Economics in the Business Environment

 
Group Project: Economics in the Business Environment

Requirements: For this assignment, you are required to select and examine two businesses for which you have a contact person whom you can interview. To answer some of the questions below, you will need to ask your contact person. To answer some of the other questions, you will need to combine your interviewees’ responses with your knowledge from the course. After answering questions 1 to 9 for each business, answer questions 10 and 11.

Use an essay format for the written paper. Do NOT use an exam format with just question numbers followed by answer phrases. The paper must be typed double-spaced, using a 12-point font and 1-inch margins. Be sure that you have clearly answered all parts of all questions. Both content and writing style are important in this assignment.

1. a. What is the name of the business and what product(s) or service(s) does it provide?

b. Who is the owner of the business (government, an individual, a family, partners, stockholders, etc.)?

c. What is the name of the person whom you interviewed, his/her title or position in the company, and your group’s connection with him/her (for example: group member Abdulaziz’s uncle)?

2. a. What inputs does the company use to produce its product or service? (a review of your course notes on fixed and variable inputs may be helpful here.)

b. Which of the company’s inputs are variable inputs? In other words, suppose the company wanted to produce more or less than it had been.

c. Which of the company’s inputs are fixed inputs? That is, for which inputs, can the quantity used not be changed in a relatively short amount of time?

3. What is the business’ largest expense per month? (Labor? Materials? Equipment?)

4. How many employees does the company have?

5. a. Suppose the company increased the price of its product/service (or one of its products/services if there are more than one) by about 10%. Would the quantity purchased be expected to fall by about 10%, more than 10%, or less than 10%? (Ask your interviewee this part (5a), and then use your course notes on elasticity to answer parts 5b and 5c below.)

b. What does your answer to part 5a imply about the elasticity of demand for the company’s product/service? That is, is the demand for the company’s product/service elastic, inelastic, or unit elastic?

c. What do your answers to 5a and b imply about what would happen to the total revenue from sales of the product/service? Would it increase, decrease, or remain the same? Explain.

6. With whom does the company compete? Be specific.

7. Does the company’s product/service differ from that of its competitors and, if so, how?

8. Would this business be best described as a perfect competitor, a monopolistic competitor, an oligopolist, or a monopolist? Explain.

9. a. What does the company do well?

b. What does the company not do well? (Even in well-run organizations, there is room for improvement.)

10. a. How are your two businesses similar?

b. How are your two businesses different?

11. What did you learn from this project (economics-related or otherwise)?

 

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