man econ
Cards (37)
- person who directs resources to achieve a common goal
- science of making decisions in presence of scarce resources
- study of how to direct scarce resources to most efficiently achieve a managerial goal
- describes methods useful to direct resources to maximize welfare and profits
- it is the artifact of scarcity
- the first step in making sound decisions
- what is the goal of most firms
- money from sales minus cost of producing goods or services
- total revenue minus total opportunity cost
- includes explicit and implicit cost of giving up best alternative
- signals owners of resources where resources are most highly valued
- heightens competitions and reduces margins of existing firms
- industry profit is low if suppliers negotiate favorable terms
- it is less intense in concentrated industries
- industry profits are low when buyers negotiate favorable terms
- affects how resources are used and how hard the workers work
- consumer locate low prices, producer negotiate high prices
- reduces negotiating power of consumers
- multiple sellers but less customers
- when agents on either side of the market is disadvantaged, who intervenes
- opportunity cost reflects what?
- time value of money
- present value
- net present value
- maximizing value of firms (present value of current and future profits)
- marginal analysis
- change in total benefits arising from change in managerial control variable q
- change in total cost
- to maximize net benefits, increase marginal control to where it benefits equals cost
- qualitative forecasting tool used to predict trends in market
- price rises, demand falls
- market demand curve
- change in demand
- demand shifters
- rightward shift
- leftward shift
- increase/decrease in income = increase/decrease in demand