy. Consumers are hit with a tight budget on their finances to sacrifice a gallon of gas. As, prices increase gasoline stations become competitive; usually prices are slightly close. Driving within my city, I notice that station prices are higher or lower, and as I research the topic gasoline it gives me a clearer understanding. It’s noticeable that the same amount of vehicles is at each station. From personal opinion, I believe it depends on the location (which side of the highway) and brand name. I’m a consumer that is more concerned with price; therefore if the station on the other side of the highway is offering a lower price, I’ll go the extras to get that price. Grocery stores have made it convenient for consumers to save at the pump, by turning one’s grocery bill into...
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...made a £200m profit last year on total sales of more than £1.6bn. The leading European and US retailers have come under growing pressure to ensure that workers in their supply chain - particularly in labor-intensive markets such as India and China - are not exploited. The BBC's Panorama programme, which carried out a six-month investigation, alerted Primark to the problems that their suppliers are sub-contracted smaller firms, which were using child labor to carry out embroidery and sequin work. Under the terms of its code of practice for suppliers, Primark prohibits the use of child labor in its manufacturing chain. Equilibrium Price: This is the price at the quantity of goods demanded is equal to the amount supplied. Let us take an example, say when the price of a tin of sugar is $1 there was a demand of 100 boxes of sugar and 100 boxes were supplied to the market at that particular time. Then we say that $1 is the equilibrium price at that point. Considering consumers as stakeholders, the intense pressure cause the demand of the Primark’s products to decrease. A decrease in the demand of their product leads to excess supply of their products. Since supply is excess, equilibrium price will fall. A case may also arise where there will be a change in both supply and demand of their commodity. This may occur in the ways that both demand and supply may increase or both supply and demand may decrease, supply may increase while demand decreases and lastly, supply may decrease...
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... it. The need to make such decisions arises because economic resources are scarce. Making decisions involves the sacrifice of benefits that could have been obtained from using resources in an alternative course of action. This sacrifice is known as the opportunity cost of an activity. Economists assume that people behave rationally at all times and always seek to improve their circumstances. • Producers will seek to maximise their profits. • Consumers will seek to maximise the benefits (their 'utility') from their income. • Governments will seek to maximise the welfare of their populations. The way in which the choices about resource allocation are made, the way value is measured, and the forms of ownership of economic wealth will also vary according to the type of economic system that exists in a society....
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...What is the right supply chain for your product? by Marshall L. Fisher Introduction Much technology and brain power has been applied to improve supply chains. Companies are able to capture customers’ voice by using sophisticated marketing tools. Their goal is the accurate and quick response to market demands. Mass customization, automated warehousing and agile manufacturing are the means leading to that goal. Despite these efforts, many supply chains have never been worse. Adversarial relationships among partners as well as lack of coordination have lead, in many cases, to an unpredictable rise of cost. The excess of one product and the shortage of another is a common symptom. Why companies are unable to improve their supply chain performance? How can you avoid these problems? Is your product functional or innovative? The most crucial issue is the comprehension of the connection between the nature of demand and the type of supply chain you need. The fundamental problem is the mismatch between the type of product and the type of supply chain. Therefore you have to specify, first, the type of your product. Experience has shown that there are two categories of products: functional and innovative. There are some criteria , such as life cycle and t unpredictability of demand, to make up your mind whether your product belongs to the first or the second category. Functional products Functional products are those which satisfy basic needs, such as...
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...Teaching the Costs of Uncoordinated ; Supply Chains Charles L. Munson • Jianli Hu College of Business and Economics, Washington State University, PO Box 644736, Pullman, Washington 99164-4736 munson@'ivsu.edu • hu@mail.wsu.edu , Meir J. Rosenblatt (deceased) formerly Professor at Washington University in St. Louis, Missouri, and Technion—Israel Institute of Technology This paper was refereed. Supply-chain management has become a prominent area for teaching and research. Academics and managers realize that communication and coordination among members of a supply chain enhance its effectiveness, creating financial benefits to be shared by the members. We have collected numerical examples covering (1) location decisions, (2) centralized warehousing, (3) lot sizing with deterministic demand, (4) demand forecasting, (5) pricing, and (6) lot sizing with stochastic demand in a newsvendor environment. The examples are suitable for classroom use, and they illuminate the rewards supply-chain members can obtain by eliminating naturally occurring supply-chain inefficiencies and the costs of not doing so. {Professional: OR/MS education. Supply-chain management.) hen each member of a group tries to maximize his or her own benefit without regard to the impact on other members of the group, the overall effectiveness of the group may suffer. Such inefficiencies often creep in when rational members of supply chains optimize individually instead of coordinating their efforts. Nowadays...
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... * Utilities = $6000 * Taxes = $7,000 * Advertising expenses = $7500 Answer the following questions: a. What are your explicit costs? My explicit cost are: Cost of pogo sticks = $75,000 Employee’s wages = $40,000 Utilities = $6,000 Taxes = $7,000 Advertising = $7,500 Total Explicit cost = $135,500 b. What is your accounting profit? My Accounting profit is: Total Revenue – Total Expenses $180,000 – (75,000+40,000+6,000+7,000+7,500) $180,000 - $135,500 = $44,500 c. What are your implicit costs? My implicit cost are: $50,000 Annual salary as an assistant store manager $14,400 yearly income of building rental $5,000 per year on interest earned on financial assets Total implicit cost = $69,400 d. Explain why the reasoning for considering these implicit costs – after all, you didn’t actually have to pay them in cash. You should consider implicit costs and subtract them from your bottom line if you think the opportunity cost of running a business outweighs the money you could make from other ventures. For instance, calculating the economic profit of your business might show that you would make more money with a typical job or from renting out your business's commercial space. Analyzing...
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