Description
PART 1DIRECTIONS:
Discussion – Budgeting
As college students, many of us have to tighten our belts as we are faced with limited income that results in budget constraints.
For your initial post, think of a time when you were affected by a budget constraint or an instance in which you experienced diminishing marginal utility. Provide a real-life example and share how you determined your end result. Please address the following questions:
Discuss a budget constraint from your own experience, such as when you had to choose between two goods? For instance, you could share an example of how you budget coffee brewed at home versus Starbucks or Caribou coffee.
Describe how marginal utility was experienced in your situation? For instance, when did you experience total satisfaction?
Going forward, now that you know more about budget constraints, do you anticipate that this will impact your future consumption?
In your reply post, discuss how a peer’s initial post relates to your own. Please be supportive and encouraging in your posts.
Part 2: Written Assignment—Producer and Consumer Theory Report
Distinguish between producer and consumer theory.
You are a junior executive of a new cellular phone carrier called Technologies of the Future (TOF) that competes in the same market as Verizon Wireless, AT&T, and T-Mobile. You have been tasked with providing the Committee Board members of TOF with a report that discusses issues that would be encountered by Technologies of the Future (TOF) when deciding whether TOF and Apple iPhones are substitutes or complementary goods and when analyzing the price elasticity of demand for the competitors’ smartphones. Address the following items in your report:
If the price elasticity of demand is 5, and prices increase by 10%, calculate the percentage change in quantity demanded.
Explain which TOF smartphones and Apple iPhones would be considered substitutes or complementary goods in terms of changes in price, and what impact a change in quantity would have.
Is the cross-price elasticity of demand positive or negative, and why?
Explain which TOF smartphones and phone chargers would be an example of substitutes or complementary goods.
