Fundamentals of Microeconomics, Level B Final Assessment: Outline and Rubric Purpose of this Assessment The study of economics aims to understand and analyze the scarcity of resources and how they are used. Microeconomics focuses more specifically on the decisions made at the individual or firm level, rather than at an aggregate or national level. In this competency, you learned about the concept of the production function, calculating optimal levels of production and types of market structures. In this Final Assessment, you will demonstrate your understanding of these introductory microeconomic concepts by writing a paper that addresses these topics. Items Required for Submission 1. A 5 – 7 page paper not including the title page and references that uses 2 or more sources, adheres to APA standards and addresses the following: ● For each of the four options in the case study you will identify three (3) potential economic impacts considering both possible benefits and downsides and implications for the government and citizens on the island that Petrolo is located. ● Based on your analysis and research, make one or more specific recommendations to address the issue. Step ONE: Case Study Description As a consultant specializing in economics, you have been hired by the small island company of Petrolo, which is a private business that is regulated by a public utilities commission. Although the island landmass is small (about the size of Florida), it enjoys enormous oil reserves that rank number five in the world for high grade petroleum. To date Petrolo has not found it necessary to drill into its substantial, but at a higher production cost, of offshore reserves that are within the 18 mile territorial limit. Petrolo has prospered by pumping enough onshore oil to allow its government to provide handsome social Final Assessment: Outline and Rubric 1 Fundamentals of Microeconomics, Level B Final Assessment: Outline and Rubric benefits and low taxes to its population while maintaining full employment. Although it’s only industry is crude oil supply, the country enjoys one of the highest standards of living in the world. Unfortunately, the industrial economies of the world have slowed tremendously in petroleum consumption; world demand for oil is now at a 25 year low; oil prices are at about 30% of what they were a year ago. Today a barrel of oil is selling for $40 while Petrolo’s current average cost of pumping oil is $50 per barrel. As the special consultant to the company President, you have been asked to evaluate the economic impact of four options and make a specific recommendation for what the company should do. The options are: ● Option 1: Stop pumping until the market price reaches at least the extraction cost of $50 a barrel. ● Option 2: Keep pumping to provide some cash flow. ● Option 3: Prepare an analysis of potential export opportunities to other countries that have a higher demand leading to an ability to sell at $60 per barrel. ● Option 4: Finance entry into the leisure market with high-end hotels, casinos and entertainment venues. Although this would restrict drilling operations to the southern half of the company’s land holdings, the northern end of Petrolo could become a magnificent tourism venue for the world’s wealthy, which could also entice investment. Step TWO: Preparation Now that you have read through the given case study, it will be important to consider the deliverable for this Final Assessment. You will be developing a 5 – 7 page paper that includes at least 2 resources using APA standards. Specifically, for each of the 5 options provided above in the case study, you will identify three potential economic impacts considering both possible benefits and downsides and implications for the government and citizens on the island. In addition to this analysis of the diverse options for the company, you will also make one or more specific recommendations to address the issue. In order to provide the level of detail needed to provide a thorough analysis, you will need to review the competency content and examine where content terminology can be implemented to help support your key points. Step THREE: Write Your Paper The following outlines the structure of this paper: ● Title Page (Using APA) ● Introduction (1-2 paragraphs) ○ Describe briefly the purpose of the research paper and your goals for it. Final Assessment: Outline and Rubric 2 Fundamentals of Microeconomics, Level B Final Assessment: Outline and Rubric ○ Highlight components of the case and remember to write this from the perspective of an Economic Consultant directed toward the President of the company. (minimum 1 page) ● Option 1: Stop pumping until the market price reaches at least the extraction cost of $50 a barrel. ○ Identify three potential economic impacts of this option and integrate competency terminology ○ Note possible benefits and downsides, as well as implications for the government and citizens on the island that Petrolo is located ● Option 2: Keep pumping to provide some cash flow. (minimum 1 page) ○ Identify three potential economic impacts of this option and integrate competency terminology ○ Note possible benefits and downsides, as well as implications for the government and citizens on the island that Petrolo is located ● Option 3: Prepare an analysis of potential export opportunities to other countries that have a higher demand leading to an ability to sell at $60 per barrel. (minimum 1 page) ○ Identify three potential economic impacts of this option and integrate competency terminology ○ Note possible benefits and downsides, as well as implications for the government and citizens on the island that Petrolo is located ● Option 4: Finance entry into the leisure market with high-end hotels, casinos and entertainment venues. Although this would restrict drilling operations to the southern half of the company’s land holdings, the northern end of Petrolo could become a magnificent tourism venue for the world’s wealthy, which could also entice investment. (minimum 1 page) ○ Identify three potential economic impacts of this option and integrate competency terminology ○ Note possible benefits and downsides, as well as implications for the government and citizens on the island that Petrolo is located ● Recommendation(s) (minimum 0.5 pages) ○ Based on your analysis and research, make one or more specific recommendations to address the issue ● Conclusion (1-2 paragraphs) ○ Conclude your research with a summary of your major findings and ideas. ● References ○ Include a minimum of 2 different references are used throughout the paper in-text and within the References page. All APA rules for paper formatting, citing and references should be followed. Step FOUR: Complete Checklist for Submission Before you submit your work, check to see if you have met the criteria noted below. Did you: Final Assessment: Outline and Rubric 3 Fundamentals of Microeconomics, Level B Final Assessment: Outline and Rubric ✓ Provide an introduction that clearly presents the highlights of the case study and outlines the upcoming analysis? ✓ Accurately identify three potential economic impacts for each of the four options? ✓ Assess the benefits and downsides of each option while fully discussing the implications of each? ✓ Use business concepts and microeconomics terminology to provide the reader with a clear understanding of each scenario? ✓ Include a specific and clear recommendation based on an accurate analysis of the options? ✓ Comprehensively consider relevant factors to draw conclusions and provide actions? ✓ Verify that your solution being offered is viable and effective for the Petrolo company? ✓ Use at least 2 sources that are included in text and within the references page? ✓ Proofread your paper for any writing mechanics issues? ✓ Ensure your paper is 5 – 7 pages in length (not counting the Title Page and References Page)? Step FIVE: Submit Your Work ● Your completed files should be submitted through the Final Assessment page of your competency. ● Please note, for files smaller than 10MB (e.g., most Word documents), use the corresponding “+UPLOAD STUDENT FILE” button to upload your Final Assessment documents. For larger files of any type (e.g., voice over PowerPoint files, video presentations), please use the optional TEXT EDITOR to provide a URL where your tutorial faculty can download your file. ● How you create a download URL is up to you, but various free online providers, including Google Drive and Dropbox, offer this service. Please make sure that the URL you provide can be accessed by anyone with the link. For further instructions on how to create public links for uploaded files, consult the support pages for your chosen provider.
