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Module 4

Assignments to complete this week:

Reading: Managerial Economics and Business Strategy

Chapter 4: The Theory of Individual Behavior (12 pages)

Video:

Psychology, P. (2019, April 15). Behavioral theory – Nature vs nurture personality? [Video]. YouTube. https://www.youtube.com/watch?v=RhVziGVkOeI&feature=youtu.be

Professional Assignment 1

Professional Assignment #1 – CLO 1, CLO 2, CLO 3, CLO 4

Using the graph below, develop a two- to four-page response in APA format using the following three-question prompt:

View the Written Paper Grading Rubric

Question 1

What is the maximum amount you would pay for an asset that generates an income of $250,000 at the end of each of five years if the opportunity cost of using funds is 8%?

Question 2

Suppose the supply function for product X is given by Qxs = âˆ’30 + 2Px âˆ’ 4Pz.

How much of product X is produced when Px = $600 and Pz = $60?

How much of product X is produced when Px = $80 and Pz = $60?

Suppose Pz = $60. Determine the supply function and inverse supply function for good X. Graph the inverse supply function.

Question 3

Suppose the own price elasticity of demand for a good X is âˆ’5, its income elasticity is âˆ’1, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 3.

Determine how much the consumption of this good will change if:

The price of good X decreases by 6%.

The price of good Y increases by 7%.

Advertising decreases by 2%.

Income increases by 3%.

Question 4

A consumer is in equilibrium at point A in the accompanying figure. The price of good X is $5.

What is the price of good Y?

What is the consumerâ€™s income?

At point A, how many units of good X does the consumer purchase?

Suppose the budget line changes so that the consumer achieves a new equilibrium at point B. What change in the economic environment led to this new equilibrium? Is the consumer positively or negatively affected by the price change?