BUS 640 Imagine Your Future/newtonhelp.com

BUS 640 Entire Course
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BUS 640 Week 1 DQ 1 Firm Objectives
BUS 640 Week 1 DQ 2 Decision Making Under Uncertainty
BUS 640 Week 1 Economics of Risk and Uncertainty Applied
Problems
BUS 640 Week 2 DQ 1 Marginal Rate of Substitution
BUS 640 Week 2 DQ 2 Demand Elasticity
BUS 640 Week 2 Consumer Demand Analysis and Estimation
Applied Problems
BUS 640 Week 3 DQ 1 Relevant Costs
BUS 640 Week 3 DQ 2 Contribution Analysis
BUS 640 Week 3 Production Cost Analysis and Estimation
Applied Problems
BUS 640 Week 4 DQ 1 Strategic Behavior Oligopolies
BUS 640 Week 4 DQ 2 Local Market Power
BUS 640 Week 4 Market Structures and Pricing Decisions
Applied Problems

BUS 640 Week 4 Journal Economics in News
BUS 640 Week 5 DQ 1 Good Will in Price Bidding
BUS 640 Week 5 DQ 2 New Product Introduction
BUS 640 Week 5 Price Quotes and Pricing Decisions Applied
Problems
BUS 640 Week 6 DQ 1 Game Theory and Strategic Behavior
BUS 640 Week 6 DQ 2 Sustainable Competitive Advantage
BUS 640 Week 6 Final Paper Managerial Decision Making
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BUS 640 Week 1 DQ 1 Firm Objectives (Ash Course)
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Firm Objectives. Why do some business firms pursue a triple-
bottom-line outcome while others focus only on profit
maximization? Please, use a real company example to illustrate
your points

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BUS 640 Week 1 DQ 2 Decision Making Under Uncertainty
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Decision Making Under Uncertainty. To save on gasoline
expenses, Edith and Mathew agreed to carpool together for
traveling to and from work. Edith preferred to travel on I-20
highway as it was usually the fastest, taking 25 minutes in the
absence of traffic delays. Mathew pointed out that traffic jams
on the highway can lead to long delays making the trip 45
minutes. He preferred to travel along Shea Boulevard, which
was longer (35 minutes), but rarely had traffic jams. Edith
agreed that in case of traffic jams, Shea Boulevard was a
reasonable alternative. Neither of them knows the state of the
highway ahead of time.

After driving to work on the I-20 highway for 1 month (20
workdays), they found the highway to be jammed 3 times.
Assuming that this month is a good representation of all months
ahead, should Edith and Mathew continue to use the highway
for traveling to work?
How would you conclusion change for the winter months, if bad
weather makes it likely for traffic jams on the highway to
increase to 6 days per month?
How would your conclusion change if Mathew purchased a new
smart-phone app that could show the status of the highway
traffic prior to their drive each morning, thus reducing the
probability of them getting into a jam down to only 1day per
month (where on this day, the app showed no traffic jam, but a
jam developed in the meantime as they were driving along the
highwa
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BUS 640 Week 1 Economics of Risk and Uncertainty Applied
Problems (New)
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BUS640 week 1 Assignment
We have another Set (old one) of Week 1 Assignment (But
with different description, values), it can be found on this link
BUS640 week 1 Assignment
Problem 1:
A generous university benefactor has agreed to donate a large
amount of money for student scholarships. The money can be
provided in one lump sum of $12 million in Year 0 (the current
year), or in parts, in which $7 million can be provided at the end
of Year 1, and another $7 million can be provided at the end of
Year 2.
Describe your answer for each item below in complete
sentences, whenever it is necessary. Show all of your
calculations and processes for the following points:
Assuming the opportunity interest rate is 8%, what is the present
value of the second alternative mentioned above? Which of the
two alternatives should be chosen and why?
How would your decision change if the opportunity interest rate
is 12%?
Provide a description of a scenario where this kind of decision
between two types of payment streams applies in the “real-
world” business setting.
Problem 2:

