Situation: Econoville is a growing town on the outskirts of Toronto. It started out as a small village but the recent expansion of GO transit to the town has resulted in an influx of new families living in newly built housing developments that surround the older downtown. The town's growth provides many opportunities for new and existing businesses. To better manage the growth, the town has formed a business association. Hearing of your success in economics class, the president of the local business association is considering hiring you as a consultant. Before she is willing to do so, she wants to check your understanding of economics by giving you some practice scenarios. (This is a COVID-free world!) Explain what is happening in the following scenario. Provide advice to the business owner on their best strategies. Be sure to apply at least 3 economic concepts studied in class to each situation. Where appropriate you can include graphs. You do not need to do any additional research to answer this question. Economic Concepts: 1. Supply and Demand 2. Elasticity 3. Marginal Utility 4. Cost Structures 5. Market Structure Scenario: Troy Barnes has finished his training as an air conditioner repair person. He is trying to decide whether to open his own business or take a job with the Econoville division of ACME Heating and Cooling services. Currently ACME is the only repair service in town. Customers often complain that they have to wait several days for ACME to repair their air conditioning and that ACME charges a high price. At ACME he would be paid a weekly salary. If he opened his own business he would charge per repair. What things should he take into consideration when making his decision? What would you recommend he do?
Situation: Econoville is a growing town on the outskirts of Toronto. It started out as a small village but the recent expansion of GO transit to the town has resulted in an influx of new families living in newly built housing developments that surround the older downtown. The town's growth provides many opportunities for new and existing businesses. To better manage the growth, the town has formed a business association. Hearing of your success in economics class, the president of the local business association is considering hiring you as a consultant. Before she is willing to do so, she wants to check your understanding of economics by giving you some practice scenarios. (This is a COVID-free world!) Explain what is happening in the following scenario. Provide advice to the business owner on their best strategies. Be sure to apply at least 3 economic concepts studied in class to each situation. Where appropriate you can include graphs. You do not need to do any additional research to answer this question. Economic Concepts: 1. Supply and Demand 2. Elasticity 3. Marginal Utility 4. Cost Structures 5. Market Structure Scenario: Troy Barnes has finished his training as an air conditioner repair person. He is trying to decide whether to open his own business or take a job with the Econoville division of ACME Heating and Cooling services. Currently ACME is the only repair service in town. Customers often complain that they have to wait several days for ACME to repair their air conditioning and that ACME charges a high price. At ACME he would be paid a weekly salary. If he opened his own business he would charge per repair. What things should he take into consideration when making his decision? What would you recommend he do?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Situation:
Econoville is a growing town on the outskirts of
Toronto. It started out as a small village but the recent
expansion of GO transit to the town has resulted in an
influx of new families living in newly built housing
developments that surround the older downtown. The
town's growth provides many opportunities for new
and existing businesses. To better manage the growth,
the town has formed a business association. Hearing
of your success in economics class, the president of the
local business association is considering hiring you as
consultant. Before she is willing to do so, she wants to
check your understanding of economics by giving you
some practice scenarios. (This is a COVID-free world!)
Explain what is happening in the following scenario.
Provide advice to the business owner on their best
strategies. Be sure to apply at least 3 economic
concepts studied in class to each situation. Where
appropriate you can include graphs. You do not need
to do any additional research to answer this question.
Economic Concepts:
1. Supply and Demand
2. Elasticity
3. Marginal Utility
4. Cost Structures
5. Market Structure
Scenario:
Troy Barnes has finished his training as an air
conditioner repair person. He is trying to decide
whether to open his own business or take a job with
the Econoville division of ACME Heating and Cooling
services. Currently ACME is the only repair service in
town. Customers often complain that they have to wait
several days for ACME to repair their air conditioning
and that ACME charges a high price. At ACME he
would be paid a weekly salary. If he opened his own
business he would charge per repair. What things
should he take into consideration when making his
decision? What would you recommend he do?
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