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Individual assignment 112, Study Guides, Projects, Research of Marketing

Aaniiih Nakoda CollegeMarketing

Individual assignment Individual assignment

Typology: Study Guides, Projects, Research

2021/2022

Uploaded on 03/27/2022

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Individual assignment
Name:..............................................................................
Chapter 1:
1. How many groups of principle are there? What priciples in each group?
Your answers:
Chapter 2:
1. What is the role of economists? Give a sort example.
2. Why economists sometimes disagree with each other?
Your answers:
Economists are the professionals that have expertise in applying theories
and models to allocate limited resources to the best possible activities
that optimize these resources for the welfare of the economy. The role of
economists majorly comprises the analysis of the cost of production, the
employment levels, the general price level(P), or the inflation rate(IR),
taxes, formulation of policies for the economy, creating the financial
budget, and other opportunities present in the economy for economic
development. Irrespective of the specifications, an economist's role is to
analyze and interpret the data to make useful predictions of economic
conditions that will provide the direction to them to advise the
government for an optimal policy framework that optimizes social welfare.
For example, the economists working as data analysts in a firm will have
the role to analyze the various data related to the operations of the firm
and the economic conditions, that affect the earnings of the firm, and
summarize it to obtain results that are useful to make future predictions
of the economic variables through which it can provide advice on the
policy and actions that the firm must take to earn higher profits or to
prepare for any drastic economic disturbance or forecasted/expected
shocks to reduce the possible losses.
● Economics is a combination of both empirical as well as
psychological science. There are two major schools of thought: first,
the Keynesian school of thought(KST) that affirms that the economy
will work efficiently when there exists the private sector and the
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Individual assignment

Name:..............................................................................

Chapter 1:

  1. How many groups of principle are there? What priciples in each group? Your answers:

Chapter 2:

  1. What is the role of economists? Give a sort example.
  2. Why economists sometimes disagree with each other? Your answers: Economists are the professionals that have expertise in applying theories and models to allocate limited resources to the best possible activities that optimize these resources for the welfare of the economy. The role of economists majorly comprises the analysis of the cost of production, the employment levels, the general price level(P), or the inflation rate(IR), taxes, formulation of policies for the economy, creating the financial budget, and other opportunities present in the economy for economic development. Irrespective of the specifications, an economist's role is to analyze and interpret the data to make useful predictions of economic conditions that will provide the direction to them to advise the government for an optimal policy framework that optimizes social welfare. For example, the economists working as data analysts in a firm will have the role to analyze the various data related to the operations of the firm and the economic conditions, that affect the earnings of the firm, and summarize it to obtain results that are useful to make future predictions of the economic variables through which it can provide advice on the policy and actions that the firm must take to earn higher profits or to prepare for any drastic economic disturbance or forecasted/expected shocks to reduce the possible losses. ● Economics is a combination of both empirical as well as psychological science. There are two major schools of thought: first, the Keynesian school of thought(KST) that affirms that the economy will work efficiently when there exists the private sector and the

public sector, that formulates the policies in the economy. The second is a free economy that gives importance to the independent adjustment of the market to any disturbances in the economy, and there is no intervention by the government. Therefore, different economists form their beliefs depending on the schools of thought they follow and justify the logic behind their theories. Therefore, the agreement, in this case, becomes difficult. Moreover, economists are employed in a variety of jobs that involve academia, research, the government sector, and many more, and this different employment may demand varying agendas from the economist depending on their self-benefit. Like an economist working for a private firm will have beliefs about the economic concepts that will facilitate the companies to maximize their profits, or the economist working with the government will formulate the policies and the budget according to the theories they believe will maximize the welfare of the society. This is another main reason for disagreements among economists.

Chapter 4:

  1. What will make the demand curve shift? What will make a movement along the demand curve? Give example for all of them.
  2. What will make the supply curve shift? What will make a movement along the supply curve? Give example for all of them. Your answers: The demand (DD) curve has a change in demand (DD) or a shift in demand (DD) when the purchased quantity of any commodity in the market increases or declines because of the change (rise or decline) in

Chapter 6:

  1. When will price floor is binding? When will price ceiling is binding? Give a short answer. Your answers: The price floor(PF) is the lowest price(P) that can be charged for a product in the economy. When the value(P) is restricted by the government so that it is above the market-clearing price(P), in the economy, under price floor(PF), then there is an excess supply(Qs) in the economy as the price floor(PF) aims to support the firms as they receive an increased value(P) than what they were earning when there was no restriction and the economy was in equilibrium. Therefore, when the price(P) is over the equilibrium so that there is an excess availability of commodities, is the situation where the price floor(PF) is binding. Price ceiling(PC) is the maximum limit on the price(P) of the product that the firms can charge. This restriction by the government is done to protect the welfare of the customers from getting exploited by paying more price(P). When the market value(P), after the price ceiling(PC) is imposed, is below the equilibrium price(P) due to which there is excess demand(Qd) over the available quantity of the product(Qs), then it is said that the price ceiling(PC) is binding.

