Managerial Economics

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Describe how goals, constraints, incentives, and market rivalry affect economic decisions.

CLO #2 – Analyze demand, supply, equilibrium prices, and price elasticities as a quantitative tool to forecast changes in revenues.

Using the graph below, develop a 2- to 4-page response in APA format using the following four-question prompt:

Question 1

What is the maximum amount you would pay for an asset that generates an income of $250,000 at the end of each of five years if the opportunity cost of using funds is 8 percent?

Question 2

Suppose the supply function for product X is given by Qxs = −30 + 2Px − 4Pz. (LO1)

How much of product X is produced when Px = $600 and Pz = $60?
How much of product X is produced when Px = $80 and Pz = $60?
Suppose Pz = $60. Determine the supply function and inverse supply function for good X. Graph the inverse supply function.
Question 3

Suppose the own price elasticity of demand for good X is −5, its income elasticity is −1, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 3.

Determine how much the consumption of this good will change if:

The price of good X decreases by 6 percent.
The price of good Y increases by 7 percent.
Advertising decreases by 2 percent.
Income increases by 3 percent.
Question 4

A consumer is in equilibrium at point A in the accompanying figure. The price of good X is $5.
What is the price of good Y?
What is the consumer’s income?
At point A, how many units of good X does the consumer purchase?
Suppose the budget line changes so that the consumer achieves a new equilibrium at point B. What change in the economic environment led to this new equilibrium? Is the consumer better off or worse off as a result of the price change?

 

Sample Solution

There are multiple ways that specialists can meet youngsters’ instructive requirements inside science. It is their job to relate their training to the EYFS, this is on the grounds that they can recognize what age and stage the kid is at and the way in which they can additionally expand their turn of events. A way that the specialists in my setting use to meet the kids’ instructive requirements is through arranging and perception. This empowers the experts to discover which regions the youngster has accomplished and which regions they presently can’t seem to accomplish and thusly needs greater improvement. Through past exercises that have as of now occurred inside the setting, specialists can assess upon this movement, to see which regions inside arithmetic of the action needs improvement. To accomplish this, experts should establish a steady and an empowering climate that has open doors for the youngsters to foster their numerical abilities. In my setting, they do this by giving a few stations that connect with arithmetic, for example, having a sand and water region, counting station and so on This can help their numerical improvement as it assists them with investigating the ideas of weight, number, limit and estimation.

“Give a wide scope of number assets and urge kids to be imaginative in recognizing and conceiving issues and arrangements in every aspect of learning” (EYFS, Mathematics: Numbers, Enabling Environments, pg. 34, 8/2/19).

At the point when the specialists are playing and aiding the youngsters inside my setting with regards to exercises, they generally utilize numerical language when conversing with the kids. Experts must do this through any action, for example, story time, and pretend.

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