1. Executive Summary - The very first sentence of the very first paragraph of the paper and this section should give the answer to the question, don't make your reader hunt for it. Explain why this answer is meaningful or useful. 2. Definition - This section defines the managerial question to be analyzed. It also identifies the possible opportunities and alternatives being evaluated. 3. Factors or Costs - This section describes and identifies factors or costs that will influence the analysis of the questions. This section also includes factors and costs that may seem important (and are important for other questions) and explain why they are not important to this question. For this course, you may limit yourself to the ten most important factors or costs (you should have at least this many). At least three of them should be implicit and at least another three should be explicit. Also at least two should not be important to this question and at least six should be important to answering this question. This section is to demonstrate your understanding of what makes a cost or factor relevant to economic reasoning. 4. Measurement - This section states how the factors or costs from the previous section are to be measured and the values you plan to use in your analysis (or range of values). In this section you may state the reliability of the number. For example, I don't expect you to include every possible value of a factor, you may make assumptions. If you make an assumption about a number how likely is it to change, and/or how comfortable are you with the stability of the number. For this paper, feel free to make many assumptions about the value in this section. The goal of this paper is to demonstrate your ability to apply economic reasoning and not get the correct answer (or politically correct answer). If you apply good reasoning, your answer may be wrong because of a poor assumption. For this course that is acceptable. With experience, your ability to make good assumptions will improve. 5. Analysis - In this section you use the measurement from the above and apply good economic reasoning and solve the problem. Explain what method you're going to apply and why this method is appropriate (This is to demonstrate that you understand the economic concepts). 6. Summary - This section states your observations about the process. You have an answer, based upon the reliability of the measurement of the factors or costs how likely is that answer to change. You may want to identify some (not more that three) assumptions that if their value were different would give a different answer. For example, buying a house versus renting may the choice when interest rates are 5%, but if they go to 20%, renting may be the better choice.
Week 1 terms:
explicit costs- Monetary opportunity costs of using market-supplied resources. (Thomas 19)
implicit costs- Nonmonetary opportunity costs of using owner- supplied resources. (Thomas 19)
opportunity cost- What a firm’s owners give up to use resources to produce goods or services. (Thomas 18)
total economic cost- Sum of opportunity costs of market-supplied resources plus opportunity costs of owner-supplied resources. (Thomas 19) equity capital- Money provided to businesses by the owners.
Week 2 terms:
relevant cost- costs that matter
irrelevant cost- sunk cost is the best example
Basic Estimating- how to determine costs and revenues with out actual numbers Week 3 terms:
consumer behavior- What is the current behavior of the consumer based on economics and research elasticity- The percentage change in quantity demanded, divided by the percentage change in price. E is always a negative number because P and Q are inversely related. (Thomas 216)
demand – the want of a product by the market of consumers
supply- The amount of product produced for the market
market equilibrium- where the market’s supply and demand meet income effect- The change in...