While sipping a cup of coffee, CEO William Corke began to reminisce. It seemed like yesterday, but it was actually more than 10 years ago when he had convinced the board of directors of National Foods, Inc., to go into the soft drink business. Here he was a decade later, sampling a product that his VP of Marketing, Samantha Gordon, was telling him would be an even stronger “growth engine” for the company than bottled water. She had pointed out to him that in 2003 Caribbean consumers spent $1 billion on coffee. Although this amount was far less than the $3 billion spent annually for tea, it was five times as much as people spent on coffee a decade ago. “It’s obvious,” she told him, “National Foods must get into the coffee business.” As he poured his second cup of coffee, Bob had to admit that even he had begun to prefer coffee over tea. He decided to call Samantha into his office to discuss the matter further. “Okay, Samantha,” Bob began, “You’ve always had a good instinct for what’s new in the market. But before we leap into this, I want a report on exactly why you believe coffee will be the real spark to our company’s growth in the coming 5 years. After all, in our business it’s all about ‘share of stomach.’ If people are drinking more coffee, then they might be drinking fewer soft drinks and bottled water, so we’d be cannibalizing our own products. I’d feel much better if you could help me understand why this wouldn’t be the case. Furthermore, what are the key determinants of the demand for coffee? Could this be just a fad? Already people are starting to tire of their low-carb diets.

1. Based on the scenario, prepare a response to the CEO describing how five key demand determinants that could affect the demand for coffee.

2. Based on your response to question 1 above, write the expression for the following for coffee:

a. Demand function ( 5 marks)

b. Demand curve

3. How might people respond to changes in the price of competing products such as bottled water and carbonated soft drinks? d. Explain the factors that would determine if coffee is a ‘luxury’ good, or a necessity.

What negative behaviors may result within an organization from tournament-based promotions?

Identify one pro and one con of a standards-based promotion system.

describe one long-lasting impact you feel Covid-19 will have on the US labor market.

Andrew sees a classified ad from Beth offering a used smartphone for $15. On the opposite page, he sees a big color as from a national electrinics chain offering a new smartphone for $300. Andrew values a smartphone at $335 as long as it works, regardless of whether it is new or used.

For each of the scenarios listed, determine the principle illustrated by each person's reasoning.

Scenario Moral Hazard Adverse Selection

__________________________________________________________________________________________________________________________________________________

Suppose Andrew buys the new smartphone from the national electronics chain,

thinking, "Someone would ask $15 for a used smartphone only if it didn't work well."

_____________________________________________________________________________________________________________________________________________________

Suppose Beth, the seller of the smartphone, knows the phone works well-she is selling it

only because she got a better model as a gift. She thinks about asking $50 and offering

a guarantee: She will replace the smartphone with a new $300 smartphone if it turns

out not to work. Then she thinks, "That's not a good idea! Someone can just buy it,

handle it carelessly, and, if it breaks, can pretend it didn't work and get a new smartphone

for $50-meanwhile, I would be out $250!"

____________________________________________________________________________________________________________________________________________________

Why is Beth unable to sell Andrew the smartphone? Check all that apply.

A. Adverse selection can cause buyers to avoid purchsing high-quality goods because of the uncertainty about their quality.

B. Moral hazard can prevent sellers from offering guarantees of quality because they can't be sure that buyers won't try to take advantage of the guarantees by filing false claims.

Please: Answer the questions directly and clearly. Often times, people reply with very long answers and it makes it very confusing to understand which are the correct answers. If you can make a chart kind of like the one I made above and if you can put an check mark to say whether it is Moral Hazard or Adverse Selection, that would be apprecited. Or say, for scenario 1 it so and so and for scenario 2 it is so and so. The last question is multiple choice. Please answer clearly whether A or B is correct or both A and B is correct.

According to Villenueva, the source of the wealth that forms the basis of philanthropic funding in the United States would be better thought of as a just reward for effort and ingenuity than theft.

true

false

For Adam Smith, the capacity for the division of labour and thus economic growth was principally dependent on:

The quality of the land.

The wealth of the land-owning class.

The extent of the market.

The concentration of trade in a small number of chartered companies in the colonies.

All of the above.

None of the above.

The importance of e-business for decision making

1. In general, what are some of the tactics the government uses to correct market failures? List 3 and provide a brief explanation of the opportunity costs involved in correcting these failures.

2. Briefly discuss the key difference(s) between Keynesian Economics and Neoclassical Economics.

Emerging business scenario that might require e-business come into actions

In the early months of 2020, many sectors in Hong Kong have been hit hard by the COVID19 outbreak. Investigate how the COVID19 affects the various aspects of the economy, such as Gross Domestic Product (GDP), import and export, economic growth/economic recession, unemployment, and cost of living (inflation/deflation)?

Have the government remedial policies been able to revitalize the economy?

What appropriate policies should be taken to revitalize the economy of Hong Kong if your group were one of the policy-makers in the government leadership?

discuss about Using viral marketing strategy on Wechat

Listed below is information on production for a firm that produces wheat. They can vary the number of workers. The land they use is fixed at one acre. The Wage is $ 20, The land costs $100, The wheat sells for $ 10 per unit.

# of workers | Total product

1...............................20

2................................70

3..............................130

4..............................180

5...............................210

6................................220

7.................................222

3) With 4 workers TOTAL COST is equal to ?

4) With 6 workers TOTAL REVENUE equal to?                   

5)With 7 workers, TOTAL PROFIT is equal to ?

6) If all these workers have the same level of skill, why does worker 6 have a LARGER marginal product than worker 7 ?

7) How many workers should this firm hire to maximize its profits ?

8) If this firm does hire the number of workers you answered for question (7), they will have TOTAL PROFITS equal to ?

9) If all these workers have the same skill level, why does worker 3 have a LARGER MPL than worker 2 ?

10) What is the amount of TOTAL FIXED costs for this firm and for all firms in the SHORT run.?

Comment on whether the price war would likely to end soon. (Base on your knowledge on Cartel and take Russia and OPEC as an example)