The San Diego LLC is considering a three-year project, Project
A, involving an initial investment of $80 million and the
following cash inflows and probabilities:
Year 0
Initial Investment $80 million discount rate 8%
Year 1 Probability .2 Cash flow $50 million, Probability .3 Cash
flow $40 million,Probability .4 Cash flow $30
million,Probability .1 Cash flow $20 million
Describe your answer for each question in complete sentences,
whenever it is necessary. Show all of your calculations and
processes for the following points:
Describe and calculate Project A’s expected net present value
(ENPV) and standard deviation (SD), assuming the discount rate
(or risk-free interest rate) to be 8%. What is the decision rule in
terms of ENPV? What will be San Diego LLC’s decision
regarding this project? Describe your answer.
The company is also considering another three-year project,
Project B, which has an ENPV of $32 million and standard

deviation of $10.5 million. Project A and B are mutually
exclusive. Which of the two projects would you prefer if you do
not consider the risk factor? Explain.
Describe the coefficient of variation (CV) and the standard
deviation (SD) in connection with risk attitudes and decision
making. If you now also consider your risk-aversion attitude, as
the CEO of the San Diego LLC will you make a different
decision between Project A and Project B? Why or why not?
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BUS 640 Week 2 Consumer Demand Analysis and Estimation
Applied Problems (New)
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Week 2 Assignment
Consumer Demand Analysis and Estimation Applied Problems

Please complete the following two applied problems:
Problem 1:
Patricia is researching venues for a restaurant business. She is
evaluating three major attributes that she considers important in
her choice: taste, location, and price. The value she places on
each attribute, however, differs according to what type of
restaurant she is going to start. If she opens a restaurant in a
suburban area of Los Angeles, then taste is the most important
attribute, three times as important as location, and two times as
important as price. If she opens a restaurant in the Los Angeles
metropolitan area, then location becomes three times as
important as taste and two times as important as price. She is
considering two venues, respectively, a steak restaurant and a
pizza restaurant, both of which are priced the same. She has
rated each attribute on a scale of 1 to 100 for each of the two
different types of restaurants.
Attribute
Steak
Restaurant
Pizza
Restaurant
Taste 80 70
Location 55 80
Price 65 50
Show all of your calculations and processes. Describe your
answer for each question in complete sentences.

a. Which of the two options should Patricia pursue if she
wants to open a restaurant in a suburban area of Los
Angeles? Calculate the total expected utility from each
restaurant option and compare. Graph is not required.
Describe your answer, and show your calculations.
b. Which of the two options should she pick if she plans to
open a restaurant in the Los Angeles metropolitan area?
Describe your answer, and show your calculations.
c. Which option should she pursue if the probability of
finding a restaurant venue in a suburban area can be
reliably estimated as 0.7 and in a metropolitan area as 0.3?
Describe your reasoning and show your calculations.
d. Provide a description of a scenario in which this kind of
decision between two choices, based on weighing their
underlying attributes, applies in the “real-world” business
setting. Furthermore, what are the benefits and drawbacks,
if any, to this method of decision making?
Problem 2:
The demand function for Newton’s Donuts has been estimated
as follows:
Qx = -14 – 54Px + 45Py + 0.62Ax
where Qx represents thousands of donuts; Px is the price per
donut; Py is the average price per donut of other brands of
donuts; and Ax represents thousands of dollars spent on

advertising Newton’s Donuts. The current values of the
independent variables are Ax=120, Px=0.95, and Py=0.64.
answer for each question in complete sentences, whenever it is
necessary.
a. Calculate the price elasticity of demand for Newton’s
Donuts and describe what it means. Describe your answer
and show your calculations.
b. Derive an expression for the inverse demand curve for
Newton’s Donuts. Describe your answer and show your
calculations.
c. If the cost of producing Newton’s Donuts is constant at
$0.15 per donut, should they reduce the price and
thereafter, sell more donuts (assuming profit maximization
is the company’s goal)?
d. Should Newton’s Donuts spend more on advertising?
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BUS 640 Week 2 DQ 1 Marginal Rate of Substitution
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Marginal Rate of Substitution. What is the marginal rate of
substitution (MRS) and why does it diminish as the consumer
substitutes one product for another? Use examples to illustrate

