AP Micro/Macro Economics

Choose an item to produce and then create a production system for it. Your product may be a good, service or something that is grown on a farm. It should be one-dimensional and may or may not have complex imputs.Describe the costs associated with your item’s inputs. Research its components and list its costs using actual market pricing. For the components that you do not find an actual cost for, estimate what the cost might be. All estimates must be justified. Also, detail what costs are fixed and those that are variable for your product.Create a market price for your product and then defend it relative to other competitive products. What characteristics of your product were key in determining its price in the marketplace?What quantity of your product do you anticipate selling on a monthly? Justify your estimate. Also, describe and defend the potential outlets for your product in its target market.Using the cost, price, and quantity estimates that you have created, project six month profitability.The write-up should be no more than 8 pages (12pt, Times New Roman) with appendices. The latter should detail the costs of your product and the assumptions behind them, the fixed and variable costs, and finally any extra credit.Extra Credit: create table 9.1 on page 221 for your product; create a table and graph that details the diminishing marginal productivity of your product (use man-hours needed to produce your product relative to the number of items produced).

Posted on January 3rd, 2008 by cjanus
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