Discussion: Cost-Benefit Analysis in Your Daily Decisions
1. How do you use the concepts of marginal cost and marginal benefit when making decisions daily? The goal is for us to evaluate how often we use a benefit-cost analysis in marginal terms in our daily lives, without realizing it, and how to improve our decision-making after a careful evaluation of all relevant costs and benefits involved.
2. What is your opportunity cost of attending classes on campus? For the purposes of keeping things simple, focus on finding the opportunity cost, expressed as a dollar amount of your opportunity cost of attending a one-hour class on campus. First, find all your alternatives to attending class. Then assign a dollar value to each alternative. Next rank your alternatives, and last, based on the highest ranked alternative, share your opportunity cost. Since you have made the decision to take this course online, how would your opportunity cost compare to that of another student already taking the same course on campus. Explain.
In order to receive full credit for this discussion, you need to post (1) an answer of at least 100 words to at least one of the questions below, and (2) a substantive response of at least 50 words to a comment on this discussion board posted my another student. A substantive response is more than just saying you agree or disagree. Explain why.
Discussion: Supply and Demand in the News
BEFORE you post to this discussion board, you need to do three things:
(1) Search the Internet using a search engine (such as Google) for a recent article that discusses a change in the price of something. For example, search "price increase," "price rise," "price drop," or "price decrease." (I recommend you avoid articles about the stock market.) Copy the URL address of the web site. You will need to post it.
(2) Determine the cause of the price change by reading the article. Then try to identify which of the theoretical demand or supply shifters is the cause of the price change. Next state whether demand or supply, or both, shift to the right or to the left. The article should suggest the cause, such as increased popularity, higher costs of production, or something similar, and you should try to figure out if that represents an increase (shift to the right) or decrease (shift to the left) of the demand or supply curves. If the article does not suggest a cause of the price change, then you must find another article. It is important the article you choose allows you to identify one or more supply or demand shifters. Otherwise, the article will not be suitable for this discussion thread.
(3) After you have stated which diagram best describes the situation in your article, write a short paragraph stating what should happen to the equilibrium price and equilibrium quantity in the graph. These are the theoretical model predictions (for example, you may find that equilibrium price should increase, while equilibrium quantity should decrease by looking at the graph). Last, conclude by stating whether the theoretical predictions match any findings/statements in the article. If this is not mentioned in the article, state that as well.
BEFORE you post to this discussion board, you need to do three things:
(1) Search the Internet using a search engine (such as Google) for a recent article that discusses a change in the price of something. For example, search "price increase," "price rise," "price drop," or "price decrease." (I recommend you avoid articles about the stock market.) Copy the URL address of the web site. You will need to post it.
(2) Determine the cause of the price change by reading the article. Then try to identify which of the theoretical demand or supply shifters is the cause of the price change. Next state whether demand or supply, or both, shift to the right or to the left. The article should suggest the cause, such as increased popularity, higher costs of production, or something similar, and you should try to figure out if that represents an increase (shift to the right) or decrease (shift to the left) of the demand or supply curves. If the article does not suggest a cause of the price change, then you must find another article. It is important the article you choose allows you to identify one or more supply or demand shifters. Otherwise, the article will not be suitable for this discussion thread.
(3) After you have stated which diagram best describes the situation in your article, write a short paragraph stating what should happen to the equilibrium price and equilibrium quantity in the graph. These are the theoretical model predictions (for example, you may find that equilibrium price should increase, while equilibrium quantity should decrease by looking at the graph). Last, conclude by stating whether the theoretical predictions match any findings/statements in the article. If this is not mentioned in the article, state that as well.
IN ORDER TO RECEIVE FULL CREDIT FOR THIS DISCUSSION BOARD, YOU NEED TO POST THREE THINGS:
(1) The URL address of your chosen article that discusses a price change.
(2) A description of how the supply and demand model changed from its initial equilibrium because of the events described in the article.
(3) A paragraph that describes how the supply & demand diagram (the theoretical model predictions) could explain the price change discussed in the article.