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BUS 640 Week 2 DQ 2 Demand Elasticity
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Demand Elasticity. Please, read the article Hainer, R. (2010),
provided in the required readings section for this week. The
tobacco industry is a prime example to consider when talking
about price elasticity of demand. While nicotine use can be
addictive for many users, it is not addictive for the so-called
"social smokers".
What can we say about the price elasticity of demand for
nicotine products (such as cigarettes, pipes, tobacco) in the
group of nicotine addicted users, versus the group of "social
smokers"? Can we say whose demand is likely to be more
elastic? Why?
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BUS 640 Week 3 DQ 1 Relevant Costs

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Relevant Costs. Two partners own together a small landscaping
business in North Carolina, called Summer Lawn Care. They
have been specializing in summer grass seeding, installation,
and maintenance. Recently, the partners acquired special
technology and know-how for winter grass installations and
maintenance. They also added a tree cutting service as recent
storms in the area had caused demand for this service to soar.
One of the partners insists that the name of the business should
change to Lawn and Tree Care, so that it better reflects the range
of services and, thus, generates more customer interest, and thus
contracts. The second partner wants to keep the old name and
argues, “We have already paid for business cards, vehicle paint,
signage, and ads in Yellow Pages”. Evaluate the arguments of
the two partners. Explain and illustrate their points by
identifying the relevant and irrelevant costs for this decision.
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BUS 640 Week 3 DQ 2 Contribution Analysis

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Contribution Analysis. Explain what is meant by “contribution
analysis”. Carefully define the term and provide examples to
illustrate it.
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BUS 640 Week 3 Production Cost Analysis and Estimation
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Production Cost Analysis and Estimation Applied Problems

Problem 1:
William is the owner of a small pizza shop and is thinking of
increasing products and lowering costs. William’s pizza shop
owns four ovens and the cost of the four ovens is $1,000. Each
worker is paid $500 per week.
Workers employed
Qty of pizzas produced
per week
0 0
1 75
2 180
3 360
4 600
5 900
6 1140
7 1260
8 1360
answer for each question in complete sentences, whenever it is
necessary.
a. Which inputs are fixed and which are variable in the
production function of William’s pizza shop? Over what

ranges do there appear to be increasing, constant, and/or
diminishing returns to the number of workers employed?
b. What number of workers appears to be most efficient in
terms of pizza product per worker?
c. What number of workers appears to minimize the marginal
cost of pizza production assuming that each pizza worker is
paid $500 per week?
d. Why would marginal productivity decline when you hire
more workers in the short run after a certain level?
e. How would expanding the business affect the economies of
scale? When would you have constant returns to scale or
diseconomies of scale? Describe your answer.
Problem 2:
The Paradise Shoes Company has estimated its weekly TVC
function from data collected over the past several months, as
TVC = 3450 + 20Q + 0.008Q2 where TVC represents the total
variable cost and Q represents pairs of shoes produced per week.
And its demand equation is Q = 4100 – 25P. The company is
currently producing 1,000 pairs of shoes weekly and is
considering expanding its output to 1,200 pairs of shoes weekly.
To do this, it will have to lease another shoe-making machine
($2,000 per week fixed payment until the lease period ends).
answer for each item below in complete sentences, whenever it
is necessary.

a. Describe and derive an expression for the marginal cost
(MC) curve.
b. Describe and estimate the incremental costs of the extra
200 pairs per week (from 1,000 pairs to 1,200 pairs of
shoes).
c. What are the profit-maximizing price and output levels for
Paradise Shoes? Describe and calculate the profit-
maximizing price and output.
d. Discuss whether or not Paradise Shoes should expand its
output further beyond 1,200 pairs per week. State all
assumptions and qualifications that underlie your
recommendation.
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BUS 640 Week 4 DQ 1 Strategic Behavior Oligopolies
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Strategic Behavior Oligopolies. An interesting example of
strategic behavior comes from a 1997 article about Microsoft’s
investment in Apple (New Straits Times, 1997). The article is
included in the Required Readings list. Facing tough anti-trust