Chapter 7

  1. Natalian wants to buy a Car. His consumer’s surplus is $5,000. a. If price of an Vinfast Car is $35,000. What is his willingness to pay? b. If his willingness to pay is 0, what is the actual price for the car? Your answers : The consumer surplus (CS) is economics is the difference between the maximum willing price (WTP or the consumer’s willingness to pay) that the consumer is ready to offer for buying a commodity and the actual sale price (P) of the commodity. Or, CS = WTP - P Here the individual Natalian is thinking of purchasing a car. The actual price of the car = P = $35, The CS of Natalian from buying the car at this price = $5, a. The WTP of Natalian = CS + P Or, the WTP of Natalian to buy the car = $5,000 + $35,000 = $40, So, Natalian’s WTP for the car is $40,000. b. Now, it is given that the WTP of Natalian = 0 So, CS = WTP - P Or, $5,000 = 0 - P Here we have assumed that Natalian is still getting a CS=$5,000 from buying the car. Or, P = 0 - $5, Or, P = -$5, So, for Natalian to gain a CS=$5,000 with the WTP for the car equal to ‘0’, the actual price of the car would have to be -$5,000. This is irrational as the price of a commodity cannot be negative and if an individual has a

Chapter 23

A U.S.-owned car factory in Mexico produces $5 million of cars. $2.5 million of

these cars are sold in Mexico and the other $2.5 million are sold in the U.S. In

both cases $1 million of the value of the cars was due to U.S-owned

equipment located in Mexico and U.S. managers working in Mexico. How

much did this production contribute to U.S. GDP?

Answers:

Answer: The production would contribute $0 to the U.S. GDP. Explanation: The output produced of $5 million in Mexico is an addition to its GDP, However, the output of $5 million consists of $2 million investment and income of the U.S., which would be subtracted from the value of output, that is $3 million is the current addition to GDP. Now, it is to be noted that $2.5 million was imported from Mexico to the U.S. out of which $2 million was investment and income of the U.S. So, $0.5 million is the value of imports from Mexico. That is the contribution of the U.S. from this production is zero. Rather the U.S. contributes $0. Million to the GDP of Mexico. Here, this occurs because investment is an injection into the U.S. economy and will be calculated as a part of its GDP. However, imports being a leakage to the home economy will be subtracted from its GDP.

And thus, the whole production operation will contribute $0 to the U.S. GDP

Chapter 24

Suppose a basket of goods and services has been selected to calculate the

CPI and 2012 has been selected as the base year. In 2012, the basket’s cost

was $50; in 2014, the basket’s cost was $51; and in 2016, the basket’s cost

was $52. What was the value of the CPI in 2014?

Answers:

The consumer price index(CPI) is the measure that is used to analyze the variation in the market price(P) over time with reference to a year that is taken as a base. The formula of the CPI is as follows: CPI=[Cost of the basket in the current year/Cost of the basket in the base year]x(100) The base year is 2012 when the cost of the basket is $50. The cost of the basket in 2014 is $51. Therefore, the CPI in 2014 is: CPI(2014) = [51/50]x(100) CPI(2014) = 102 The CPI is indexed at 100 in the base year. So, the CPI of 102 in 2014 implies that the market price(P) of the product has increased by 2 percent (that is, 102-100) in the year 2014 from 2012.

  1. Improvement in skills: The more the workers are skilled, the more they will produce. The economy must enhance the skills of the workers not only through education but also by ensuring that education is transformed into skills and knowledge so that the worker is productive enough to enhance the productivity of the economy.
  2. Improving spending on R&D: The economy and the government must raise their spending on the research and development in the economy as this will increase the innovations and make the economy diversify the production process and indulge in the production of a variety of products. Therefore, following the above-mentioned methods along with other endeavors will improve productivity by making the determinants of productivity more efficient.