...Chapter Two The Production Possibility Model, Trade, and Globalization Learning Objectives After you teach the material in this chapter, your students should be able to do the following: 1. Demonstrate opportunity cost with a production possibility curve. 2. State the principle of increasing marginal opportunity cost. 3. Relate the concept of comparative advantage to the production possibility cure. 4. State how, through comparative advantage and trade, countries can consume beyond their production possibilities. 5. Explain how globalization and outsourcing are part of a global process guided by the law of one price. Chapter Outline This is meant to be an outline and summary of what your students read in this chapter in the text, both in terms of concepts and examples. Headings and subheadings are tagged with the number of the learning objective (LO) to which the material in that section most closely relates and the associated PowerPoint slide numbers, so you may also use this to help you outline your lecture. Material followed by a ( is new to the 8th edition. • The Production Possibility Model, Trade, and Globalization • The three main coordination problems are reviewed, and students are reminded about the concept of opportunity cost, which will be central in this chapter to understand production possibilities. • The Production Possibilities Model (LO1) [PPT Slides 3 & 4] • Production...
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...1 Introduction: What Is Economics? Chapter Summary Economics is about making choices when options are limited. Options in an economy are limited because the factors of production are limited. We can use economic analysis to understand the consequences of our choices as individuals, organizations, and society as a whole. Here are the main points of the chapter: • Most of modern economics is based on positive analysis, which answers the question “What is?” or “What will be?” Economists contribute to policy debates by conducting positive analyses about the consequences of alternative actions. • Normative analysis answers the question “What ought to be?” • The choices made by individuals, firms, and governments answer three questions: What products do we produce? How do we produce the products? Who consumes the products? • To think like economists, we (a) use assumptions to simplify, (b) use the notion of ceteris paribus to focus on the relationship between two variables, (c) think in marginal terms, and (d) assume that rational people respond to incentives. • We use macroeconomics to understand why economies grow, to understand economic fluctuations, and to make informed business decisions. • We use microeconomics to understand how markets work, to make personal and managerial decisions, and to evaluate the merits of public policies. Learning Objectives 1. 2. 3. 4. 5. List the three key economic questions. Discuss the insights from economics for a real-world problem such as...
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...ECON 515 MACROECONOMIC POLICY FALL 2012 Monday & Wednesday 8:00AM-9:30AM 9:50PM-11:20PM 1:10PM-2:40PM Rawls 3082 INSTRUCTOR: DR. GERALD J. LYNCH Office: Rawls 4039 Phone 494-4388 lynch@purdue.edu Secretary: Sherry Fisher 496-7227 Office Hours: Monday and Wednesday 3:00-4:00 and by appointment Introduction to the topic: As recent turmoil in the financial markets has demonstrated, macroeconomic fluctuations in the economy can create a difficult operating environment for the firm. This situation is further complicated by the fact that it is an environment over which the firm has little control. Even though the firm cannot control the environment, it can still react to economic conditions in ways that minimize its uncertainty as long as it understands the constraints it is facing. The purpose of this course is to help in an understanding of the macroeconomy. Macroeconomics is that branch of economics that seeks to understand and explain changes in output, general prices, employment, interest rates, foreign exchange rates, the balance of payments, and other related phenomena. Emphasis is given in this course to analyzing financial markets where interest rates are determined. We will spend more time than usual on the financial markets this year in response to the uncertainty in that environment today. Also, since the macroeconomic environment in this country is increasingly influenced by international conditions, the factors underlying trade and exchange...
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...Chapter 8 Producer and Consumer Surplus consumer surplus — the value the consumer gets from buying a product less its price. producer surplus — the price the producer sells a product for less the cost of producing it. Burden of Taxation A tax paid by the supplier shifts the supply curve up by the amount of the tax. The loss of consumer and producer surplus from a tax is known as deadweight loss . Deadweight loss is shown graphically by the welfare loss triangle — a geometric representation of the welfare cost in terms of misallocated resources caused by a deviation from a supply/demand equilibrium. The cost of taxation includes the direct cost of revenue paid, lost surplus, and administrative cost. Interestingly, in terms of aesthetics, people have come to like the style of Paris roofs; it is one of the many things that makes Paris distinct. Including aesthetics complicates the analysis enormously. Economic reasoning is based on the architectural view that form follows function. Who Bears the Burden of a Tax? Taxes are like hot potatoes: Everyone wants to pass them on to someone else. Nobody wants to pay taxes, and there are usually large political fights about whom government should tax. For example, should the Social Security tax (mandated by the Federal Insurance Contributions Act, or FICA) be placed on workers or on the company that hires them? The supply/demand framework gives an unexpected answer to this question. Burden Depends on Relative Elasticity ...
