Alice

University of La Verne
COLLEGE OF BUSINESS & PUBLIC MANAGEMENT

BUS 525 ECONOMICS OF THE FIRM
Spring 2014

Midterm Review Weights (% of total)

I. Why should managers pay more attention to macro-economics? Use an example of an industry (other than the one your team picked for your first assignment) and a business firm within that industry to support your arguments. 15%

II. One of the principal functions of any business firm is to define consumer wants/ needs. As a business consultant to an investor who wants to start a new restaurant in La Verne explain what information would be needed to make sure that he/ she understands the market (i.e. as per #1 function), and identify and explain relevant economic concepts which you have learnt in our class that would be helpful here. 30%

III. What do managers need to do to assure optimal use of the firm’s limited resources? (use the new restaurant business from above as an example). What are potential applications of the Leontief production functions? 25%

IV. GM has found itself in trouble recently. Using our analytical framework of nine areas of interest introduced in class explain what are the main causes of the company’s problems and how they are planning to recover and succeed in the future. (You need to focus on three most significant areas that are crucial to this case.) 30%
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Please read all questions carefully and make sure that you plan and manage your time. You need to identify and apply relevant theoretical concepts in each case and use appropriate examples. This is your individual work so you’re not allowed to work with your colleagues and provide similar answers. Limit your submission to no more than 3 pages. Please remember that the quality of your work is more important than the number of pages you can write. Allow yourself enough time to review your answers before emailing your work. You have 3 hours for this test. There is no credit for an early finish. Your answers should be emailed to me no later than 3:35pm this afternoon (sorry, there will be no exceptions in order to be fair to everybody).

THANK YOU FOR YOUR WORK, YOUR PARTICIPATION AND YOUR CONTRIBUTION TO THIS COURSE.