Consumer Demand Analysis and Estimation Applied Problems
1. Roshima is researching universities where she could study for her MBA degree. She is considering 3 major attributes that she considers important in her choice: ranking, price, and location. The value she places on each attribute, however, differs according to whether she remains fulltime employed during her studies or quits her job and focuses on her degree. If she continues to work full time and takes all her courses online, then ranking is the most important attribute, twice as important as price and three times as important as location. If she quits her job and attends school full time, then location becomes three times as important as ranking and twice as important as price. She is considering two universities, respectively, the MBA program at Arizona State University (ASU) and the MBA program at University of Phoenix (UOP), both of which are priced at approximately $25,000. She has rated each attribute on a scale of 1 to 100 for each of the two schools.
Attribute 
ASU 
UOP 
Ranking Location Price

80 50 45

70 70 45

a. Which of the two options should Roshima pursue of she wants to keep her fulltime job? (Calculate the total expected utility from each school option and compare. Graph is not required)
b. Which of the two options should she pick if she plans to quit her job and dedicate to her studies?
c. Which option should she pursue if the probability of being laid off and unable to find a new job is estimated as 0.6? Show your calculations and explain your reasoning.
2. The demand function for Einstein Bagels has been estimated as follows:
Qx = 15.87 – 40.73Px + 84.17Py + 0.55Ax
where Qx represents thousands of bagels; Px is the price per bagel; Py is the average price per bagel of other brands of bagels; and Ax represents thousands of dollars spent advertising Einstein Bagels. The current values of the independent variables are Ax=216, Px=0.85, and Py=0.79.
a. Calculate the price elasticity of demand for Einstein’s Bagels and explain what it means.
b. Derive an expression for the (inverse) demand curve for Einsteins’s Bagels.
c. If the cost of producing Einstein’s Bagels is constant at $0.10 per bagel, should they reduce price and thereafter, sell more bagels (assume profit maximization is the company’s goal)?
d. Should Einstein Bagels spend more on advertising?
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She is xxxxxxxxxxx 3 xxxxx xxxxxxxxxx that xxx xxxxxxxxx xxxxxxxxx in her xxxxxxx xxxxxxxx xxxxxx and xxxxxxxxx
xx xxx continues to work full xxxx and takes xxx xxx xxxxxxx online, then xxxxxxx xx xxx most xxxxxxxxx xxxxxxxxxx xxxxx xx xxxxxxxxx as xxxxx and three times xx xxxxxxxxx xx location.
Thus R=2P and xxxxx i.e. L=R/3 xxx P=R/2
xx xxx quits her xxx and xxxxxxx xxxxxx full xxxxx xxxx xxxxxxxx becomes three times xx important xx ranking and twice xx important xx price.
xxxx L=2P and xxxxx i.e, x x xxx xxx R= L/3
xxAttribute  ASU  UOP 
xxxxxxx xxxxxxxx xxxxx
 80 50 45
 70 70 xx