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...California University of Business and Technology School of Management Studies BA 360 Principles of Microeconomics Table of Contents Chapter 1 Ten Principles of Economics 3 Chapter 2 Thinking Like an Economist 7 Chapter 3 Interdependence and the Gains from Trade 10 Chapter 4 The Market Forces of Supply and Demand 13 Chapter 5 Elasticity and Its Application 20 Chapter 6 Supply, Demand, and Government Policies 26 Chapter 7 Consumers, Producers, and Efficiency of Market 31 Chapter 8 Application: The Costs of Taxation 35 Chapter 9 Application: International Trade 39 Chapter 10 Externalities 42 Chapter 11 Public Goods and Common Resources 45 Chapter 12 The Design of the Tax System 47 Chapter 13 The Costs of Production 49 Chapter 14 Firms in Competitive Markets 53 Chapter 15 Monopoly 57 Chapter 16 Monopolistic Competition 61 Chapter 17 Oligopoly 64 Chapter 18 The Markets for the Factors of Production 68 Chapter 19 Earnings and Discrimination 73 Chapter 20 Income Inequality and Poverty 76 Chapter 21 The Theory of Consumer Choice 79 Chapter 22 Frontiers of Microeconomics 82 Chapter 1 Ten Principles of Economics I. Significance * How people make decisions * How people interact * How the economy as a whole works II. Highlights The word economy comes from the Greek word oikonomos, which means "one who manages a household." A household faces many decisions, which...
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...to conduct the study. Finally, we would be happy if the findings of this study could make any contribution in the field of business efficiency. Department of Finance Page 2 Table of Content 7 Abstract Chapter 01: Context and Rationale Preludes: the General Scenario Rationale of the Study Objectives Methodology: Primary & Secondary Sources Limitation Chapter 02: Framework of Case Study Chapter: Foundations of Group Behavior Case Incident 1 Case Incident 2 Chapter: Understanding Work Teams Case Incident 1 Case Incident 2 Chapter 03: Conclusion & Recommendations Conclusion Findings References Department of Finance 8 8 9 9-10 10 11-14 15-17 17-19 20-21 22-24 25-28 29 30 30 Page 3 Abstract Organizational Behavior (OB) is the study and application of knowledge about how people, individuals, and groups act in organizations. It does this by taking a system approach. That is, it interprets people-organization relationships in terms of the whole person, whole group, whole organization, and whole social system. Its purpose is to build better relationships by achieving human objectives, organizational objectives, and social objectives. From the definition above, organizational behavior encompasses a wide range of topics, such as human behavior, change, leadership, teams, etc. Since many of these topics are covered elsewhere in the leadership guide this paper...
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...Bartels, Robert (1976) “The History of Marketing Thought,” 2 ed., pp.1-33, 123-243, Chapters 1,2,3,4,9,10,11,12,13,14. Chapter 1: The Meaning of Marketing The establishment of a market economy wrought marked changes in the social and economic structure. A new attitude toward business revolutionized the economy of the country and that revolutionary element was identified by the term ‘marketing.’ Historical accounts of trade lead one to conclude that marketing has always existed. Was the original use of the term marketing merely an application of a new name to an old practice? One theory is that language is an invention of man, an adornment. The other explanation of the origin of language is that it is inseparable from reason. Accordingly, man’s language has developed as his thoughts have developed. By marketing was first meant “that combination of factors which had to be taken into consideration prior to the undertaking of cer6tain selling or promotional activities.” The essence of marketing was the combination of factors. Blindness to and ignorance of that combination of factors is the reason for the absence of terms equivalent to marketing in other languages. Marketing must be regarded not merely as a business practice, but as a social institution. Marketing is essentially a means of meeting and satisfying certain needs of people. It is a highly developed and refined system of thought and practice characteristic of a period in the development of...
