Question Details

ECO 562 EXAM

					Economics

Economics provide us with the theory of demand and supply. Smoking cessation and prevention are now a time one of the most important topic and the most popular one too. The smoking is destroying the life of many and for people it has become a status symbol. The smoking is done by the person of each and every age group and it has become the symbol of fashion. It is quite difficult by the people to understand that once if become addicted, it will be very problematic to leave the habit and in turn can attract some of the very dangerous diseases which will harm the body. 
Even the poor people are addicted to this habit, they got addicted to it as because of extreme tension if their financial well being or because of the pressure at the work place. So people take out the easy way to get away from the stress and tension and opt smoking. But now many companies are taking good steps for its employees so it becomes easy for them to leave this habit and live a healthy life ahead. With the procedure the employees slowly will be able to drop their habit of smoking and turn themselves into their normal life. 
The employer is spending a lot of money to employ the people and make them aware that the smokers are not allowed in their industry, so that people can leave their habit and come forward to work. In this case, the bonus incentive to workers is provided if they quit smoking which is proved by a series of blood test. The bonus of $2000 per employee provided to employee- if they quit smoking and the initial cost to company will be $10000. 30 people quit smoking in this case and the total cash outflow for the company is $70000 which includes $10000 as fixed cost and $60000 ($2000*30) as variable cost. The bonus incentive is increased from $2000 to $3000 in the next year, but only 33 people quit smoking with the increased incentive which seems not feasible for the company. The total cash outflow in this case is $109000 which include $10000 as fixed cost and $99000 (3000*33) as variable cost. 
All the employees cannot be taken because it will be quite difficult to cover all the employees at once only, they can be started from one particular section and department and average could be taken (McEacherm 2008). The cost attributable to company in case of 30 employee is 2285.714 per employee and for 33 employee it is 3303 per employee. 

Assume you are going to model demand for online courses.  You DO NOT  need to look up any data for this question.  Discuss your approach.  What specific variables do you think are important determinants for quantity demanded (number of students enrolled in online programs)? What would influence your choice of model specification?
Demand of online courses these days are a lot in fashion. Everything is now a time easily available on online then why not courses. Earlier to learn any particular course one has to join the class. The classes were to be paid but in now a time all the courses are available online. One can learn anything through online. The cost is also negligible here. Now it does not matter that the person is capable to give the money of the teachers or not, they can learn the course at a very minimal cost through online. 
There are benefits of doing course online in numbers. In the coaching class, one has to attend daily and on the same time, so here the person becomes bound in that time only but in the online course, one can check the class anytime whenever the person feels like to be free and in the mood to learn. Also along with it if one class is missed in the table courses, it is totally missed and cannot retain the information shared in that class but in the online courses, no class is missed as such because if one does not get time now can see the course later on. 
	One can easily take the classes online. The students have to get enrolled for these courses online and then they can see all the classes which have been uploaded by the teacher. The students should be told about the more benefits of the online courses so that they should get motivated and get registered themselves for the classes. The students can see all the classes and the full course is going to be covered in these classes. One can see all these classes whenever they want to and at any time if they are registered online and they have been provided all the classes (Haley & Heise 2008).


					References
Haley,K & Heise,K (2008). Building a successful online course. IAP. 
McEacherm,W (2008).. Microeconomics:A contemporary introduction. Cengage Learning.

Appendix
Workers	Total Variable Cost	Total Fixed Cost	Total Cost	Marginal Cost	Average Variable Cost	Avg. Fixed Cost	Avg. Total Cost	Total Revenue	Profit
0	0	10000	10000	--------	0	 	 	 	 
5	10000	10000	20000	 	2000	2000	4000	 	 
10	20000	10000	30000	 	2000	1000	3000	 	 
15	30000	10000	40000	 	2000	666.6667	2666.667	 	 
20	40000	10000	50000	 	2000	500	2500	 	 
25	50000	10000	60000	 	2000	400	2400	 	 
30	60000	10000	70000	 	2000	333.3333	2333.333	 	 
35	70000	10000	80000	 	2000	285.7143	2285.714	 	 
									
If 33 employees quit smoking
Workers	Total Variable Cost	Total Fixed Cost	Total Cost	Marginal Cost	Average Variable Cost	Avg. Fixed Cost	Avg. Total Cost	Total Revenue	Profit
0	0	10000	10000	--------	0	 	 	 	 
5	240000	10000	250000	 	48000	2000	50000	 	 
10	600000	10000	610000	 	60000	1000	61000	 	 
15	780000	10000	790000	 	52000	666.6667	52666.67	 	 
20	900000	10000	910000	 	45000	500	45500	 	 
25	990000	10000	1000000	 	39600	400	40000	 	 
30	1050000	10000	1060000	 	35000	333.3333	35333.33	 	 
35	1086000	10000	1096000	 	31028.5714	285.7143	31314.29