Economics

Scenario: You and your friend from college have just graduated. You majored in business, and your friend majored in a creative field. Your friend is highly inventive and has come up with an excellent idea for a new product. You both believe in this idea so much that you have agreed to become business partners. However, before you embark on your entrepreneurial adventure, you will have to explain some key microeconomics concepts to your partner that are important to make sound business decisions. Your business partner is less than enthusiastic about this prospect and has never had an interest in what is often described as the dry and boring field of economics. Every time you have tried to engage your partner in practical discussions, they brush you off and decide to go play video games instead. Aha! This gives you an idea: What if you could convince your friend to learn about economics through games? You have found several simulation games that demonstrate in real and interesting ways the economic principles that you know your partner needs. Once you have played the games, you will create a memorandum report summarizing for your friend the educational value of your experiment. In your memorandum, you will restate the key principles and takeaways of each simulation, as well as illustrate how these ideas are relevant to your future entrepreneurial success. Directions: [login to view URL] are expected to reference any source material used in your memorandum report with appropriate citations. Any other references you add should be cited according to APA format. 2. I will provide images from simulations, these should also be used to create your memorandum report for the course project. 3. Discuss the Comparative Advantage (With Trade) using the simulation image. You should add the Production Decisions graph and the Production Trade graph (i.e., the graph showing how many hamburgers per fries). How does this simulation demonstrate how individuals evaluate opportunity costs to make business decisions? Use the Production Decisions graph from the simulation as a reference to explain what role the production-possibility frontier (PPF) has in the decision-making process. Explain how comparative advantage impacts a firm’s decision to engage in trade. Would a business’s decision to trade cause a change to its PPF? Provide specific reasoning to support your claims. 4. Discuss the Competitive Markets and Externalities simulations (both with and without policy interventions). Add the Supply and Demand chart and the Outcomes by Market table from your simulation report images. What impact do policy interventions have on the supply and demand equilibrium for a product? Provide specific examples from the simulation to illustrate. What are the determinants of price elasticity of demand? Identify at least three examples. Based on the outcome of the simulation, explain how price elasticity can impact pricing decisions and total revenue of the firm. Based on the results of the simulation, can policy market interventions cause consumer or producer surplus? Explain why using specific reasoning. 5. Discuss the Production, Entry, and Exit simulation using the images. Add the Aggregate Outcomes chart from your simulation report. Analyze a business owner’s decision making regarding whether to enter a market. For example, what factors determined the driver’s market entry and exit in the simulation? Use economic models to support your analysis. How does a business owner applying the concept of marginal costs decide how much to produce? For example, how did the driver determine how many hours to drive each day? Use economic models to explain. How does the impact of fixed costs change production decisions in the short run and in the long run? Use the average-total-cost (ATC) model included in the module reading chapters to demonstrate this impact. 6. Discuss the market structures simulations (Price Discrimination and Cournot).