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Posted: July 16th, 2023
1. Instructions
Describe a situation in which you experienced the law of diminishing marginal returns. How did this affect you?
Your journal entry must be at least 200 words in length. No references or citations are necessary.
2. Instructions
Identify a time when you saw a price that was “too good to be true.” Using the economic theory you learned in this unit, justify why the firm set the price below its average total cost of production.
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Your journal entry must be at least 200 words in length. No references or citations are necessary.
3. Instructions
Identify a business you visited in the past month. Thinking back to your visit and using it as a source of information, hypothesize the market structure for the firm you visited by explaining why you think the firm would or would not meet each of the characteristics of market structures.
Your journal entry must be at least 200 words in length. No references or citations are necessary.
4. Instructions
Suppose a firm uses sugar in a product that you purchase. The firm vertically integrates by purchasing sugar farms that produce the sugar organically and in a way that makes it also sustainable for the environment. How would that influence your demand for that product? What other purpose than profitability might cause the firm to make this decision to vertically integrate in this way?
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Your journal entry must be at least 200 words in length. No references or citations are necessary.
5. Instructions
Identify a skill that you learned in this course, and explain how you can apply it to increase success in your career in a real-world scenario.
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Your journal entry must be at least 200 words in length. No references or citations are necessary.
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Describe a situation in which you experienced the law of diminishing marginal returns. How did this affect you?
I recently started working out at the gym. At first, I saw great results. I was losing weight and gaining muscle quickly. But after a while, the weight loss and muscle gain started to slow down. This is because I was experiencing the law of diminishing marginal returns.
The law of diminishing marginal returns states that as you increase the amount of an input, the marginal output will eventually decrease. In my case, the input was my time at the gym. The output was weight loss and muscle gain.
At first, I was seeing great results because I was making a lot of progress in a short amount of time. I was working out for 30 minutes, 3 days a week. But after a while, I started to plateau. I was still working out for 30 minutes, 3 days a week, but I wasn't seeing the same results.
This is because my body had adapted to the workout routine. I was no longer seeing the same benefits from working out for 30 minutes. I needed to increase the intensity or duration of my workouts in order to see more results.
The law of diminishing marginal returns is a concept that can be applied to many different areas of life. It's important to be aware of this concept so that you can make the most of your time and resources.
Identify a time when you saw a price that was “too good to be true.” Using the economic theory you learned in this unit, justify why the firm set the price below its average total cost of production.
I recently saw a price for a new car that was "too good to be true." The car was being sold for $10,000 below the manufacturer's suggested retail price.
Using the economic theory I learned in this unit, I can justify why the firm set the price below its average total cost of production. The firm may have been trying to attract new customers or clear out inventory. The firm may also have been trying to compete with other firms that were selling the same car for a similar price.
In this case, the firm was willing to sell the car below its average total cost of production because it was more important to them to attract new customers or clear out inventory than it was to make a profit on each sale.
Identify a business you visited in the past month. Thinking back to your visit and using it as a source of information, hypothesize the market structure for the firm you visited by explaining why you think the firm would or would not meet each of the characteristics of market structures.
I visited a local grocery store in the past month. I hypothesize that the grocery store is a monopolistically competitive market.
A monopolistically competitive market is a market structure in which there are many firms selling similar products, but each firm has some control over its price. This is because each firm has a unique product that is slightly different from the products of the other firms.
In the case of the grocery store, there are many other grocery stores in the area. However, each grocery store has a unique product mix that is slightly different from the product mixes of the other grocery stores. This gives each grocery store some control over its price.
The grocery store meets the following characteristics of a monopolistically competitive market:
Many sellers: There are many grocery stores in the area.
Similar products: The grocery stores sell similar products, such as produce, meat, dairy, and baked goods.
Some control over price: Each grocery store has some control over its price because it has a unique product mix.
The grocery store does not meet the following characteristics of a monopolistically competitive market:
Perfect knowledge: Consumers do not have perfect knowledge about the prices and products of all the grocery stores in the area.
Free entry and exit: It is difficult for new grocery stores to enter the market because of the high costs of building and stocking a grocery store.
Suppose a firm uses sugar in a product that you purchase. The firm vertically integrates by purchasing sugar farms that produce the sugar organically and in a way that makes it also sustainable for the environment. How would that influence your demand for that product? What other purpose than profitability might cause the firm to make this decision to vertically integrate in this way?
If a firm that I purchase a product from vertically integrates by purchasing sugar farms that produce the sugar organically and in a way that makes it also sustainable for the environment, I would be more likely to demand that product. This is because I am concerned about the environment and I want to support companies that are taking steps to reduce their environmental impact.
The firm might make this decision to vertically integrate for other reasons besides profitability
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