EACH STUDENT MUST CHOOSE A DIFFERENT TOPIC. READ THE POSTED ARTICLES TO ENSURE YOUR TOPIC HAS NOT ALREADY BEEN POSTED!
(Ask the instructor if you want or need clarification.)
In order to receive full credit for this discussion, you need to post (1) an answer of at least 100 words to at least one of the questions below, and (2) a substantive response of at least 50 words to a comment on this discussion board posted my another student. A substantive response is more than just saying you agree or disagree. Explain why.
Discussion:Elasticity
Imagine you are one of the managers in your company, and in the next business meeting you will be discussing with other managers and the company's CEO what should be the price strategy for the Spring, Summer, Fall and Winter seasons this year. Your price strategies would be the following: (1) increase the price of the main product your company produces; (2) decrease it, or (3) keep it unchanged. Make sure to use the information about the price elasticity of demand report that the CEO provided you last week (You need to decide on your own what this report contains. As an example, you can consider that the report states that the price elasticity of demand for your company's product last year has been -1.4 from January to May, -0.8 from June to Sept, and 1.8 from Oct to Dec.) Which price strategy would you propose and what economic arguments would you use? What other arguments may provide additional support for your proposed price strategy?
In order to receive full credit for this discussion, you need to post (1) an answer of at least 100 words to at least one of the questions below, and (2) a substantive response of at least 50 words to a comment on this discussion board posted my another student. A substantive response is more than just saying you agree or disagree. Explain why.
Discussion: Monopoly
Make sure you answer all the questions:
1. Evaluate the statement: A monopolist is a price-maker because this firm can charge whatever price they desire. What market conditions may challenge the above statement?
2. Does the analysis of Perfect Competition and Monopoly reveal any common principles?
3. Why are monopoly firms generally inefficient? Provide an example of an efficient monopoly firm, and explain under what circumstances such monopolies behave more efficiently.
4. Would a Natural Monopoly following the profit maximization (MR=MC) rule operate with excess capacity? How can the government regulate natural monopolies to achieve more efficient outcomes?
In order to receive full credit for this discussion, you need to post (1) an answer of at least 100 words to at least one of the questions below, and (2) a substantive response of at least 50 words to a comment on this discussion board posted my another student. A substantive response is more than just saying you agree or disagree. Explain why.
Discussion: Monopolistic Competition
Make sure you answer all the questions:
1. Evaluate the statement: The Demand Curve that Crest (the toothpaste company) faces is flatter than the Demand Curve that Coca-Cola faces? Why, or why not? Make sure to provide supporting arguments.
2. Evaluate the statement: Colgate should spend more on advertising than Coca-Cola, if we consider the advertising expenditures as a percentage of sales. Why, or why not? Data suggests that Coca-Cola's spending on advertisement as a percentage of sales is higher than that of Colgate. What could explain the difference?
3. Provide one argument pro and one against advertising. Illustrate with at least one example from a recent advertisement (on TV, radio, etc.)
4. Describe two different aspects in which a monopolistically competitive firm behaves like a perfectly competitive firm.
5. Evaluate the statement and explain why it is correct or incorrect: "The existence of excess capacity makes a monopolistically competitive firm resemble more a perfectly competitive firm".
In order to receive full credit for this discussion, you need to post (1) an answer of at least 100 words to at least one of the questions below, and (2) a substantive response of at least 50 words to a comment on this discussion board posted my another student. A substantive response is more than just saying you agree or disagree. Explain why.
Discussion: Duopoly/Oligopoly
Make sure you answer all the questions:
1. When the possibility of collusion exists in a duopoly, but both firms cheat after colluding, how will their actual profits differ from their expected profits?
2. Evaluate the statement: In the Prisoner's Dilemma game, the Nash Equilibrium is superior to any other possible outcomes. Why or why not? Make sure to provide supporting arguments.
In order to receive full credit for this discussion, you need to post (1) an answer of at least 100 words to at least one of the questions below, and (2) a substantive response of at least 50 words to a comment on this discussion board posted my another student. A substantive response is more than just saying you agree or disagree. Explain why.