Assignment Overview
Before beginning this assignment, make sure you have gone carefully through all of the required readings for this module. It is very important to carefully absorb the general concepts as well as the numerical examples in the background readings. For this assignment, you will have to answer some purely conceptual questions, as well as some numerical problems. For conceptual questions, make sure to thoroughly explain your answers and to cite specific readings from the required background materials to explain your answers. For numerical problems, make sure to show all of your work and explain how you arrived at your answers (partial credit can be given if you get the final answer wrong but do some of the steps correctly).
Case Assignment
Part A: Conceptual questions
Part B Quantitative Problem
Suppose the demand function for a new smartphone can be expressed as QD = 1000 – 1.5P with QD being quantity demanded and P being price. The supply function can be expressed as QS = 50 + 2P
Fill out the following table using the above equations:
Price |
Quantity Demanded |
Quantity Supplied |
Surplus Amount or Shortage Amount |
200 |
|||
220 |
|||
240 |
|||
260 |
|||
280 |
|||
300 |
|||
320 |
|||
340 |
Now answer the following questions:
For short answer/short essay questions, make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,†which is found under “My Resources†in the TLC Portal.
Required Reading
For a simple introduction to the concepts of supply and demand, take a look at these animated videos from Professors Alex Tabarrok and Tyler Cowen of George Mason University. These videos will give you the basics of both the demand and supply curves:
Tabarrok, A. & Cowen, T. [Marginal Revolution University]. (2015, January 2). The demand curve [Video file]. Retrieved from https://www.youtube.com/watch?v=kUPm2tMCbGE
Tabarrok, A. & Cowen, T. [Marginal Revolution University]. (2015, January 2). The supply curve [Video file]. Retrieved from https://www.youtube.com/watch?v=nKvrbOq1OfI
Now, go slightly deeper into these topics and read Chapters 3 and 5 from the Taylor (2014) below. These chapters provide a detailed introduction into demand, supply, and elasticity. Pay special attention to the “Self-Check Questions†at the end of each section, which include the solutions. Before submitting the Case Assignment, it is best to test your knowledge of the concepts with the practice questions.
Taylor, T. (2014) Principles of Microeconomics. OpenStax College. http://cnx.org/contents /6i8iXmBj@10.174:UfIHC0qu@6/Introduction-to-Demand-and-Sup |
The quantitative problems in the Case for this module require you to work with demand equations. To better understand this concept, please read through Section 3.4, Modeling Consumer Demand, in the following book:
Stengel, D. (2012). Managerial Economics Principles. Flat World Education. http://saylordotorg.github.io/text_principles-of-managerial-economics/ |