scrutiny from government agencies, Microsoft provided
financial support to Apple in order to ensure Apple’s survival
and, therefore, to ensure that competitiveness in the industry
remains. Moreover, the partnership with Apple provided an
additional market for Microsoft’s products – the MS Office and
the IE products were to be bundled with the MAC OS as one of
the conditions for this financing. Discuss this case in the context
of market structure and strategic behavior. What market
structure do these firms operate in? Why did Microsoft need to
preserve competitiveness in the industry? What was Microsoft
afraid of in the event that Apple did not survive?
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BUS 640 Week 4 DQ 2 Local Market Power
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Local Market Power. Bulls Eye department store specializes in
the sales of discounted clothing, shoes, household items, etc.
similar to the offerings at a regular Walmart or Target. Bulls Eye

is the only department store in Show Low and the nearest other
discount retailer is Target, located 49 miles away in Eagar. Bulls
Eye, therefore, has some market power in its local area. Despite
having some market power, Bulls Eye is currently suffering
losses. An analyst at Bulls Eye is recommending to the manager
to raise prices, so that profitability can be improved. The
manager is unsure of this strategy as recent data points to
increasing numbers of individuals shopping more and more.
What are the pros and cons of raising the prices at Bulls Eye and
would that strategy be profitable?
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BUS 640 Week 4 Market Structures and Pricing Decisions
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Market Structures and Pricing Decisions Applied Problems.
Problem 1:
Robert’s New Way Vacuum Cleaner Company is a newly
started small business that
produces vacuum cleaners and belongs to a monopolistically
competitive market. Its
demand curve for the product is expressed as Q = 5000 –
25P where Q is the number of
vacuum cleaners per year and P is in dollars. Cost
estimation processes have determined
that the firm’s cost function is represented by TC = 1500 +
20Q + 0.02Q2.

answer for each question in
complete sentences, whenever it is necessary.
a. What are the profit-maximizing price and output levels?
Explain them and calculate
algebraically for equilibrium P (price) and Q (output). Then,
plot the MC (marginal
cost), D (demand), and MR (marginal revenue) curves
graphically and illustrate the
equilibrium point.
b. How much economic profit do you expect that Robert’s
company will make in the
first year?
c. Do you expect this economic profit level to continue in
subsequent years? Why or
why not?
Problem 2:
Greener Grass Company (GGC) competes with its main rival,
Better Lawns and Gardens
(BLG), in the supply and installation of in-ground lawn watering
systems in the wealthy
western suburbs of a major east-coast city. Last year, GGC’s
price for the typical lawn
system was $1,900 compared with BLG’s price of $2,100. GGC
installed 9,960 systems, or
about 60% of total sales and BLG installed the rest. (No doubt
many additional systems
were installed by do-it-yourself homeowners because the parts
are readily available at

hardware stores.)
GGC has substantial excess capacity–it could easily install
25,000 systems annually, as it
has all the necessary equipment and can easily hire and train
installers. Accordingly, GGC
is considering expansion into the eastern suburbs, where the
homeowners are less wealthy.
In past years, both GGC and BLG have installed several
hundred systems in the eastern
suburbs but generally their sales efforts are met with the
response that the systems are too
expensive. GGC has hired you to recommend a pricing strategy
for both the western and
eastern suburb markets for this coming season. You have
estimated two distinct demand
functions, as follows:
Qw =2100 – 6.25Pgw + 3Pbw + 2100Ag - 1500Ab + 0.2Yw
for the western market and
Qe = 36620 - 25Pge + 7Pbe + 1180Ag - 950Ab + 0.085Ye
for the eastern market, where Q refers to the number of units
sold; P refers to price level; A
refers to advertising budgets of the firms (in millions); Y refers
to average disposable
income levels of the potential customers; the subscripts w and e
refer to the western and
eastern markets, respectively; and the subscripts g and b refer to
GGC and BLG,
respectively. GGC expects to spend $1.5 million (use Ag = 1.5)
on advertising this coming
year and expects BLG to spend $1.2 million (use Ab = 1.2) on

