Economics : Master : Essay : English (U.S.) : 2 pages/550 words 2 sources apa format due in 24 hours BUS640.W2A1.10.2013 Description : Total Possible Score : 8.00 1a. Describes, Calculates, and Compares the Expected Utilities (EUs) of the Two Alternatives Total: 0.80 Distinguished - Provides accurate calculations, a comprehensive description of those calculations, and a thorough comparison of the expected utilities (EU). Proficient - Provides calculations, a description of those calculations, and a comparison of the expected utilities (EU). Minor details are missing or few inaccuracies are present. Basic - Provides calculations, a description of those calculations, and a comparison of the expected utilities (EU). Relevant details are missing or several inaccuracies are present. Below Expectations - Provides calculations, a description of those calculations, and a comparison of the expected utilities (EU). Significant details are missing and/or many inaccuracies are present. Non-Performance - The description, calculation, and comparison of the expected utilities (EU) of the two alternatives are either nonexistent or lack the components described in the assignment instructions. 1b. Describes, Calculates, and Compares the Expected Utilities (EU) of the Two Alternatives Total: 0.80 Distinguished - Provides accurate calculations, a comprehensive description of those calculations, and a thorough comparison of the expected utilities (EU). Proficient - Provides calculations, a description of those calculations, and a comparison of the expected utilities (EU). Minor details are missing or few inaccuracies are present. Basic - Provides calculations, a description of those calculations, and a comparison of the expected utilities (EU). Relevant details are missing or several inaccuracies are present. Below Expectations - Provides calculations, a description of those calculations, and a comparison of the expected utilities (EU). Significant details are missing and/or many inaccuracies are present. Non-Performance - The description, calculation, and comparison of the expected utilities (EU) of the two alternatives are either nonexistent or lack the components described in the assignment instructions. 1c. Describes, Calculates, and Compares the Expected Utility (EU) with Probability of the Two Alternatives Total: 0.80 Distinguished - Provides accurate calculations, a comprehensive description of those calculations, and a thorough comparison of the expected utilities (EU) with probability of the two alternatives. Proficient - Provides calculations, a description of those calculations, and a comparison of the expected utilities (EU) with probability of the two alternatives. Minor details are missing or few inaccuracies are present. Basic - Provides calculations, a description of those calculations, and a comparison of the expected utilities (EU) with probability of the two alternatives. Relevant details are missing or several inacc.

1. Economics
: Master
: Essay
: English (U.S.)
: 2 pages/550 words 2 sources apa format due in 24 hours
BUS640.W2A1.10.2013
Description
:
Total Possible Score
: 8.00
1a. Describes, Calculates, and Compares the Expected Utilities
(EUs) of the Two Alternatives
Total: 0.80
Distinguished - Provides accurate calculations, a comprehensive
description of those calculations, and a thorough comparison of
the expected utilities (EU).
Proficient - Provides calculations, a description of those
calculations, and a comparison of the expected utilities (EU).
Minor details are missing or few inaccuracies are present.
Basic - Provides calculations, a description of those
calculations, and a comparison of the expected utilities (EU).

2. Relevant details are missing or several inaccuracies are present.
Below Expectations - Provides calculations, a description of
those calculations, and a comparison of the expected utilities
(EU). Significant details are missing and/or many inaccuracies
are present.
Non-Performance - The description, calculation, and
comparison of the expected utilities (EU) of the two alternatives
are either nonexistent or lack the components described in the
assignment instructions.
1b. Describes, Calculates, and Compares the Expected Utilities
(EU) of the Two Alternatives
Total: 0.80
Distinguished - Provides accurate calculations, a comprehensive
description of those calculations, and a thorough comparison of
the expected utilities (EU).
Proficient - Provides calculations, a description of those
calculations, and a comparison of the expected utilities (EU).
Minor details are missing or few inaccuracies are present.
Basic - Provides calculations, a description of those
calculations, and a comparison of the expected utilities (EU).
Relevant details are missing or several inaccuracies are present.
Below Expectations - Provides calculations, a description of
those calculations, and a comparison of the expected utilities
(EU). Significant details are missing and/or many inaccuracies
are present.
Non-Performance - The description, calculation, and
comparison of the expected utilities (EU) of the two alternatives

