Assignment 2: Utility, Elasticity, and Demand

For this assignment, suppose that you are in charge of designing a product campaign for a new shampoo.

Assignment Guidelines, Part 1

Prepare a 2-3 page paper in Microsoft Word to address the following:

• Describe the ultimate goal of the product campaign for the new shampoo.
• Discuss your methods for achieving this goal.
• Identify the components of marketing, pricing, and distribution for the campaign.
• Include in your response a discussion and analysis of the concepts of utility, price elasticity, and demand.

Assignment Guidelines, Part 2

Using Microsoft Excel:

• Prepare a graph which illustrates the desired effect of the marketing campaign as a shift in market equilibrium with reference to price and quantity adjustments.
• Prepare another graph to illustrate how a change in consumer utility affects the price elasticity of demand.
• Copy and paste or import these graphs into the MS Word document you prepared in Part 1 of this assignment.

(Tutorials for working with MS Excel and MS Word can be found through the Tutoring Services and Tutorials link at the top of the page.)

Remember, quotations, paraphrases, and ideas you get from books, articles, or other sources of information should be cited using APA style.

1. …

– Answer all three questions, with a brief essay format of least a 1 pages per question.

– The Health care plan article from the Washington Post was handed out in class, refer to it for facts on question 2 — (link: https://www.washingtonpost.com/blogs/plum-line/wp01/2017/03/07/the-new-republican-health-care-plan-is-awe-inspiringly-awful/?tid=ss_mail)

Questions:

1) Amazon is among the most successful corporations in the world, with 241,000 employees worldwide, and an estimated net worth of 72 Bil. In terms of our Micro class how would your profile the business model success of Amazon. In the retail market framework what economic concepts. tools were envisioned and implemented that drives Amazon’s success story, and has turned the Retail market on its head. Were there novel market forces at hand that drove the model. Outline Amazon’s Supply chain and Consumer Demand convergence in the marketplace. What methods of delivery optimization are utilized, including the relevance of demographics and informatics. They are also Globally market positioned. Do you think they have optimized their growth arc in the Retail market, or do you see a more expansive frontier. Do you foresee any concerns for incurred diseconomies for Amazon’s delivery system as they expand their markets.

2) The US Congress is in the midst of debating a replacement of our first National Health Care program, the American Care Act, or the ACA.. We as a nation rank as the lowest Health Care provider among the developed nations of the world, and yet we struggle with what could be described in commodity terms, as the budgetary outlay for an entitlement program. In other words, an expensive Welfare program. The current A.C.A. is a public/ private Insurance partnership plan funded primarily by tax dollars, and individual tax contributions from corporations and a tax on the very wealthy. Guaranteed extended coverage is guaranteed through federal funding to State wide Medicaid programs. The first concern we have as economists, is what kind of “good “ is Health care in terms of the market. Thinking of the original A.C.A. plan, what is the economic rationale of covering pre existing conditions, Also, the mandated penalty ,if you refuse health insurance coverage. What is the economic assessment behind this mandate. The recent replacement plan proposal does away with obliged participation, and works more on a voluntary voucher system or an insurance incentive system, driving the insured to a more privatised market relationship. As we analyse possible overturn and current plan, with its flaws, outline the consequences, possible outcomes : for those seeking insurance, on the scale of Supply and Demand for health care services. Identify the beneficiaries vs the losers of the proposed replacement plan. Ask yourself, is the proposed plan a rationed plan for those who can afford health insurance under the new conditions of the plan ( those more elderly would now pay as as high as 5x compared to the A.C.A. plan).

Finally, think back again to the values of Public and Social Goods and the importance of capturing the true costs and benefits as external measured goods/ costs outside the marketplace of transactions, and yes, budgets.

3) Assume the new Administration imposes a Tariff on goods imported from Mexico, at one point a suggested 35% Tariff, as reaction to his assessment of job losses in the US resulting from the NAFTA trade agreement. Keep in mind, Mexico is our third largest trade partner and we import close to 250 Bil. in goods a year coming into the country each year. Imports range from beer,tomatoes, to computer parts, electronic wiring and the VW Jetta line of cars, among others. Discuss the bottom line rationale for international trade, the benefits and some of the criticisms and fallout resulting from. trade. How do the trading partners gain in the transactions. Bottom line, do you think trade barriers or obstacles such as quotas, in general, are a good thing. Are there exceptions to the rule,such as the Infant Industry argument.

Lastly, illustrate on a graph assuming an Equilibrium starting point for the total Supply / Demand in the US economy ( which includes imports ), and what happens when an hypothetical 35% tariff is imposed on Mexico imported goods.
What shifts occur for the US consumer price levels and the producer impact. Also, what effects do you think will fall to the Mexican economy as a result of the US import tariff.