advertising. The average
household disposable income is $60,000 in the western suburbs
and $30,000 in the eastern
suburbs. GGC does not expect BLG to change its price from last
year because it has
already distributed its glossy brochures (with the $2,100 price
stated) in both suburbs, and
its TV commercial has already been produced. GGC’s cost
structure has been estimated as
TVC = 750Q + 0.005Q2, where Q represents single lawn
watering systems.
answer for each item below in
complete sentences, whenever it is necessary.
a. Derive the demand curves for GGC’s product in each market.
b. Derive GGC’s marginal revenue (MR) and marginal cost
(MC) curves in each
market. Show graphically GGC’s demand, MR, and MC curves
for each market.
c. Derive algebraically the quantities that should be produced
and sold, and the prices
that should be charged, in each market.
d. Calculate the price elasticities of demand in each market and
discuss these in
relation to the prices to be charged in each market.
e. Add a short note to GGC management outlining any
reservations and qualifications
you may have concerning your price recommendations.
Reference:
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BUS 640 Week 5 DQ 1 Good Will in Price Bidding
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Good Will in Price Bidding. Sometimes, a bidder on a work
contract may bid lower than what would maximize his/her profit
from the contract and the reason for that is to create goodwill (to
increase expected future business from the buyer). How would
you value the goodwill that is obtained in this way?
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BUS 640 Week 5 DQ 2 New Product Introduction
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New Product Introduction. Bayer Schering Pharma AG,
Germany owns the Alka-Seltzer, which was launched in 1931
and was meant for relief of minor aches, pains, inflammation,
fever, headache, heartburn, sour stomach, indigestion, and
hangovers. The Alka-Seltzer Plus was a spin-off of the original
medicine, meant to relieve colds and flu.
The company has recently introduced a new and improved Alka-
Seltzer Plus, as described in the TV ad: “The Cold Truth”,
(please, watch the ad listed in the Required Readings)
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BUS 640 Week 5 Price Quotes and Pricing Decisions Applied
Problems (New)
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Week 5 Assignment

Price Quotes and Pricing Decisions Applied Problems
Problem 1:
Jessica Alba, a famous actress, starts the baby and family
products business, The Honest Company, with Christopher
Gavigan. Alba and Gavigan set up their site so families can
choose what kinds of non-toxic, all-natural products they'd like
to use and get them in a bundle. Families can choose all kinds of
products from food to hygiene necessities and cleaning supplies.
Suppose they are thinking of expanding their business into five
domestic markets: Phoenix, Dallas, Chicago, New York, and
Atlanta. Assume their primary goal of business is to maximize
economic profits, although they want to do business honestly.
Show all your calculations and process. Describe your answer
for each question in three- to five-complete sentences.
a. You are a business adviser for Alba and Gavigan. Describe
a skimming price and a penetration price, and advise them
whether they should charge a skimming price or a
penetration price, with supportive reasoning for and against
each pricing alternative.
b. Are they likely to make economic profits initially? Can
they continue to make economic profits in the long term?
Why or why not? Discuss.
c. What advice would you give to Alba and Gavigan to help
them make more profit in the long term?

Problem 2:
You operate your own small building company and have
decided to bid on a government contract to build a pedestrian
walkway in a national park during the coming winter. The
walkway is to be of standard government design and should
involve no unexpected costs. Your present capacity utilization
rate is moderate and allows sufficient scope to understand this
contract, if you win it. You calculate your incremental costs to
be $268,000 and your fully allocated costs to be $440,000. Your
usual practice is to add between 60% and 80% to your
incremental costs, depending on capacity utilization rate and
other factors. You expect three other firms to also bid on this
contract, and you have assembled the following competitor
intelligence about those companies.
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BUS 640 Week 6 DQ 1 Game Theory and Strategic Behavior
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Game Theory and Strategic Behavior. Suppose that GE is
trying to prevent Maytag from entering the market for high