3. are either nonexistent or lack the components described in the
assignment instructions.
1c. Describes, Calculates, and Compares the Expected Utility
(EU) with Probability of the Two Alternatives
Total: 0.80
Distinguished - Provides accurate calculations, a comprehensive
description of those calculations, and a thorough comparison of
the expected utilities (EU) with probability of the two
alternatives.
Proficient - Provides calculations, a description of those
calculations, and a comparison of the expected utilities (EU)
with probability of the two alternatives. Minor details are
missing or few inaccuracies are present.
Basic - Provides calculations, a description of those
calculations, and a comparison of the expected utilities (EU)
with probability of the two alternatives. Relevant details are
missing or several inaccuracies are present.
Below Expectations - Provides calculations, a description of
those calculations, and a comparison of the expected utilities
(EU) with probability of the two alternatives. Significant details
are missing and/or many inaccuracies are present.
Non-Performance - The description of how to calculate the
expected utility (EU) with probability of the two alternatives is
either nonexistent or lacks the components described in the
assignment instructions.
1d. Provides a Description of a Scenario in a Real-World
Business Setting Discussing the Benefits and Drawbacks

4. Total: 0.80
Distinguished - Provides a thorough description of a scenario in
a real-world business setting discussing the benefits and
drawbacks.
Proficient - Provides an adequate description of a scenario in a
real-world business setting discussing the benefits and
drawbacks, but minor details are missing or unclear.
Basic - Provides a partial description of a scenario in a real-
world business setting discussing the benefits and drawbacks.
Relevant details are missing.
Below Expectations - Attempts to provide a description of a
scenario in a real-world business setting discussing the benefits
and drawbacks, but significant details are irrelevant or
inaccurate.
Non-Performance - The description of a scenario in a real-world
business setting is either nonexistent or lacks the components
described in the assignment instructions.
2a. Describes and Calculates the Price Elasticity of Demand
Total: 1.00
Distinguished - Thoroughly describes and accurately calculates
the price elasticity of demand.
Proficient - Adequately describes and calculates the price
elasticity of demand, but minor details are missing or few
inaccuracies are present.
Basic - Partially describes and calculates the price elasticity of
demand, but relevant details are missing or several inaccuracies

5. are present.
Below Expectations - Minimally describes and calculates the
price elasticity of demand, but significant details are missing or
many inaccuracies are present.
Non-Performance - The description and calculation of the price
elasticity of demand is either nonexistent or lacks the
components described in the assignment instructions.
2b. Derives an Expression for the Inverse Demand Curve
Total: 1.00
Distinguished - Thoroughly and accurately derives an
expression for the (inverse) demand curve/equation.
Proficient - Derives an expression for the (inverse) demand
curve/ equation, but minor details are missing.
Basic - Partially derives an expression for the (inverse) demand
curve/ equation, but the curve/equation is somewhat inaccurate.
Below Expectations - Attempts to derive an expression for the
(inverse) demand curve/ equation, but the curve/equation is
inaccurate.
Non-Performance - The derivation of an expression for the
(inverse) demand curve/ equation is either nonexistent or lacks
the components described in the assignment instructions.
2c. Discusses Whether or Not Newton’s Donuts Should Reduce
the Price to Maximize its Profit
Total: 1.00

6. Distinguished - Thoroughly discusses whether or not Newton’s
Donuts should reduce the price to maximize its profit.
Proficient - Discusses whether or not Newton’s Donuts should
reduce the price to maximize its profit, but some minor details
are missing.
Basic - Partially discusses whether or not Newton’s Donuts
should reduce the price to maximize its profit. Relevant details
are missing.
Below Expectations - Attempts to discuss whether or not
Newton’s Donuts should reduce the price to maximize its profit;
however, significant details are missing.
Non-Performance - The discussion of whether or not Newton’s
Donuts should reduce the price to maximize its profit is either
nonexistent or lacks the components described in the assignment
instructions.
2d. Discusses Whether or Not Newton’s Donuts Should Spend
More on Advertising
Total: 1.00
Distinguished - Thoroughly discusses whether or not Newton’s
Donuts should spend more on advertising.
Proficient - Discusses whether or not Newton’s Donuts should
spend more on advertising, but minor details are missing.
Basic - Partially discusses whether or not Newton’s Donuts
should spend more on advertising. Relevant details are missing.
Below Expectations - Attempts to discuss whether or not
Newton’s Donuts should spend more on advertising; however,