Which of xxx two xxxxxxx xxxxxx Roshima pursue of she wants to keep her fulltime job? xxxxxxxxxx the xxxxx xxxxxxxx xxxxxxx xxxx xxxx school xxxxxx xxx compare. Graph is xxx required)
xxx xxxxxxxx xxxxxxx xxxx attending ASU is xxxxx xxx
EU(ASU) x 80*Ranking x 50*Location x 45*Price x
xxxxxxxxxxxx the xxxxxx given xx question
80R x [50*(R/3)] x xxxxxxxxxx x 80R x 16.67R +22.5R x
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xxxxxx for xxxx xxxxxxxxx Please xxxxxxx xx xx xxx have any xxxxxxxxxxxxxx
Thanks
ANANDH
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1. Roshima is researching xxxxxxxxxxxx where xxx could study xxx her xxx xxxxxxx xxx xx considering 3 major xxxxxxxxxx that xxx xxxxxxxxx xxxxxxxxx xx xxx xxxxxxx ranking, price, and xxxxxxxxx The value xxx xxxxxx xx xxxx xxxxxxxxxx xxxxxxxx xxxxxxx according to xxxxxxx xxx remains fulltime employed xxxxxx xxx studies xx xxxxx her job xxx focuses on her degree. If xxx continues xx work xxxx time and takes all xxx xxxxxxx online, then xxxxxxx xx xxx most xxxxxxxxx attribute, xxxxx as xxxxxxxxx xx xxxxx and three times as xxxxxxxxx xx xxxxxxxxx If xxx quits xxx job xxx xxxxxxx xxxxxx xxxx xxxxx xxxx location xxxxxxx three xxxxx as important xx xxxxxxx and twice as xxxxxxxxx xx price. She is xxxxxxxxxxx xxx xxxxxxxxxxxxx xxxxxxxxxxxxx the MBA xxxxxxx xx xxxxxxx State xxxxxxxxxx (ASU) and the xxx xxxxxxx at xxxxxxxxxx of xxxxxxx (UOP), both of which are xxxxxx at approximately xxxxxxxx xxx has xxxxx each attribute on x scale of x xx xxx for xxxx of xxx xxx
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BUS 640 Week 2 Assignment Consumer Demand Analysis and Estimation Applied Problems (***** Correct Solution of All 3 Problem with details Calculation + Original *****)
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xxx 640 xxxx 2 Assignment Consumer Demand Analysis and xxxxxxxxxx xxxxxxx Problems
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Consumer xxxxxx xxxxxxxx and Estimation Applied Problems
Student Name:
xxxxxxxxxxx
College:
xxxxxxx Bus 640 xxxx x
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Consumer xxxxxx xxxxxxxx xxx Estimation xxxxxxx xxxxxxxx
xxxxxxx complete the following xxx xxxxxxx problems xx x xxxx or xxxxx document. xxxx xxx xxxx xxxxxxxxxxxx xxx xxxxxxx your results. xxxxxx xxxx assignment in xxx drop xxx by xxxxx xxx Assignment Submission button.
Week x Assignment Study xxxxx
xx Roshima is xxxxxxxxxxx xxxxxxxxxxxx xxxxx xxx could xxxxx xxx her xxx xxxxxxx xxx xx xxxxxxxxxxx x major xxxxxxxxxx xxxx she xxxxxxxxx xxxxxxxxx xx xxx xxxxxxx xxxxxxxx xxxxxx xxx location. xxx xxxxx xxx xxxxxx on each xxxxxxxxxx xxxxxxxx xxxxxxx according to xxxxxxx xxx remains fulltime xxxxxxxx xxxxxx her xxxxxxx xx xxxxx her xxx and xxxxxxx xx her xxxxxxx xx she xxxxxxxxx to xxxx full time xxx xxxxx xxx xxx courses online, xxxx xxxxxxx xx xxx most important xxxxxxxxxx twice as xxxxxxxxx as xxxxx xxx xxxxx xxxxx as xxxxxxxxx as xxxxxxxxx xx she
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UPDATED JANUARY 2014 WEEK 2 TWO QUESTIONS
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Economics
Problem 1: xxxxxxxx Demand Analysis and Estimation
xxxxxxxx is researching xxxxxx xxx a restaurant business. xxx is xxxxxxxxxx xxxxx major attributes that she considers xxxxxxxxx xx her choice: taste, location, and xxxxxx xxx xxxxx xxx xxxxxx xx each xxxxxxxxxx however, differs xxxxxxxxx xx xxxx xxxx of restaurant she xx going to start. If xxx opens a xxxxxxxxxx in a xxxxxxxx xxxx of xxx Angeles, then xxxxx is the xxxx xxxxxxxxx attribute, three times as xxxxxxxxx xx location, and xxx times as important xx xxxxxx xx she xxxxx a xxxxxxxxxx xx the Los Angeles xxxxxxxxxxxx area, then location xxxxxxx three xxxxx as xxxxxxxxx xx xxxxx xxx xxx times as xxxxxxxxx as price. xxx xx considering two venues, respectively, a steak xxxxxxxxxx xxx x xxxxx xxxxxxxxxxx both of which are xxxxxx xxx same. She has rated xxxx xxxxxxxxx xx a xxxxx xx x to 100 for each xx the two xxxxxxxxx xxxxx of xxxxxxxxxxxx
Attribute  xxxxx xxxxxxxxxx  xxxxx 
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