Microeconomics

  Microeconomics     A reasonable topic could be analyzing a business’s costs. Analyzed from any of several different perspectives. Use a market model like the one in Figure 11.6 page 245 or Figure 12.4 page 261, depending on the type of company you chose. Suppose that their operation costs rise due to an increased minimum wage rate, increased taxes or increased healthcare costs. Illustrate this as a shift up and to the left of the cost curves. Do not move the demand curve. For example it could be McDonalds or any restaurant. Demand remains constant (people still eat) but what happens if there is an increase in the minimum wage rate. This is illustrated as the cost curves, as a group, shifting up and to the left in the model. Costs rise, margins decline, profits shrink, firm earnings fall and stock price falls. Same is the analysis for most any business that experiences an increase in costs. Chipotle and increase beef, avocado, dairy, etc. costs. Starbucks and increases in dairy costs, etc. Alternatively, you could illustrate a decline in fuel costs and the likely impacts on all the above listed metrics (costs, revenues, profits, earnings, etc). If you want to analyze a decline in natural gas prices, cost fall, costs curves shift down and to the right, margins increase, profits increase and firm stock price rises, etc. Maybe it is starting to get cold outside. Students coming to school will need coats, gloves, scarfs, snow boots, etc. Retail stores selling these types of products will experience increased demand. The stores may not have to discount their prices as much and as a result will sell more of their inventory at higher prices making greater margins and higher profits. This should be illustrated as an increase in demand for these products. Macy’s (M) is a good example that comes to mind, Kohls (KSS), Nordstrom (JWN). You need at least three references for your research paper. One should be your text. You then just need to find a couple of news stories like from CNBC.com, WSJ.com or Bloomberg.com or some legitimate news source that references your view. Your paper should have at least 3 pages of text, not including the Title page or References page. You can use whichever format you want, MLA, APA, Chicago. You do not need data to computer generate the graph. You can draw the graph by hand, like I would in the classroom on the chalkboard. You can draw your graph on paper then scan it into a digital format. You can draw the graph with a software program like PPT or Word, or whatever works for you. Then illustrate your shift of the curves. Be sure to label the axes and give your graph a title and etc. Don’t make this harder than it has to be. Read the instruction in the Syllabus. Include your purpose statement like the following “The purpose of this research project is to show that due to a drought in California and Texas and the resulting decline in beef cattle numbers, restaurants are experiencing sharp increases in costs that are reducing margins, profitability and could cause stock prices to fall.”