Unless specified differently by your course instructor

| November 24, 2016

.jpg” alt=”KULogo”>Unit 5 Assignment Template:

Name: –

Course Number: –

Section Number: –

Unit Number: – 5

Date: –

———————————- General Instructions for all Assignments———————————–

1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format:

Course number_section number_LAST_FIRST_ unit number

2. At the top of the template, insert the appropriate information: Your Name, Course Number, Section Number and Date

3. Insert your answers below, or in the appropriate space provided for in the question. Your answers should follow the APA format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12-point, black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.

4. Provide a list of references at the end of the last page of your assignment.

5. Upload the completed assignment to the appropriate dropbox.

6. Any questions about the assignment, or format questions, should be directed to your course instructor.

——————————————- Career Competencies —————————————–

In this assignment, you will engage in developing the following career competencies:

Analyzing Quantitative Data

Analyzing Qualitative Data

——————————————- Assignment ——————————————-

1. The accompanying table shows the price and yearly quantity sold of ice cream cones on Sidfield Island.

Price of Ice Cream Cones

Quantity of Ice Cream Cones Demanded

$1

3000

$2

2400

$3

1600

$4

800

Using the midpoint method (show your work), calculate the price elasticity of demand when the price of an ice cream cone rises from $1 to $2. What does this estimate imply about the price elasticity of demand for ice cream cones?
Using the midpoint method (show your work), calculate the price elasticity of demand when the price of an ice cream cone rises from $3 to $4. What does this estimate imply about the price elasticity of demand for ice cream cones?
Notice thatthe estimates from (a) and (b) above are different. Why do price elasticity of demand estimates change along the demand curve?
2.Newspaper vending machines are designed so that once you have paid for one paper; you have access to all the papers in the machine and could take multiple papers at a time. However, other vending machines dispense only one item (the item you bought). You do not have access to all the goods (sodas, candy, snacks, etc.) at one time. Using the concept of marginal utility, explain why these vending machines differ?

3.Amy is shopping at a dollar store. She is currently buying 5 bracelets that cost $1 each and 4 sodas that cost $1 each. The table below indicates the marginal utility she obtains when she purchases this combination.

Quantity

Price per Unit

MU per unit

Bracelets

5

$1

30

Sodas

4

$1

40

a. A consumer maximizes utility when the last dollar spent on any good generates the same satisfaction as the last dollar spent on every other good. Is this consumer maximizing her utility?

b. If not, should she consume more bracelets or more sodas? Explain.

Answer the following assuming that one more bracelet is purchased and one less soda is consumed:

c. Recall the law of diminishing marginal utility. What happens to the Marginal Utility of bracelets and the Marginal Utility of soda?

d. What happens to the Total Utility received?

e. What happens to the total dollars spent?

4. On Tuesday nights, a local restaurant has a kid’s meal special. Nina takes her child to a restaurant for chicken nuggets. The restaurant does allow for additional purchase of chicken nugget servings. Nina’s willingness to pay for each serving (her demand schedule) is shown in the table below.

Number of Chicken Nugget servings

(servings)

Willingness to pay for chicken nuggets

(per serving)

1

$5

2

$4

3

$3

4

$2

5

$1

6

$0

a. If the price of an additional serving of chicken nuggets is $3, how many servings will Nina buy? How much consumer surplus does Nina receive?

b.The following week, Nina returns to the restaurant again, but now the price of a serving of chicken nuggets is $4. By how much does Nina’s consumer surplus decrease compared to the previous week?

c.One week later, they return to the restaurant again. Nina discovers that the restaurant is offering an “all-you-can-eat” special for $12. How many chicken nugget servings will Nina purchase, and how much consumer surplus does Nina receive now?

d.Suppose you own the restaurant and Nina is a “typical” customer. What is the highest price you can charge for the “all-you-can-eat” special and still attract customers?

——————————————–

References:

Unit _5_ PERFORM Assignment Grading Rubric/ Instructor Worksheet

Content

Percent Possible

Points Possible

Full assignment

100%

80

Overall Writing:

20%

16

correct coversheet information at the top of 1st page

5%

4.00

APA format for answers

3%

2.40

correct citations

3%

2.40

standard English no errors

4%

3.20

At least ONE, or more, references

5%

4.00

Answers: provides complete information demonstrating analysis and critical thinking:

80%

64

Individual Questions:

1. a. – Calculate price elasticity of demand ($1-$2), what is meaning?

10%

8.00

1. b. – Calculate price elasticity of demand ($3-$4), what is meaning?

10%

8.00

1. c. – Why are a & b different, what different about the demand curve between these prices?

10%

8.00

2. – What is differences between newspaper and snack vending machines (considering utility)?

5%

4.00

3. a. – Is Amy maximizing utility?

5%

4.00

3.b. – Explain if either more sodas, or more bracelets?

5%

4.00

3. c. – If 1 more bracelet & 1 less soda, what happens to marginal utility of each?

5%

4.00

3.d. – If 1 more bracelet & 1 less soda, what happens to total utility?

5%

4.00

3. e. – If 1 more bracelet & 1 less soda, what happens to total dollars spent?

5%

4.00

4a. Nina’s # of servings & Consumer Surplus at $3/serving?

5%

4.00

4b. Nina’s # of servings & Consumer Surplus at $4/serving?

5%

4.00

4c. Nina’s # of servings & Consumer Surplus at All you can eat for $12?

5%

4.00

4d. Maximum price for all you can eat?

5%

4.00

Sub-total for Individual Questions:

80%

64

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