Subsidiary of Seattle-based Starbucks Corp – Economics Assignment Help

Assignment Task

Microeconomics
Qs. 1. 

• Suppose the price of sugar decreases. Then, will there be a shortage or surplus in the tea leaf market? Explain with a diagram.
• Suppose there is an increase in the wage of tea farmers. Then, will there be a shortage or surplus in the tea market? Explain with a diagram.
• How will the market clearing price and the equilibrium quantity be affected by these changes?
• Explain in detail with diagram.

Q2.Starbucks Canada to Open 150 New Outlets, Biggest
Expansion Ever
Financial Post
February 8, 2013
Thanks in part to Target, Starbucks Canada will be undertaking the biggest expansion effort in its history this year, with plans to open more than 150 new locations across the country. The subsidiary of Seattle-based Starbucks Corp. will open outlets inside many of the 124 Target locations opening in Canada in 2013 beginning next month — but the exact number is still a secret, Starbucks Canada president Annie Young-Scrivner said Friday The growth is also a response to [the] company’s successful bid to tap into the Canadian palate with its burgeoning Blonde roast coffee in a way that it had not before, bringing a host of new customers through its doors, she said in an interview on FridayAfter the first nine months, Blonde grew to represent 12% of Starbucks Canada brewed coffee sales. Since the company began a sampling and marketing push last month in Canada, the lighter blend now accounts for 20% of those sales. Typically 38% of Starbucks Canada customers drink dark roast and 42% drink medium roast, she said. “Some people thought our roast was too dark before. We had a lot of customers who would come to us for their lattes, but would go somewhere else for their coffee. I think our mix will continue to shift more towards the Blonde roast.” … (Source: Financial Post) Some salient points about the Starbucks expansion is given below: Starbucks can increase output by hiring more labour, or by increasing its plant size. Or it can both increase its plant size and hire more labour. Starbucks can increase its plant size by either replaci an existing café with a larger one, or expanding the number of cafés. The decision turns on comparing costs, and Starbucks has figured that it minimizes cost by expanding the number of cafés and hiring more labour. The Average cost and Marginal Cost curves are given below in Figure 1:The Average total cost curves, the original ATCO and when an extra café is added ATC1 is shown in Figure 2.
Answer the following questions based on the information above:
a. The following is the cost calculation of the Starbucks café. Fill in the blanks for A,B,C,D, and E. Show the calculations (2 x 5=10) Labours (Workers per day) Output (coffees per day) Total cost (dollars per day) Marginal Cost (MC) (dollars per coffee) Average Total Cost (dollars per coffee)
A 0 0 1000 B 10 400 A 2 4.5
C 20 1000 2600 C 2.6
D 30 1300 3400 2.67 E
E 40 1500 B 4 2.8
F 50 1600 5000 D 3.13
b. To expand its capacity, which is better for Starbucks: increasing the size of existing cafes or adding more new cafes? Give proper reasons. (3 Marks, 150 words)
Q4. Microsoft Windows 8 to Go on Sale in October. Microsoft announced that its Windows 8 operating system will be released in October 2012, three years after Windows 7 went public. Windows 8 will be available in 109 languages across 231 markets worldwide.


THE QUESTIONS
Is Microsoft a natural monopoly or a legal monopoly? 
Does Microsoft price discriminate or do the different prices of Windows reflect cost differences? Sketch a demand curve for Windows, Microsoft’s marginal cost curve, and the distribution of the total surplus between consumers and Microsoft. Write minimum 50 words per question Is Offshore Outsourcing Bad or Good for Canada? The Royal Bank of Canada, Bell Canada, and Sears Canada engage in offshore outsourcing. They buy services from firms in other countries. Buying goods and components has been going on for centuries but buying services such as customer support call-centre services is new and is made possible by the development of low-cost telephone and Internet service. Should this type of offshore outsourcing be discouraged and penalized with taxes and regulations? Provide arguments on why Is Offshore Outsourcing Bad or Good for Canada?