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...the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.[1] According to Paul Reynolds, entrepreneurship scholar and creator of the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers." [2] And in recent years has been documented by scholars such as David Audretsch to be a major driver of economic growth in both the United States and Western Europe. "As well, entrepreneurship may be defined as the pursuit of opportunity without regard to resources currently controlled (Stevenson,1983)" [3] Entrepreneurial activities are substantially different depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities. Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) in...
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...State University and granted permission to use it for this course on health marketing. A key observation to notice throughout this reading assignment is that in the history of business (or commercial) marketing there has been no reference to health, prevention, wellness or medicine as products or services to motivate people to buy or to sell or market to people. An important concept to note however, from the article is that marketers evolved to applying theories of behavior, the same as health educator‟s use. Among these are concepts borrowed from established disciplines, such as psychology and sociology and suggesting that marketing is a social science. Please note that the bold text are from the original text from Dr. Hermans. The article begins now. Bartels, Robert (1976) “The History of Marketing Thought,” 2nd edition, Highlights selected by Dr. Hermans are from chapters 1,2,3,4,9,10,11,12,13,and 14. Accessed on Sep 18, 2009. Available at http://www.faculty.missouristate.edu/c/ChuckHermans/Bartels.htm Chapter 1: The Meaning of Marketing The establishment of a market economy wrought marked changes in the social and economic structure. A new attitude toward business revolutionized the economy of the country and that revolutionary element was identified by the term „marketing.‟ Historical accounts of trade lead one to conclude that marketing has always existed. Was the original use of the term marketing merely an application of a new name to an old practice? One theory is...
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...IN THIS CHAPTER YOU WILL . . . 1 Learn that economics is about the allocation of scarce resources Examine some of the tradeof fs that people face Learn the meaning of oppor tunity cost See how to use marginal reasoning when making decisions TEN OF PRINCIPLES ECONOMICS Discuss how incentives af fect people’s behavior The word economy comes from the Greek word for “one who manages a household.” At first, this origin might seem peculiar. But, in fact, households and economies have much in common. A household faces many decisions. It must decide which members of the household do which tasks and what each member gets in return: Who cooks dinner? Who does the laundry? Who gets the extra dessert at dinner? Who gets to choose what TV show to watch? In short, the household must allocate its scarce resources among its various members, taking into account each member’s abilities, efforts, and desires. Like a household, a society faces many decisions. A society must decide what jobs will be done and who will do them. It needs some people to grow food, other people to make clothing, and still others to design computer software. Once society has allocated people (as well as land, buildings, and machines) to various jobs, 3 Consider why trade among people or nations can be good for everyone Discuss why markets are a good, but not per fect, way to allocate resources Learn what determines some trends in the overall economy 1 TLFeBOOK 2 4 Ten Principles...
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...THE ARMCHAIR ECONOMIST by Steven E. Landsburg Praise: "Witty economists are about as easy to find as anorexic mezzo-sopranos, natty mujahedeen, and cheerful Philadelphians. But Steven E. Landsburg...is one economist who fits the bill. In a wide-ranging, easily digested, unbelievably contrarian survey of everything from why popcorn at movie houses costs so much to why recycling may actually reduce the number of trees on the planet, the University of Rochester professor valiantly turns the discussion of vexing economic questions into an activity that ordinary people might enjoy." —JOE QUEENAN, The Wall Street Journal "The Armchair Economist is a wonderful little book, written by someone for whom English is a first (and beloved) language, and it contains not a single graph or equation...Landsburg presents fascinating concepts in a form easily accessible to noneconomists." —ERIK M. JENSEN, The Cleveland Plain Dealer "...enormous fun from its opening page...Landsburg has done something extraordinary: He has expounded basic economic principles with wit and verve." -DAN SELIGMAN, Fortune "An ingenious and highly original presentation of some central principles of economics for the proverbial Everyman. Its breezy tone conceals the subtlety of the analysis. Guaranteed to puncture some illusions and to make you think." —MILTON FRIEDMAN CONTENTS Introduction I. 1. 2. 3. 4. 5. WHAT LIFE IS ALL ABOUT The Power of Incentives: How Seat Belts Kill - 3 Rational Riddles: Why the Rolling Stones...