efficiency clothes dryers. Even though high efficiency dryers are
more costly to produce, they are also more profitable as they
command sufficiently higher prices from consumers. The
following payoffs table shows the annual profits for GE and
Maytag for the advertising spending and entry decisions that
they are facing.
Based on this information, can GE successfully prevent Maytag
from entering this market by increasing its advertising levels?
What is the equilibrium outcome in this game?
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BUS 640 Week 6 DQ 2 Sustainable Competitive Advantage
(Ash Course)
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Sustainable Competitive Advantage. Describe the
circumstances under which a firm chooses a low-cost strategy to
attain sustainable competitive advantage. What about the
situations when a differentiation strategy is chosen? Provide
specific real world examples.

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BUS 640 Week 6 Final Paper (Apple)
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We have another set of final paper based on walmart which
could be found on this link
Focus of the Final Paper
Research a specific company of your choice and identify some
of the managerial decisions that were made over time and in
response to changes in its market or competitive environment.
Use the Ashford University Online Library and web-based
sources for your research. At least three external scholarly
sources must be used. Address all of the following areas:
Describe the company and provide a brief history of its
operations. Find or use graphs to illustrate its financial
performance over the years.
Identify any sources of risk or uncertainty in its operations. Do
the financial reports indicate risky or uncertain activities or
changes to the economic environment that ultimately appear to
have affected the company’s financial outcomes? Be specific.

Are there any government regulations that have affected this
company’s operations domestically or abroad? Explain.
==========================================
BUS 640 Week 6 Final Paper (Wal-mart)
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We have another set of Final Paper based on Apple company,
it could be found on this link
BUS640 Week 6 Paper(Wal-Mart)
Managerial Decision Making Research and Analysis
Research a specific company of your choice and identify some
of the managerial decisions that were made over time and in
response to changes in its market or competitive environment.
Use Ashford University Online library and web-based resources
for your research. At least 3 external resources must be used.
Address all of the following areas:
Focus of the Final Paper

Describe the company and provide a brief history of its
operations. Find or use graphs to illustrate its financial
performance over the years.
Identify any sources of risk or uncertainty in its operations. Do
the financial reports indicate risky or uncertain activities or
changes to the economic environment that ultimately appear to
have affected the company’s financial outcomes? Be specific.
Are there any government regulations that have affected this
company’s operations domestically or abroad? Explain.
Describe the inputs that are used in this company’s production
function and identify any challenges to securing these inputs.
Determine if the company has introduced new products in
existing markets or created new markets over time. What is the
impact on its finances?
Determine if the price of its products increased or declined over
time and analyze the reasons for price fluctuations. Study the
demand elasticity for its products and discuss the availability of
close substitutes for its products. How does that affect pricing
decisions?
Analyze the company’s profitability. Identify the economy or
industry influences on its costs, operations, and profitability.
Describe the competitive environment in which the firm
operates, the distribution of market power, and the strategic
behavior of the firm and its competitors. Apply your knowledge
of the theory of this company’s market structure. How does the
company make pricing and production decisions? Is your
observation supported by the theoretical models? Refer to the
financial reports for illustration.
Identify any non-price competitive strategies that the company
might be engaging in? Provide specific examples.
Evaluate if the company made any mistakes in its decisions over

time, and recommend any changes or improvements for the
future operations. Refer to the financial reports when making
specific observations or recommendations.
Use economic language and demonstrate your understanding of
the concepts and theories of this course.
Writing the Final Paper
The Final Paper:
1. Must be 8 to 10 double-spaced pages in length, and formatted
according to APA style as outlined in the Ashford Writing
Center.
2. Must include a title page with the following:
a. Title of paper
b. Student’s name
c. Course name and number
d. Instructor’s name
e. Date submitted
3. Must begin with an introductory paragraph that has a succinct
thesis statement.
4. Must address the topic of the paper with critical thought.
5. Must end with a conclusion that reaffirms your thesis.
6. Must use at least 3 scholarly sources.

7. Must document all sources in APA style, as outlined in the
Ashford Writing Center.
8. Must include a separate reference page, formatted according
to APA style as outlined in the Ashford Writing Center.

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