Solution
Komalavalli answered on
Aug 19 2021
ECO 201 Project Template
[Throughout this template, replace the content in
acketed text with your own responses, and deleted any
acketed instructions (including these).]
[The Introduction section of your report is provided and should remain standard in all submissions.]
[The placeholders for your data visualizations (e.g., charts, graphs, and tables) should be replaced with the appropriate indicated images in each case. To create an isolated image from the simulation data, it is recommended that you use a snipping tool to copy and paste your data visualizations into this template. See How to Use the Snipping Tool (Beginner’s Guide) for more information if you use a PC. A captioned version of this video is available: How to Use the Snipping Tool (Beginner’s Guide) (CC). Or, see Is There a Snipping Tool for Mac?.]
Memo
To: My Business Partne
From: [Insert your name]
Date: [Insert date]
Re: Microeconomics Simulations
Introduction
This memorandum report identifies and explains key microeconomic principles using a set of simulation games. The outcome of these games illustrate how microeconomic principles can be applied within real-life situations to help us make better business decisions. This report is a summary of the simulations I played and their results, which include the key takeaways and their significance, for your review and reference. It is divided into the following sections:
1. Comparative Advantage
2. Competitive Markets and Externalities
3. Production, Entry, and Exit
4. Market Structures (including the Price Discrimination and Cournot simulations)
5. Conclusions
6. References
Comparative Advantage
[Replace this area with the Comparative Advantage Simulation Results.]
Figure 1.1
Simulation report demonstrates how much the firm should produce burgers and fries by allocating the given resource. Here optimal combination of both burger and fries is 80 each. In a corporate analysis, the POF is a curve showing changes in the quantities of the two products which may be produced if both of them are supported by the same limited resource. In economics, PPF also plays an important function. It may be used to illustrate that the economy of each nation reaches its highest degree of efficiency if it only produces what is best able to provide for the remainder of what it requires and trade with other nations.
[Insert your responses to the following questions: How does this simulation demonstrate how individuals evaluate opportunity costs to make business decisions? Explain what role the production-possibility frontier (PPF) has in the decision-making process.]
The idea of comparative advantage includes cost of opportunity as an analytical element for the selection of various production choices.
Comparative advantage indicates that countries trade with one other by exporting items having a relative benefit Changes in the number of accessible production factors or technological developments might induce outward or inward movements in PPF. If the overall number of elements such as labour or capital rises, the economy can manufacture more items on the border at any moment. In developing new technologies that allow items to be produced with less production components, the capital of the economy will mainly increase its parity in buying power. Thus, the economy will at any location on the border generate more, which means that the border has changed successfully.
[Explain how comparative advantage impacts a firm’s decision to engage in trade. Would a business’s decision to trade cause a change to its PPF? Provide specific reasoning to support your claims.]
Competitive Markets and Externalities
[Replace this area with the Competitive Markets Simulation Results.]
Figure 2.1
[Replace this area with the Externalities (with Policy Intervention) Simulation Results.]
Figure 2.2
Without policy intervention the firm would supply 2 units and earn maximum demand. When there is policy intervention the cost of the product increased, it is profitable for a firm to supply 1 units of the product .
[Insert your responses to the following questions: What impact do policy interventions have on the supply and demand equili
ium for a product? Provide specific examples from the simulation to illustrate.]
Many factors impact the product's demand elasticity, including price levels, product kind or service type, income levels, and the availability of possible replacements.High prices are generally extremely elastic, since buyers can buy at a cheaper price if prices decrease. Luxury products, for example, have a high price elasticity, as they are pricing-sensitive. Provide a 50% drop in the price of LED televisions. Demand is growing, because people who could not buy them before are more inexpensive. From above simulation report let us take that the quantity demand increases from 2 to 3 units with price increased from 1.32 to 1.24 , for this the price elasticity will 0.08 , this indicate the consumer responsivess toward price change will be low...