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...Brazil Canada Mexico Singapore Spain United Kingdom United States Managerial Economics: A Problem-Solving Approach Luke M. Froeb VP/Editorial Director: Jack W. Calhoun Editor-in-Chief: Alex von Rosenberg Sr. Acquisitions Editor: Mike Worls Sr. Content Project Manager: Cliff Kallemeyn Brian T. McCann Art Director: Michelle Kunkler Sr. First Print Buyer: Sandee Milewski Printer: West Group Eagan, MN Marketing Manager: Jennifer Garamy Marketing Coordinator: Courtney Wolstoncroft Technology Project Manager: Dana Cowden COPYRIGHT ª 2008 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and SouthWestern are trademarks used herein under license. Printed in the United States of America 1 2 3 4 5 09 08 07 06 ISBN-13: 978-0-324-35981-7 ISBN-10: 0-324-35981-0 ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution or information storage and retrieval systems, or in any other manner—without the written permission of the publisher. For permission to use material from this text or product, submit a request online at http://www.thomsonrights.com. Library of Congress Control Number: 2007921344 For more information about our products, contact us at: Thomson Learning Academic Resource Center 1-800-423-0563 Thomson Higher Education 5191 Natorp Boulevard Mason, OH 45040...
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...sk@greatlakes.edu.in Course Objectives and Key Take Aways This course is designed to introduce students to basic microeconomic theory at a relatively rapid pace. The focus will be on fundamental economic principles that can be used by managers to think about business problems, including those inside the firm (relating to the problem of administering the firm’s resources in the most cost-effective way) and those outside the firm (relating to broader market and government forces that can affect the behavior of firms). In particular, it addresses how businesses make choices concerning the use of scarce resources, how prices and incomes are determined in competitive markets, and how market power affects the prices and quantities of goods available to society. We will also examine the impact of government intervention in the economy. At the end of the course the student should be able to: 1. Explain price and output changes in markets using supply and demand. 2. Analyse the usefulness of the concept of elasticity of demand in pricing, market segmentation decisions. 3. Find the profit maximizing level of various firm activities using marginal analysis. 4. Demonstrate how competitive industries respond in the short run and long run to demand and supply shocks. 5. Demonstrate how an unregulated monopolist sets price and output. Discuss the importance of government regulation in markets with monopolypower. 6. Discuss the firm level decision making regarding price...
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...User SONPR:Job EFF01417:6264_ch01:Pg 0:23907#/eps at 100% *23907* Fri, Nov 9, 2001 11:52 AM part I Introduction User SONPR:Job EFF01417:6264_ch01:Pg 1:21266#/eps at 100% *21266* Fri, Nov 9, 2001 11:52 AM C H A P T E R The Science of Macroeconomics The whole of science is nothing more than the refinement of everyday thinking. — Albert Einstein 1 O N E 1-1 What Macroeconomists Study Why have some countries experienced rapid growth in incomes over the past century while others stay mired in poverty? Why do some countries have high rates of inflation while others maintain stable prices? Why do all countries experience recessions and depressions—recurrent periods of falling incomes and rising unemployment—and how can government policy reduce the frequency and severity of these episodes? Macroeconomics, the study of the economy as a whole, attempts to answer these and many related questions. To appreciate the importance of macroeconomics, you need only read the newspaper or listen to the news. Every day you can see headlines such as INCOME GROWTH SLOWS, FED MOVES TO COMBAT INFLATION, or STOCKS FALL AMID RECESSION FEARS. Although these macroeconomic events may seem abstract, they touch all of our lives. Business executives forecasting the demand for their products must guess how fast consumers’ incomes will grow. Senior citizens living on fixed incomes wonder how fast prices will rise. Recent college graduates looking for jobs hope that the economy...
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...Licensed to: iChapters User Licensed to: iChapters User Business Ethics: A Stakeholders and Issues Management Approach, Fifth Edition Joseph W. Weiss VP/Editor-in-Chief: Melissa Acuña Acquisitions Editor: Michele Rhoades Developmental Editor: Daniel Noguera Editorial Assistant: Ruth Belanger Sr. MarComm Manager: Jim Overly Marketing Manager: Clinton Kernen © 2009, 2006 South-Western, a part of Cengage Learning ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher. For product information and technology assistance, contact us at Cengage Learning Academic Resource Center, 1-800-423-0563 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com Text Permissions Manager: Timothy Sisler ExamView® and ExamView Pro® are registered trademarks of FSCreations, Inc. Windows is a registered trademark of the Microsoft Corporation used herein under license. Macintosh and Power Macintosh are registered trademarks of Apple...
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