Reference no: EM131131291

Assignment a

Prepare an essay describing the various aspects that compromise Economic Fundamentals as presented in the first 2 chapters of "A Guide to Everyday Economic Statistics". Please include details of what your readings covered and provide ideas and opinions on the overall content in the readings. Provide examples of how you might integrate the topics in your business or the development of a new business.

Your responses must be comprehensive using terminology and concepts in the primary and secondary textbook. Write in complete sentences and use good grammar. Be sure to cite your resources and provide the references using APA format. Remember to reference all work cited or quoted by the text authors.

Assignment b

Complete the following application questions from Chapter 2. Please answer each question thoroughly. Please include details on what your readings covered and provide ideas and opinions on the overall content in the readings. Provide examples where appropriate and express opinions with research to substantiate.

1. You are the manager of a midsized company that assembles personal computers. You purchase most components-such as random access memory (RAM)-in a competitive market. Based on your marketing research, consumers earning over $80,000 purchase 1.5 times more RAM than consumers with lower incomes. One morning, you pick up a copy of The Wall Street Journal and read an article indicating that input components for RAM are expected to rise in price, forcing manufacturers to produce RAM at a higher unit cost. Based on this information, what can you expect to happen to the pnce you pay for random access memory?

2. You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on related paperwork and compliance costs. Moreover, depending on the locale, telecom taxes can amount to as much as 25 percent of a consumer's phone bill. These high tax rates on telecom services have become quite controversial, due to the fact that the deregulation of the telecom industry has led to a highly competitive market. Your best estimates indicate that, based on current tax rates, the monthly market demand for telecommunication services is given by Q^d = 300 - 4P and the market supply (including taxes) is Q^s = 3P - 120 (both in millions), where P is the monthly price of telecommunication services. The senator is considering tax reform that would dramatically cut tax rates, leading to a supply function under the new tax policy of Q^s = 3.2P - 120. How much money per unit would a typical consumer save each month as a result of the proposed legislation?

3. Rapel Valley in Chile is renowned for its ability to produce high-quality wine at a fraction of the cost of many other vineyards around the world. Rapel Valley produces over 20 million bottles of wine annually, of which 5 million are exported to the United States. Each bottle entering the United States is subjected to a $0.50 per bottle excise tax, which generates about $2.5 million in tax revenues. Strong La Nina weather patterns have caused unusually cold temperatures, devastating many of the wine producers in that region of Chile. How will La Nifia affect the price of Chilean wine? Assuming La Nina does not impact the California wineproducing region, how will La Nifia impact the market for Californian wines?

4. Florida, like several other states, has passed a law that prohibits "price gouging" immediately before, during, or after the declaration of a state of emergency. Price gouging is defined as " . . . selling necessary commodities such as food, gas, ice, oil, and lumber at a price that grossly exceeds the average selling price for the 30 days prior to the emergency." Many consumers attempt to stock up on emergency supplies, such as bottled water, immediately before and after a hurricane or other natural disaster hits an area. Also, many supply shipments to retailers are interrupted during a natural disaster. Assuming that the law is strictly enforced, what are the economic effects of the price gouging statute? Explain carefully.

Your responses must be comprehensive, using terminology and concepts presented in the primary textbook as well as supplementary resources. Write in complete sentences and use good grammar, double spacing, 12-point font, with one-inch margins. Be sure to cite your resources and prove the references using APA format. Remember to reference all work cited or quoted by the text authors. You should be doing this often in your responses.

https://www.dropbox.com/s/lxudhxrmq25x4or/Chapter%202%20Market%20Forces%20Demand%20and%20Supply.rar?dl=0