ECON 2302 – PRINCIPLES OF MICROECONOMICS – FALL 2021
SHORT PAPER ASSIGNMENT
EMPIRICAL AND QUANTITATIVE ANALYSIS IN PROFIT ANALYSIS
BACKGROUND:
All students in Principles of Microeconomics classes at Collin College in the Fall 2021
semester are required to complete a short paper evaluating their empirical and
quantitative skills according to the State of Texas core objectives on empirical and
quantitative skills. This is a mandatory Collin College paper assignment designed and
administered through the Economics Department. The Texas Higher Education
Coordinating Board has defined the criteria of the core objective of “Empirical and
Quantitative Analysis” as “manipulation of numerical data or observable facts”, “analysis
of numerical data or observable facts”, and “informed conclusions”. These three criteria
are defined below and are the ones used for the assessment of your paper.
1. Manipulation of numerical data or observable facts: You must organize
numerical data or observable facts in a way that prepares the data for
analysis in order for you to gain an in-depth understanding.
2. Analysis of numerical data or observable facts: You must examine numerical
data or observable facts through methodical analysis in order to gain an
in-depth understanding.
3. Informed conclusions: You must synthesize findings drawn from analysis of
numerical data or observable facts in order to show an in-depth
understanding.
ASSIGNMENT INSTRUCTIONS:
Please write up your answers to the below presented assignment questions in a
minimum of 2 pages and a maximum of 4 pages including any potential references
Please rewrite the assignments questions before your answers. Please make sure you
follow the instructions and respond fully to the questions so that you have good
coverage of each of the three core objectives in your paper. Please format the writing
part of your paper double spaced, size 12 type, Times-Roman font, with 1-inch margins
at the top, sides, and bottom of each page. Please do not add a cover page. Your name,
your Collin College CWID number, and your Econ 2302 202 course section number
should be centered at the top of your first page.
The paper is due as announced on the syllabus. Please submit your paper as an
electronic file (word file or pdf file). Please save the file with this naming protocol:
Your last name-Your first name-Collin College ID-Econ2302.
This short paper is worth 10%. You will achieve a good grade for demonstrating:
1. Correct findings 4. Meeting the core objectives
2. Complete report 5. Following the instructions
3. Complete citations 6. Correct spelling and good use of grammar.
ASSIGNMENT INFORMATION:
Assume that EasyComp, a computer company operating in a perfectly competitive
market structure, produces affordable, easy-to-use home computer systems. EasyComp
has fixed costs of $250. EasyComp’s marginal cost of producing computers is $700 for
the first computer,
$250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for
the
sixth, and $500 for the seventh. Please respond to the following questions below by
drawing on the three criteria of the empirical and quantitative skills core objective.
1. Please fill in the missing cost values in the table below by drawing on the
above given information and by rounding your calculations to the nearest
whole number where you round numbers of 0.5 and above up and numbers
of 0.49 and below down. (criteria: manipulation of numerical data or
observable facts)
Q TC ATC TVC AVC MC
(Total Cost) (Average total
cost)
(Total variable
cost)
(Average
variable cost)
(Marginal cost)
0
1
2
3
4
5
6
7
1. Please state first at what price the break-even point would be and then briefly
describe how you found the break-even point based on values above.
(criteria: analysis of numerical data or observable facts)
2. Please state first at what price the shutdown point would be and then briefly
describe how you found the shutdown point based on the values above.
(criteria: analysis of numerical data or observable facts)
3. If EasyComp sells the computers for $500, please state whether EasyComp
is making a profit or a loss? Next, please describe how large the profit or loss
is and show your analysis. (criteria: analysis of numerical data or observable
facts)
4. Sketch a graph with MR, MC, and ATC curves to illustrate your answer and
show the profit or loss. (criteria: manipulation of numerical data or observable
facts)
5. Would you advise EasyComp to stay in business or shut down the business
based on the shown profit or loss? Please justify your conclusion! (criteria:
informed conclusion)
6. Based on the knowledge gained from the above analysis, what must any
future computer company that wants to enter this perfectly competitive market
make sure it can do in order to be profitable? (criteria: informed conclusion)
7. If the market structure were to change from perfect competition to
monopolistic competition, what would the now monopolistically competitive
computer company EasyComp have to do in order to become more profitable
compared to its peer computer companies? (criteria: informed conclusion)