Michael R. Baye‚ Managerial Economics and Business Strategy‚ 6e. ©The McGraw-Hill Companies‚ Inc.‚ 2008 Consumer Behavior • Consumer Opportunities The possible goods and services consumer can afford to consume. • Consumer Preferences The goods and services consumers actually consume. • Given the choice between 2 bundles of goods a consumer either Prefers bundle A to bundle B: A f B. Prefers bundle B to bundle A: A p B. Is indifferent between the two: A ∼ B. Michael R. Baye‚ Managerial
Premium Management Strategic management Marketing
Chapter 1 Thinking as an economist Answers to review questions 1 They probably mean that‚ given the competing demands on their limited resources‚ there are other things (a holiday‚ private school fees‚ a new computer) that they choose to spend their income on rather than a plasma screen television. 2 Your friend probably means that your tennis game will improve faster if you take individual lessons instead of group lessons. However‚ individual lessons are also more costly than group lessons‚ so
Premium Costs Economics Microeconomics
1) Beta can be negative because it tries to quantify the relationship between the stock (or whatever else you are applying it to) and the market. Gold is an example of something with a negative beta. Remember‚ this doesn’t represent zero-risk. It shows that‚ all else equal‚ the gold should move opposite the market as a whole in a macro setting. Try to think about it more like a relationship. 2) The beta varies between different companies because at the end of the day each company is different. No
Premium Balance sheet Financial statements Income statement
Assess the significance of three factors which might limit economic development in the developing countries. Economic development can be defined generally as involving an improvement in economic welfare‚ measured using a variety of indices‚ such as the Human Development Index (HDI). A developing country is described as a nation with a lower standard of living‚ underdeveloped industrial base‚ and a low HDI relative to other countries. There are several factors which may have the effect of limiting
Premium Investment Economics Human Development Index
permanent income hypothesis [11]‚ which distinguishes between permanent and transitory components of income‚ households will spend mainly the permanent income and therefore the transitory income will immediately be channeled to savings with marginal propensity of savings from this income approaching unity. (Differences in household savings behavior: Evidence from industrial and Developing countries Gulnur muradoglu Fatma taskin) B. Wealth Different definitions of wealth are used in the literature
Premium Investment Interest Income
Chapter 3:Problem 2 2. Ca=1500-10r ‚c=0.6 ‚T=1800 Ip=2400-50r ‚G=2000 ‚NX=-200 a. The marginal propensity to save equals: 1-C=1-0.6=0.4 b. Autonomous planned spending‚ Ap‚ equals Ca − cTa + Ip + G + NX = 1‚500 − 10r −.6(1‚800) + 2‚400 − 50r + 2‚000 − 200 = 4‚620 − 60r. 4‚620 − 60(3) = 4‚440. c. 4‚440/.4 = 11‚100 d..04(3) = 120 billions. e. 4‚440 – 120 = 4‚320. 4‚320/.4 = 10‚800 f. (10‚800 − 11‚100)/(4‚320− 4‚440) = (-300)/(-120) = 2.5 g. 11‚095 is the number a. G increases and
Premium Supply and demand Inflation Economics
TOPIC 1: INTRODUCTION TO ECONOMICS Chapter 1: What is Economics about? 1.1 • Economic Problem: how a society can satisfy the unlimited wants with the limited resources available. • Opportunity Cost: represents the cost of satisfying one want over an alternative want. Also known as economic cost/real cost. • Wants: are the material desires of individuals or the community. They provide utility/satisfaction/pleasure when consumed. ○ Needs: are wants‚ but are basic necessities
Premium Economics
Microeconomics Introduction : What microeconomics is all about ? Macroeconomics focus on the economy as a whole. In macro‚ you outline relationships between variables ( growth‚ employment rate‚ investment…). Micro : focus on economic agents‚ players‚ and companies. Focus on how consumers and companies are behaving. In micro you look at the economy as being structured‚ divided in several individual markets. It is an important difference in focus : from the overall standpoint to the
Premium Economics
issue that public good facing‚ this define as it is not possible to stop others to use the goods once its provided‚ even other people never pay for it. Hence‚ there is no incentive for people who use to pay for the goods‚ this is because they can consume it even they are not paying for it. The outcomes of these issues will cause no goods provided‚ thus there will be no social efficiency. Base on that there is a need for the government to provide the public goods (Economics Help 2012). Positive
Premium Externality Public good Economics
Question 1 0 out of 1 points Root beer Candy bars Quantity Total Marginal Quantity Total Marginal utility utility utility utility 0 0 0 0 0 0 1 60 60 1 80 80 2 110 50 2 150 70 3 150 40 3 200 50 4 180 30 4 230 30 5 200 20 5 240 10 Reference: Ref 6-8 (Table) In the table‚ the total utility from consuming three root beers and two candy bars is: Selected Answer: 310 utils. Correct Answer: 300 utils. Question
Premium Costs Variable cost Marginal cost