Microeconomic Analysis
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 completed paper is a professional report and is due in Week 3 (230 points). See the grading rubric at the end of this document. Be sure to use the DeVry library for finding data; avoid questionable sources, such as Wikipedia.
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:
a. Each individual determinant analyzed for your situation, with examples applicable to your situation (5 points each) and research (3 points each) showing current Demand data or most recent past data, except for the Expectations Determinant in which you need to use data estimating future market conditions.
b. (20 points) Price Elasticity of Demand facing you in your scenario, including actual calculation of it using the midpoint formula. If you can't find data, then determine the Price Elasticity from the Characteristics and make up numbers to use. Be sure to identify this if you use this approach. This will help you in deciding the slope of your Demand curve below.
c. (10 points) Graph the Demand facing your situation. Note that this requires information from the Supply Determinant analysis before deciding how to draw the curve(s), as you may need a separate MR curve.
2. Supply Determinants:
a. Each individual determinant analyzed for your situation, with examples applicable to your situation (5 points each) and research (3 points each) showing current Supply data or most recent past data, except for the Expectations Determinant in which you need to use data estimating future market conditions.
i. (40 points) You need to be very specific in the Cost of Production Determinant to identify Fixed, Variable, and Marginal Cost in order to derive your Supply curve for the graphing component. You will need to explain and show how Profit Maximization or Loss Minimization output and price are determined. You will need to do the math using actual figures [cited] or your own estimated figures [identified as such] and explain why you expect Short Run Economic or Normal Profits, Acceptable Loss or temporary Shut Down and how you will know which it is.
ii. The Number of Sellers determinant must contain your analysis of the kind of market structure in which your firm or labor service will be sold.
b. (20 points) Price Elasticity of Supply you have based on the Cost of Production changes as output changes, including actual calculation of it using the midpoint formula. If you can't find data, then determine the Price Elasticity from the Characteristics and make up numbers to use. Be sure to identify this if you use this approach. This will help you in deciding the slope of your Supply curve.
c. (10 points) Graph your Supply situation using the numbers from your earlier Cost of Production analysis.
3. Recommendations-(40 points) what are your recommendations explained by your analysis?
4. Paper presentation-(10 points) good format, citations, lack of spelling errors, etc.
Situation A
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.
Microeconomic Paper as a Professional Report
Your paper should be organized into five parts as listed below.
1. Title Page-Name, course, and date
2. Introduction to situation, but do NOT copy the scenario. Briefly summarize the situation and identify the microeconomic issue(s) to be decided from the perspective of the organization.
3. Relevant Economic Principles: Determinants of Demand, Supply, etc. and Relevant Data
Identify the variables that are critical in addressing the issue(s). Gather and present the relevant data on the variables by searching the DeVry Online Library. Ask a librarian for help if needed. Use in-text citation to report the source(s) of the data. Graphs may be included here.
4. Recommendations and Economic Justification
Formulate and present your recommendations for addressing the issue(s) based on the relevant data and economic principles identified above. Justify your recommendations in terms of the economic impact on those affected.
5. References
List the full references for at least five sources alphabetically in APA format.
Grading Rubric
Section
Points earned
Points
Description
Paper Presentation
10
Good format, citations, lack of spelling errors, etc.; correct Title page and Reference pages
Relevant Data: Demand: 70 points
Supply: 110 points
180
Demand Determinants and research data (40 points)
Price Elasticity of Demand (20 points)
Graph of Demand (10 points)
Supply Determinants and research data (40 points + Profit Max/Cost of Production analysis = 40 points for total of 80 points)
Price Elasticity of Supply (20 points)
Supply graph (10 points)
Recommendations
40
What are your recommendations explained by your analysis?
Total
230
These last few weeks I was researching to help my niece Jenny a high school graduate to decide if studying to become a physician bests for her. Of course, my niece respected me and looked up at me for studying hard because I took two different special careers in my life. First, I become a Dentists (DMD) in my country back in Asia and practice well before I moved up in USA to join my husband. At this time of my life she knows am about to graduate my masters in MPBA with HealthCare Management as my concentration. In addition, knowing I am with my studies in Economics right now and because of that she approached me for advice.
I have called around and research so many schools in internet and found out being in medical/dental healthcare is still one of the best choices to make. There are so many check and balance to make over endurance with patience and sacrifices as part of psychological and physiological stamina or capabilities or capacities. Why, it is not an easy job learning to shape yourself to all these. It calls for your indulgence, commitment, true care and respect to the people you will serve and call your patients.
Medical School Cost of Attendance
Although the cost of attending UW-Madison will vary among all students, the university bases its financial aids awards on these budgets. These estimated figures are subject to change when tuition and fee rates are approved for 2015-16.
ESTIMATED 2015-16 Academic Year Cost of Attendance with Tuition & Fees and Estimated Costs
Med 1 (1st year)
Med 2 (2nd year)
Med 3 (3rd year)
Med 4 (4th year)
Tuition & Fees
$24,944
$24,944
$24,944
$24,944
Books
$1,430
$1,520
$1,640
$1,050
Instruments
$680
$0
$0
$0
Rotation Travel
$0
$0
$470
$470(1)
National Boards
$0
$590
$0
$590
Loan Fees
$206
$206
$206
$206
$27,260
$27,260
$27,260
$27,260
Living costs per month
Rent, Utilities & Phone
$790
$790
$790
$790
Health Insurance
$253
$253
$253
$253
Food & Household
$400
$400
$400
$400
Transportation
$185
$185
$185
$185
Miscellaneous
$330
$330
$330
$330
Total Monthly Costs
$1,958
$1,958
$1,958
$1,958
Annual Cost of Living(2)
$20,559
$23,496
$23,496
$23,496
Resident Total
$47,819
$50,756
$50,756
$50,756
Nonresident Add on
$9,896
$9,896
$9,896
$9,896
Nonresident Total
$57,715
$60,652
$60,652
$60,052
Note:
(1) Med 4 students are required to take the USMLE Step II Clinical Skills exam. The cost is $1,230 plus transportation and/or hotel (one night) to the test site (probably Chicago). We will adjust aid for Med 4's for this cost upon request.
(2) Med 1 students have a 10.5 month budget for living expenses. Med 2, 3 and 4 students have a 12 month budget for living expenses.
Total Expenses more or less $300,000.00 to become a Medical Doctor of Physician.
In my research, there are more or less 10,000 medical students to become doctors few years ago and because of financial difficulties and the economic problems, the country is going through so many students either stop studying for the moment or switched to a less expensive career. According to some fact finding reports I have read and by communications made directly from actual financial advisers in different colleges and universities that offers medical classes for these aspiring medical students they gave me an approximately 5,000 are able to enroll. Almost, 50% of what they used to have all over USA.
Calculations Price Elasticity of Demand:
5,000 Students expected this year
10,000 or more last few years
5,000 - 10,000
_______________
(5,000 + 10,000)
_______________
2
(-5,000)
________
7,500
= 0.666
Calculations for Price Elasticity on Supply:
300,000 - 180,000
_______________
(300,000 + 180,000)
_______________
2
= 240,000
(40,000)
__________
240,000
= 0.166