MBA Managerial Economics Assignment Answers with Harvard Referencing Style

 

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Assignment Brief:

  • Topic: Managerial Economics Assignment
  • Document Type: MBA –1 Case Study (Q7) and Questions and Answers based Assignment (Q1, Q2, Q3, Q4, Q5 and Q6)
  • Subject: Managerial Economics
  • Number of Words: 11,000words
  • Citation/Referencing Style: Harvard (in-text + citation)

 

Requirement:

  1. For Questions & Answers Based Assignment (Q1, Q2, Q3, Q4, Q5 and Q6)
  • The introduction is needed for each question.
  • The question has to be answered with references if any idea or information is taken from other sources.
  • Note: Brief Introduction& Conclusion/Summary are needed for each question.
  • References (in-text + citation) to be used – Harvard style

 

  1. Case study (Q7) should contain:
  • Executive summary
  • Table of content
  • Introduction
  • Body of assignment (questions related to case need to be answered)
  • Note: Brief Introduction& Conclusion/Summary are needed for each question.
  • Conclusion / Recommendation if any
  • References (in-text + citation) to be used – Harvard style

 

 

Answer all the questions:

 

Q (1) William Howe must decide whether to start a business renting beach umbrellas at an ocean resort during June, July and August of next summer. He believes he can rent each umbrella to vacationers at $5 a day, and he intends to lease 50 umbrellas for the three- month period for$3,000. To operate this business, he does not have to hire anyone (but himself), and he has no expenses other than the leasing costs and a fee of $3,000 per month to rent the business location. Howe is a college student, and if he did not operate this business, he could earn $4,000 for the Three- month period doing construction work.

 

(a) If there are 80 days during the summer when beach umbrellas are demanded and Howe rents All 50 of his umbrellas on each of these days, what will be his accounting profit for the Summer?

(b) What will be his economic profit for the summer?

 

Q (2)  A book is to be written by Britney Spears. Batman Books agrees to pay Britney $6 million for the rights to this not- yet- written memoir. According to one leading publisher, BatmanBooks could earn a profit of roughly $1.2 million if it sold 625,000 copies in hardcover. On the other hand, if it sold 375,000 copies, managers would lose about $1.3 million. Publishing executives stated that it was hard to sell more than 500,000 copies of a nonfiction hardcover book, and very exceptional to sell 1 million copies. Were Batman managers taking a substantial risk in publishing this book?

 

Q (3) The Government has various tools available to deal with the Market Failure, the few of the tools available to the Government was

  • Price Profit Regulations
  • Restrictive Trade policy and practices
  • Direct Controls or Regulations
  • Patents and Law of Tort
  • Subsidy Policy
  • Tax Policy
  • Foreign Exchange Policy. Briefly provide your views on all the above to predominantly sustain for an Economy in Market forces.

 

Q4 (i) The Abner Corporation, a retail seller of television sets, wants to determine how many television sets it must sell to earn a profit of $12,000 per month. The price of each television set is $300, and the average variable cost is $100.

  • What is the required sales volume if the Abner Corporation’s monthly fixed costs are $5,000 per month?
  • If the firm sells each television set at a price of $350 rather than $300, what is the required sales volume?
  • If the price is $350, and if the average variable cost is $85 rather than $100, what is the required sales volume?

 

Q4 (ii) All though all countries throughout the world have to face similar economic problems the economic system they adopt as a means of dealing with them will differ. Essentially there are three approaches to tackling the economic problem of allocation, distribution and utilization of resources. Comment on all the three approaches: Market – Economy, Planned – Economy and Mixed- Economy and reason out which approach will work out in UAE as a country. (The solution is Mixed – Economy)

 

 

Q5 (a)  What are the factors that cause an increase (rightward or upward shift) in demand and supply of Chocolate Bars and High-End Luxury cars (Write down at least 5 points each for demand and supply)

 

Q5 (b) why does the price of some goods like Airline tickets to Europe go up during the months of heaviest consumption, while others like sweet corn go down during the months of heaviest consumption?

 

 

Q (6) Housing Prices Slow down in 2017 the housing prices in the UK are rising much more slowly than in the previous Years. In 2014 & 2015 the housing prices rose by averagely 9%. The fall in the housing price is linked to higher inflation and slower wage growth, interest rates growth. Comment on your view why macro factors affect the Housing Prices. Why are housing prices of rising less rapidly than previous? Use demand /Supply diagram to explain your reasoning.

 

Q (7) Externalities and Air Transport The Government recognizes the benefits that the expansion in air travel has brought to people’s lives and to the economy of this country. The increased affordability of air travel has opened up the possibilities of foreign travel for many people, and it provides rapid access that is vital to many modern businesses. But we have to balance those benefits against the environmental impacts of air travel, in particular the growing contribution of aircraft emissions to climate change and the significant impact that airports can have on those living nearby.” Air travel has increased five-fold over the past 30 years, and demand is projected to be between two- and three-times current levels by 2030. Some of our major airports are already close to capacity, so failure to allow for increased capacity could have serious economic consequences, both at national and at a regional level. That must be balanced by the need to have regard for the environmental consequences of air travel. The Government believes that simply building more and more capacity to meet demand is not a sustainable way forward. Instead, a balanced approach is required which:

 

  • Recognizes the importance of air travel to our national and regional economic prosperity, and that not providing additional capacity where it is needed would significantly damage the economy and national prosperity;”
  • Reflects people’s desire to travel further and more often by air, and to take advantage of the affordability of air travel and the opportunities this brings. Seeks to reduce and minimize the impacts of airports on those who live nearby, and on the natural environment;”
  • Ensures that, over time, aviation pays the external costs its activities impose on society at large – in other words, that the price of air travel reflects its environmental and social impacts;”
  • Minimizes the need for airport development in new locations by making the best use of existing capacity where possible respect the rights and interests of those affected by airport development.
  • Provides greater certainty tor all concerned in the planning of future airport capacity, but at the same time is sufficiently flexible to recognize and adapt to the uncertainties inherent in the long-term planning.

 

As part of this approach, the Government believes more needs to be done to reduce and mitigate the impacts of air transport and air development. At the global level, the government will play a major role in pressing for new solutions and stronger action by International bodies. And the White paper sets out proposals to bring the aviation within the European Union emissions trading scheme, to help limit the greenhouse gas emissions.

 

Question:

What is meant by Externalities? & Outline the advantages and disadvantages of Airline Travel?

 

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