Economics Assignment
Smart Health develops private fitness clubs in small towns. Smart Health buys or leases a local hotel or motel, then renovates to provide a gym, swimming pool, sauna, Jacuzzi, and a small café where patrons can buy juices, smoothies, and other healthy snacks . Smart Health only develops clubs in towns where it has no competitors. The main product is a one-month membership, which gives patrons unlimited use of the gym and other club facilities. So far Smart Health has opened 24 such clubs in different towns.
You have just started working for Smart Health, and your new boss, Karen, gives you a copy of an Excel spreadsheet containing data collected last year on Smart Health's 24 existing clubs. She asks you to use the data to complete the following important and time-sensitive tasks:
1. Estimate an empirical demand function for one-month memberships using the data gathered from the firm's 24 clubs. (Assume the demand function is linear. Further assume that the only variables likely to significantly affect the demand for one-month memberships are price, average income, and the size of the town's population.)
2. Interpret the estimated demand function for one-month memberships.
3. Calculate the point price elasticity of demand and point income elasticity of demand in Town D at the price charged last year.
4. For Town H and Town W determine whether the price charged last year was above, below or equal to the profit-maximizing price.
5. Smart Health is considering opening a 25th club. The company must choose between one of two towns in which to locate the new club. Both towns have populations of 22,000. However, one of the towns has a relatively high average income of $60,000, while the other has a relatively low average income of $45,000. The annual fixed costs of running the club in the high income town would be about $160,000, while annual fixed costs of running the club in the low income town would be about $70,000. Your job is to select the site for the 25th club and to determine the appropriate price for the one-month memberships.
6. Write a short report summarizing the results of the analysis and any recommendations.
You have one week to complete the analysis, interpret the results, and summarize your findings and recommendations in a brief report. Karen tells you that the main body of the report must be short (a 1000 words at most excluding the title page and any appendices), to the point, and not overly technical. She tells you that her formal knowledge of mathematics, economics, and statistics is somewhat limited, and asks you to keep that in mind as you write the main body of the report. Nevertheless, your conclusions and recommendations must be based on a rigorous analysis of the available data and you should provide a concise summary of any technical details in an appendix. Karen also tells you to be explicit about any important limitations your analysis might have. Finally, Karen tells you that she likes her reports to be broken up into sections with sensible and self-explanatory headings because it makes them much easier to read and understand.
Karen wishes you the best of luck and tells you to check with Peter, her personal assistant, about how to format the report. When you finally manage to track Peter down, he tells you to look at Section 0-8 of the MEQA Study Guide.
Assignment Elements -
Structure of Reports:
Both assignments require you to write a short report that concisely and coherently summarizes your analysis and recommendations. As you write your reports, keep the following things in mind:
Title page - Each report must have a title page that contains the name of the report, the course title, the coach's name, your name, the date of submission, and the word count.
Assumptions and Scope - If something in the assignment is unclear or contradictory, state your interpretation as an assumption. Remember that you may be challenged on your assumptions. Scope provides the focus of the analysis and is likely to be well defined by the assignment. If not, state what is outside of the scope of your analysis. Assumptions and scope statements should be necessary, realistic, consistent with the information in the assignment, and their significance made clear.
Major Issues - These are what you are going to address in your analysis and recommendations. Clearly identify what you regard as the major issues and why you think they are important. Some major issues may be clear from the assignment and associated questions. However, do not assume that all, or even the most important, issues have been identified in the assignment questions. State each issue succinctly.
Analysis - Rigorously analyze the issues you have identified. Base your arguments on data in the case. Demonstrate your critical thinking ability, creativity, and insight, as well as appropriate use of the tools provided in the text or in previous courses. Every issue you identify should be carefully explored in light of the available qualitative and quantitative data. Label opinion as such. There is no need to reproduce case data, simply incorporate it by reference. The analysis is likely to be the major portion of your paper, so logical ordering and clarity is important. Make the rigor of your thinking evident without overwhelming your reader. Your analysis must support your conclusions and recommendations.
Conclusions - Clearly explain what you conclude from the results of your analysis and why. If some of your conclusions are speculative or depend on assumptions, make that clear. Your conclusions should be supported by your analysis.
Recommendations - Outline the specific steps to be taken and describe when and how they are to be completed. Your recommendations should address the issues you have identified and should be supported by your analysis. State each recommendation as the first sentence of a paragraph, "I recommend ...." Be decisive, declarative, and definitive. Avoid weasel words such as 'could,' 'might,' or 'perhaps.' The rest of the paragraph should contain supportive explanation: key data, impact on objectives, alternatives considered. Previous exposition need not be repeated, but may be incorporated by reference. Avoid multiple recommendations in a single statement. If there are contingencies or uncertainties beyond the scope of your analysis, address them in "If ..., then ..." statements. Avoid recommendations suggesting further study; you will get no credit for them. Often, fewer recommendations have more impact than many. Your reader should be left convinced that your recommendations, as a group, represent the best course of action. Recommendations should be stated clearly and concisely: your reader must understand what it is you want to do and why. As a final check, ask yourself, "If I were the decision maker, would I feel comfortable implementing these recommendations?"
Size - Each assignment is limited to 1,000 words exclusive of the title page and any appendices. Appendices with paragraphs in them will be included in the word count. Your coaches will grade only the first 1,000 words. Click on the links to the Student Handbook for details on word count Notes Link and on submission Notes Link. You may include a maximum of two appendices. These may be used for detailed calculations or other material that would otherwise interrupt the flow of the discussion. Remember that the body of the report itself should stand alone; the appendices provide supporting information only. Reports over 1,000 words will be penalized. Use the Word Count facility under the Tools menu in MS Word to determine your document's word count. Please review the Student Handbook for the format and word count policy (Section 1.3.7 Notes Link).
Use of Graphics - Large and complex graphical exhibits will substantially increase replication times. So only use graphics if they substantially enhance the exposition. You do not need to use graphics in your report to do well. Case data does not need to be copied unless necessary for clarity. We have set a file size restriction of 2 MB for all reports.
Attachment:- Assignment Files.rar