7. significant details are missing.
Non-Performance - The discussion of whether or not Newton’s
Donuts should spend more on advertising is either nonexistent
or lacks the components described in the assignment
instructions.
Critical Thinking: Explanaton of Issues
Total: 0.20
Distinguished - Clearly and comprehensively explains in detail
the issue to be considered, delivering all relevant information
necessary for a full understanding.
Proficient - Clearly explains in detail the issue to be considered,
delivering enough relevant information for an adequate
understanding.
Basic - Briefly recognizes the issue to be considered, delivering
minimal information for a basic understanding.
Below Expectations - Briefly recognizes the issue to be
considered, but may not deliver additional information
necessary for a basic understanding.
Non-Performance - The assignment is either nonexistent or
lacks the components described in the instructions.
Written Communication: Content Development
Total: 0.20
Distinguished - Uses appropriate, pertinent, and persuasive
content to discover and develop sophisticated ideas within the
context of the discipline, shaping the work as a whole.

8. Proficient - Uses appropriate and pertinent content to discover
ideas within the context of the discipline, shaping the work as a
whole.
Basic - Uses appropriate and pertinent content, but does not
apply it toward discovering or developing ideas. Overall,
content assists in shaping the written work.
Below Expectations - Uses content, though it may be unrelated
or inappropriate to the topic. Content does not contribute
toward the development of the written work, and may distract
the reader from its purpose.
Non-Performance - The assignment is either nonexistent or
lacks the components described in the instructions.
Written Communication: Control of Syntax and Mechanics
Total: 0.20
Distinguished - Displays meticulous comprehension and
organization of syntax and mechanics, such as spelling and
grammar. Written work contains no errors, and is very easy to
understand.
Proficient - Displays comprehension and organization of syntax
and mechanics, such as spelling and grammar. Written work
contains only a few minor errors, and is mostly easy to
understand.
Basic - Displays basic comprehension of syntax and mechanics,
such as spelling and grammar. Written work contains a few
errors, which may slightly distract the reader.
Below Expectations - Fails to display basic comprehension of

9. syntax or mechanics, such as spelling and grammar. Written
work contains major errors, which distract the reader.
Non-Performance - The assignment is either nonexistent or
lacks the components described in the instructions.
Written Communication: APA Formatting
Total: 0.20
Distinguished - Accurately uses APA formatting consistently
throughout the paper, title page, and reference page.
Proficient - Exhibits APA formatting throughout the paper.
However, layout contains a few minor errors.
Basic - Exhibits basic knowledge of APA formatting throughout
the paper. However, layout does not meet all APA requirements.
Below Expectations - Fails to exhibit basic knowledge of APA
formatting. There are frequent errors, making the layout
difficult to distinguish as APA.
Non-Performance - The assignment is either nonexistent or
lacks the components described in the instructions.
Powered by
Consumer Demand Analysis and Estimation Applied Problems
Please complete the following two applied problems:

10. 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.
Steak Restaurant
Pizza Restaurant
Taste
Location
Price
80
55
65
70

11. 80
50
Show all of your calculations and processes. Describe your
answer for each question in complete sentences.
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.
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.
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.
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

12. 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.
Show all of your calculations and processes. Describe your
answer for each question in complete sentences, whenever it is
necessary.
Calculate the price elasticity of demand for Newton’s Donuts
and describe what it means. Describe your answer and show
your calculations.
Derive an expression for the inverse demand curve for Newton’s
Donuts. Describe your answer and show your calculations.
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)?
Should Newton’s Donuts spend more on advertising?
Required Resources
Text

13. Please read the following chapters in:
Managerial Economics
:
Chapter 3: Consumer Demand Analysis
Chapter 4: Market Demand Analysis and Estimation
Article
Hainer, R. (2010).
Social smokers aren't hooked on nicotine, just smoking (Links
to an external site.)
.
Cable News Network.
Retrieved from Weather, Entertainment & Video News.
Retrieved November 13, 2012, from ttp://
www.cnn.com/2010/HEALTH/04/24/social.smokers/index.html
Websites
Bloomberg (Links to an external site.)
(
http://www.bloomberg.com
)
Cable News Network (Links to an external site.)
(
http://www.cnn.com
)
The Economist (Links to an external site.)

14. (
http://www.economist.com
)
Recommended Resources
Multimedia
TED. (2004, February).
Malcolm Gladwell: Choice, happiness and spaghetti sauce
(Links to an external site.)
[Video file]. Retrieved from
http://www.ted.com/talks/malcolm_gladwell_on_spaghetti_sauc
e.html
TED. (2005, July).
Barry Schwartz: The paradox of choice
(Links to an external site.)
[Video file]. Retrieved from
http://www.ted.com/talks/