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 considering 3 xxxxx attributes that xxx xxxxxxxxx xxxxxxxxx in her choice: xxxxxxxx xxxxxx and location.
If xxx continues xx xxxx xxxx xxxx and takes all xxx xxxxxxx online, xxxx xxxxxxx xx the most important xxxxxxxxxx xxxxx xx important xx price and xxxxx xxxxx xx xxxxxxxxx as location.
xxxx R=2P xxx R=3L, xxxx L=R/3 xxx P=R/2
If she xxxxx xxx job xxx attends school full xxxxx xxxx xxxxxxxx xxxxxxx xxxxx times xx important as ranking and xxxxx as important xx xxxxxx
xxxx xxxx xxx L=3R, xxxx x = L/2 xxx R= L/3
xxxxxxxxxxxxx  xxx  UOP 
Ranking Location Price
 80 50 45
 70 xx xx

xxxxx xx the xxx options should Roshima xxxxxx xx xxx xxxxx to xxxx her xxxxxxxxx job? (Calculate xxx total xxxxxxxx xxxxxxx xxxx xxxx school xxxxxx and xxxxxxxx Graph is not required)
Her xxxxxxxx utility xxxx attending xxx is given xxx
xxxxxxx x xxxxxxxxxx x 50*Location x xxxxxxxx =
Substituting the values given xx question
80R x [50*(R/3)] x xxxxxxxxxx x 80R + xxxxxx +22.5R =
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ECONOMICS _ A+ tutorial
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xxxxxx for your xxxxxxxxx Please xxxxxxx xx if you have any clarification.
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xx xxxxxxx xx researching xxxxxxxxxxxx where xxx could study xxx her xxx xxxxxxx xxx xx considering 3 major xxxxxxxxxx that xxx considers xxxxxxxxx in xxx choice: ranking, price, xxx location. xxx xxxxx xxx places on xxxx xxxxxxxxxx however, differs xxxxxxxxx xx whether she xxxxxxx xxxxxxxxx employed during her xxxxxxx or xxxxx xxx job xxx xxxxxxx on xxx degree. If xxx continues to work full xxxx and xxxxx all her xxxxxxx online, then ranking is the xxxx xxxxxxxxx xxxxxxxxxx twice as xxxxxxxxx xx price and three xxxxx as xxxxxxxxx xx xxxxxxxxx If she xxxxx xxx job and attends xxxxxx xxxx time, xxxx xxxxxxxx xxxxxxx xxxxx times as xxxxxxxxx xx xxxxxxx and twice xx xxxxxxxxx as xxxxxx She is considering two xxxxxxxxxxxxx respectively, the xxx program at Arizona State University xxxxx and xxx xxx xxxxxxx at xxxxxxxxxx of xxxxxxx (UOP), both xx which are priced at xxxxxxxxxxxxx $25,000. She xxx rated each xxxxxxxxx on x xxxxx of 1 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 Week 2 xxxxxxxxxx xxxxxxxx Demand Analysis and Estimation xxxxxxx xxxxxxxx
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Consumer xxxxxx Analysis and xxxxxxxxxx Applied xxxxxxxx
Student Name:
xxxxxxxxxxx
xxxxxxxx
Course: xxx 640 xxxx x
Date
Consumer Demand Analysis and xxxxxxxxxx Applied Problems
Please, xxxxxxxx xxx xxxxxxxxx two applied problems in x Word or xxxxx xxxxxxxxx Show all your calculations xxx explain xxxx results. xxxxxx your xxxxxxxxxx in xxx xxxx xxx by using xxx Assignment xxxxxxxxxx xxxxxxx
xxxx x xxxxxxxxxx Study Guide
xx Roshima xx researching xxxxxxxxxxxx xxxxx she xxxxx study for her xxx degree. She is xxxxxxxxxxx 3 xxxxx xxxxxxxxxx that xxx considers important in xxx xxxxxxx ranking, xxxxxx and location. The xxxxx xxx xxxxxx on each xxxxxxxxxx xxxxxxxx differs xxxxxxxxx to whether xxx remains fulltime xxxxxxxx xxxxxx xxx xxxxxxx xx xxxxx xxx xxx and focuses xx xxx degree. xx xxx xxxxxxxxx xx xxxx full time and xxxxx all her xxxxxxx xxxxxxx then xxxxxxx xx xxx most important xxxxxxxxxx twice as important as xxxxx xxx three xxxxx as xxxxxxxxx as xxxxxxxxx xx xxx
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UPDATED JANUARY 2014 WEEK 2 TWO QUESTIONS
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xx
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xx
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Economics
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Problem xx Consumer xxxxxx Analysis and xxxxxxxxxx
Patricia is xxxxxxxxxxx xxxxxx xxx a restaurant xxxxxxxxx xxx is xxxxxxxxxx three xxxxx xxxxxxxxxx xxxx xxx xxxxxxxxx xxxxxxxxx in her xxxxxxx xxxxxx xxxxxxxxx xxx xxxxxx xxx xxxxx xxx xxxxxx xx each xxxxxxxxxx xxxxxxxx xxxxxxx according xx xxxx xxxx xx xxxxxxxxxx she is going xx start. xx xxx opens x restaurant xx a xxxxxxxx area xx xxx Angeles, xxxx taste xx the xxxx xxxxxxxxx attribute, xxxxx times as important as xxxxxxxxx and two times xx important xx price. If xxx opens a xxxxxxxxxx in the xxx Angeles xxxxxxxxxxxx area, xxxx location xxxxxxx three xxxxx xx xxxxxxxxx as taste xxx xxx times xx important xx xxxxxx xxx xx considering two xxxxxxx respectively, a xxxxx xxxxxxxxxx xxx x xxxxx xxxxxxxxxxx xxxx of xxxxx are priced xxx xxxxx xxx xxx rated xxxx attribute on a scale of x xx xxx for each of the xxx different xxxxx xx restaurants.
xxxxxxxxx  Steak xxxxxxxxxx  xxxxx 
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