Econs - 1089 Words

INTRODUCTION TO MANAGERIAL ECONOMICS Dr. Gong Jie National University of Singapore Why Do We Study Economics ï  ¶ People have to â€Å"Choose† â™ ¦ Resources are scarce. â™ ¦ There is No Such Thing as Free Lunch! ï  ¶ Economics: the science of Rational Choice â™ ¦ Rationality: the basic assumption â™ ¦ Rational Choice: Economic agents use all the information available to make decisions that most efficiently satisfy their needs and achieve stated objectives. â™ ¦ How do people make rational choice? This is the subject of Economics! Paul A. Samuelson’s definition of Economics ï  ¶ â€Å"Economics is the study of how men and society choose, with or without the use of money, to employ scarce productive resources, which could have alternative uses, to produce various†¦show more content†¦What is the cost if you run you own restaurant? ï  ¶ Suppose that you own a house on Orchard Road, and you decide to run a restaurant, your total cost would include: ïÆ' ¼Explicit Cost: ïÆ' ¼Implicit Cost ïÆ'ËœUtility: electricity, water and gas ïÆ'ËœThe rental income you give up ïÆ'ËœMaterial ïÆ'ËœYour possible employment income ïÆ'ËœFurniture and Equipment ïÆ'ËœWage paid to employees Economic Modeling ï  ¶ Models are simplifications†¦like maps ï  ¶ Resemble reality ï  ¶ Abstract from the rich details ï  ¶ Help understand the fundamental forces Endogenous vs Exogenous Variables ï  ¶ Exogenous variables: Variables that have values that are taken as given in the model. ï  ¶ Endogenous variables: Variables whose value is determined within the model being studied. ï  ¶ Analyze the business of a lemonade stand: ïÆ' ¼Exogenous ïÆ' ¼Endogenous ïÆ'ËœCustomer volume ïÆ'ËœPrice ïÆ'ËœInput price ïÆ'ËœQuantity ïÆ'ËœTemperature ïÆ'ËœProduct Quality ïÆ'Ëœ# of competitors ïÆ'ËœAdvertisement Decision making has two components ï  ¶ First, there is a goal â™ ¦ Basic Managerial Objective: to maximize net benefits ï‚ § Net Benefits = Total Benefits - Total Costs ï‚ § Profits = Revenue – Costs â™ ¦ Objective function: functional relationship between the value of the goal, and the values of endogenous variables and exogenous variables. ï  ¶ Second, there is a set of options taken to achieve the goal: â™ ¦ How much of the endogenous variable should be used to maximize net benefits? Find the optimal choice: Marginal (Incremental) Analysis ï  ¶ Marginal Benefits (MB): ChangeShow MoreRelatedEcon984 Words   |  4 PagesMaximum four per group, all students must be registered in the same section of the same course. Names must be in alphabetical order on the cover page. †¢ Graded work will be available for pick-up beginning on the afternoon of Friday March 14 in the Econ Distribution Center, Dunning Hall Room 334. You will require your student card. †¢ This assignment covers material from Chapters 20-24 of the text. True, False, or Uncertain [48 marks - 6 marks each] Explain why each of the followingRead MoreEcon1249 Words   |  5 PagesECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Extra Problems #1 Suggested Answers and Comments Notice: (1) This set of extra problems contains 25 multiple-choice problems and 6 analytic (short-answer) problems. These problems are not homework and will not be graded. The aim of these problems is to provide you with additional exercises. (2) I will give solutions of the assignment and the â€Å"extra-problem† set after the due date. Page 1 Problem 1~25: MultipleRead MoreEcon Ans975 Words   |  4 PagesECON2103 – Problem Set (1) Multiple Choice Questions: 1. Understanding opportunity cost You work as an assistant coach on the university basketball team and earn $12 per hour. One day, you decide to skip the hour-long practice and go to the local carnival instead, which has an admission fee of $7. The opportunity cost of skipping practice and going to the carnival, valued in dollars is _________. 1) 2) 3) 4) $20 $12 $19 $7 2. Determining opportunity cost Winona is deciding whether to buy a suitRead MoreEcon2406 Words   |  10 Pagesï » ¿Homework Assignments Problems Applications Chapter 1 Homework 4. You win $100 in a basketball pool. You have a choice between spending the money now or putting it away for a year in a bank account that pays 5% interest. What is the opportunity cost of spending the $100 now? 5. The company that you manage has invested $5 million in developing a new product, but the product is not quite finished. At a recent meeting, your salespeople report that the introduction of competing productsRead MoreEcon5686 Words   |  23 Pagesï » ¿[Q#2020] If buyers’ value for bicycles increase, the demand for bicycles will ______.a. Increase [Q#2053] A supply shortage in the market for lettuce will _______ the equlibrium price of lettuce. a. Increase [Q#2057] At any moment the equilibrium price in the market for tablet computers will be determined by ________ . c. Buyers and the sellers of tablet computers [Q#2059] The equilibrium price is also known as c. the market-clearing price. [Q#4021] Along a demand curve with a constant slopeRead MoreEcon4429 Words   |  18 PagesECON 11026 Assignment Item 1 . S0183732 Part A Q1ai) Article can be found in the following website : http://www.skynews.com.au/businessnews/article.aspx?id=738928amp;vId= The article ‘ Strong jobs figures put rate cut in doubt’ described that there is an increase in employment in the last one month which might help in putting hold to rate cut by Reserve Bank of Australia. There are positive signs in Australian job market with increase in 44000 employed peopleRead MoreEcon754 Words   |  4 PagesAssume that a cargo ship carrying the merchandise of a cloth merchant has been wrecked. Such a setback will be accounted as the merchant’s: Part I: Choose the one alternative that best completes the statement or answers the question. (1 Point each) 1. Which of the following is a positive statement? a. Heavy snowfall drives up the demand for heaters. b. Fiscal expenditures should be increased to combat recession. c. Government should encourage foreign direct investments to generate employmentRead MoreEcon634 Words   |  3 PagesQuestion Results Question 1: In our  macro  Circular Flow, the Businesses are choosing to  borrow  Ã‚  _____________ billion dollars. Your Answer(s): * 5000 Correct Answer(s) (in green): * 5000 * 3500 * 1000 * 500 Question 2: In the Private Sector, there are many  choices  to be made by Business managers regarding which â€Å"projects† to borrow for and which â€Å"projects† to invest in.  Ã‚  These choices often contain a great deal of ______________________  as well as  the potential for benefitsRead MoreEcon1039 Words   |  5 PagesPreface In our data analysis we do some univariate analysis before proceeding to models. In survival analysis it is highly recommended to look at the Kaplan-Meier curves for all the categorical predictors. This will provide insight into the shape of the survival function for each group and give an idea of whether or not the groups are proportional. We also consider the tests of equality across strata to explore whether or not to include the predictor in the final model. For the categorical variablesRead MoreEcon1239 Words   |  5 PagesQuestions based on â€Å"Too Big to Fail† movie Watch the movie and answer the following questions briefly. Upload your answers on Moodle using the Link â€Å"Submit Assignment on Too Big to Fail here† 1. When Lehman brothers was in trouble, Henry Paulson called the other banks’ CEOs on a meeting to find a solution to Lehman Brothers’s problem? Why did Henry Paulson think that a private sector solution, instead of government bailout, was needed? 2. (Up to about 43:00 of the movie) Why did the Lehman