Assignment:

 Part 1

Click on this link to view the companies in the Standard & Poor's 500 stock market index: http://www.cboe.com/products/snp500.aspx. These are 500 of the largest U.S. companies by market cap (market capitalization, the total value of the company).

Scroll down the list and select one company whose name begins with the first letter of your last name. For example, if your last name begins with a G, select a company that begins with a G. Once you have selected a company, click on this link to go to Yahoo Finance: http://finance.yahoo.com/. Once there, enter the symbol (also called "ticker") of your company in the box at the top left of page next to "Get Quotes," and click on "Get Quotes." Then look on the left side of the page under "Company," and click "Profile." Read the entire Profile, and visit the company's official website, to learn about the sector and industry the company operates in, and the goods or services the company sells. 

1. In two to three sentences, state the company you selected and briefly describe the sector and industry the company operates in, and the goods or services the company sells. Do not copy and paste text from any website or any other source. You must use your own words.

2. Select one specific good or service that the company sells. For the specific good or service, state one factor that would:

(a) Increase demand

(b) Decrease demand

For (a) and (b), use different factors, briefly explain why your stated factor would cause that effect and briefly state what would happen to equilibrium price and quantity.

3. For the same good or service in your answer above:

(a) Briefly state whether you believe it has a lower (more inelastic) price elasticity of demand less than 1, or a higher (more elastic) price elasticity of demand greater than 1. Briefly explain your answer based on the factors influencing price elasticity of demand that are relevant to your good or service.

(b) Based on your answer to (a), briefly state whether total revenue for this good or service would increase or decrease if price decreased. Briefly explain your answer by stating the relevant rule for the effect on revenue when price decreases, based on elasticity.

 Part 2

 1. Assume the U.S. government is considering placing a tariff on children's toys imported from China. In the market for children's toys, briefly state the effects this tariff would have on:

(a) the price in the U.S.

(b) the quantity demanded in the U.S. by domestic consumers

(c) the quantity supplied in the U.S. by domestic producers

(d) the quantity imported into the U.S.

2. State whether each would be an economic winner or loser as a result of the tariff:

(a) U.S. consumers

(b) U.S. producers

(c) U.S. economy as whole

(d) U.S. government

For (a) through (d), briefly explain your answer by applying the concepts of consumer surplus, producer surplus, total surplus, deadweight loss, and government revenue. 

3. Assume you are a Senator representing Alabama. Based on your answer to #2, would you vote for or against the tariff if you were basing your decisions on economics? Why? If you would vote for the tariff, briefly explain why you think someone would want to vote against it. If you would vote against the tariff, briefly explain why you think someone would want to vote for it.