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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 emailed 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.
Situation B
Your neighbor Cindy wants to start a contracting business for installing solar
panels. She has heard of the cost savings that households and businesses can make
each year by installing solar panels on their roofs. Cindy has also heard of
government incentives for installing solar panels. Being concerned about the
environment and wishing to reduce pollution, Cindy thinks installing solar panels
also serves a good social purpose. But she does not want to risk her life savings on
a venture that might not succeed or become profitable enough. After hearing from
you about taking this course in business economics, she decides to ask you for
advice.
At first you are hesitant to give investment advice. Then you read the piece US
boosts game-changer solar technology in bid for global market share on page
374 of the textbook. You realize there are more pieces to the decision than Cindy is
considering. You decide to research the market in terms of supply and demand,
elasticity, costs of production, pricing, and economic or normal profit or loss. You
want to provide Cindy with the most informed advice possible.
Situation C
Cousin Edgar is always thinking of the next business idea. This time, he plans to
invest in buying two gas stations. He reckons American consumers have come to
accept the high gasoline prices, and estimates world prices for gasoline to increase
even further with high demand from India and China. Besides, Cousin Edgar thinks
he will make a good profit on the sale of convenience items at each station. But
before buying the gas stations, he decides to ask for your advice because you are
taking this course in business economics.
You happened to read the piece $4-a-Gallon Gas Fueling Fears for Recovery on
page 196 of the textbook. Being skeptical of Cousin Edgars optimism on the
profitability of selling gasoline and convenience items, you decide to research the
market in terms of supply and demand, elasticity, costs of production, pricing, and
normal or economic profit or loss. You want to provide Cousin Edgar with the most
informed advice possible.
Situation D
After hearing of you taking this course in business economics, Uncle Dan has emailed you asking for advice on his 100-acre corn farm. He mentioned how, after
30 years of growing corn, he wishes to leave that commoditys market and enter a
more profitable market instead. He is thinking of planting some organic crop. But
he is not sure which crop would be most profitable. He already knows that going
organic requires changing some of his practices to qualify for the certification.
Therefore he wants to know how much it costs to become a certified organic
farmer, and which crop would be best suited for him to grow given his current
equipment.
Luckily before you can find time to answer Uncle Dans e-mail, you read the piece
on organic farming in the United Kingdom on page 422 of the textbook.
Recognizing the costs and risks for Uncle Dan in making the switch, you decide to
research the market in terms of supply and demand, elasticity, production costs,
pricing, and economic or normal profit or loss. You decide to educate yourself
about organic farming so that you can provide Uncle Dan with the most informed
advice possible.
Grading Rubric
Section
Paper
Presentation
Relevant Data:
Demand: 70
points
Supply: 110
points
Points
earne
d
Point
s
Description
10
180
Recommendati
ons
Total
40
230