Managerial Economics

This paper will examine the U.S sugar import quota program using trade model for import quotas. In addition it will analyze the statements made by government and domestic sugar producers in support of quota policy, and provide conclusion with the brief description of the current situation.

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This paper presents a formal derivation of general expressions for Ke and WACC in perpetuities with constant growth, which do not make any assumption on what the proper discount rate is to be applied to the firm’s tax shield, and are complemented with numerical examples of its application. Furthermore, because the most widely known approaches to market valuation of firm and equity make either an implicit or explicit assumption on the value the mentioned rate should take expressions for the value of the equivalent rate on each one of those cases are presented. In addition, a formula for the calculation of the impact on the firm and equity value of a variation on the discount rate for tax shield is proposed, which yields exact results for changes of any size.

kniha Základy manažérskej ekonomiky. 2013. Papula Ján, Papulová Emília, Bratislava: Kartprint, ISBN 978-80-89553-11-2. 243 s.

dostupná na www.kartprint.sk alebo v predajni publikácií Knižnice Fakulty managementu Univerzity Komenského, Odbojárov 10/a, Bratislava. Prístavba, č.dv.: 07  Telefón: 02/50 117 640

In the 19th-century the rise of corporate monopoly power in the US was a significant threat due to rising prices. As a result, the rapid advancement of the anti-trust regulations was applied to control the expanding power of monopolies. Oligopolies and monopolies are considered to be the danger to the companies and are able to ask them to put high prices, getting the most from society as possible. But our greatest concern should be the flip side of monopoly: "monopsony." It appears when a company gains the power to set price to its suppliers, because the suppliers don’t have any other choice but to work with that buyer.
Pure monopsonists are unusual because typically suppliers have alternatives for whom to sell good or service. Still, monopsony power is important in some economic sectors. There is a monopsony power of the large supermarkets, who have the power over smaller suppliers, and the monopsony power of labor markets.
This research paper will define and analyze the monopsony labor and supplier power of world’s largest retailer, Walmart. It will study the industry size, industry profitability, and Walmart’s impact on the market concentration using Herfindahl-Hirschman Index and The Four-Firm Concentration Ratio in the U.S. retail market. Furthermore, it will examine how the monopsonist supply and marginal factor cost curves behave, and how it implements the profit maximizing employment when there is a minimum wage. As a conclusion, it will provide with the general idea of consequences of Walmart monopsony power.

One of the oft-quoted theorems of finance is that decision making based on net present value will lead to the maximisation of shareholder value. The study analyses the reality background of this theorem within the disciplinary borders of business economics. Since finance is based directly on the bases of microeconomics, the study touches upon the presentation of the different disciplinary frames of business economics and microeconomics. The paper demonstrates that the economic content of shareholder value of a firm calculated from its business value and the project’s net present value fundamentally differ from one another. With their summing up, in general cases, no index emerges with meaningful economic content. Moreover, only in exceptional cases does the ranking based on the net present value lead to the maximization of the shareholder value.

Abstract: This study explores the leadership actions-oriented behavior of school principals in Finland. Actions-orientated behavior
enables the leader to appropriately articulate relations and task orientation to meet the immediate contextual demands and
to accommodate followership toward change and development. The leadership actions-orientated behavior of Finnish school
principals were studied in three schools. In-depth interviews with school actors (principals, vice principals, teachers, special
educators, and nonteaching staff) were conducted to triangulate the analyzed data. It was found that leadership actions-oriented
behavior enabled school leaders to articulate appropriate behavioral patterns to generate motivation and commitment. The
results suggest that actions orientations toward high-on relations enabled leaders to achieve leadership success, while actions
orientations toward high-on task enabled leadership effectiveness. Actions-oriented behavior toward high-on task enables
leadership flexibility with greater leadership elasticity. The results suggest that school actors anticipated a relational approach,
whose actions orientations were high-on task. The results also suggest that relations-oriented behavior is rationally applied by
school leaders who have remained in the organization for a longer time to strengthen the systematic approach. It was found
that leaders’ actions orientation with high-on task were more effective, while leadership actions orientation with high-on
relations generated social harmony. The results suggest that leadership actions-oriented behavioral flexibility and mobility can
be maintained by articulating high relations to low relations and high task to low task, not necessarily from task to relations or
relations to task alone. In doing so, a leader’s personality is prevented from distortions and behavior dysfunction.

Keywords: leadership behavior, actions-oriented behavior, relations-oriented behavior, task-oriented behavior, contextual variation,
leader’s case study, behavioral articulation, Finland, Skills, Ability, Competences and Intelligence (SACI)

We prove the existence of an expected utility function for preferences over probabilistic prospects satisfying Strict Monotonicity, Indifference, the Common Ration Property, Substitution and Reducibility of Extreme Prospects. The example in Rubinstein (1988) that is inconsistent with the existence of a von Neumann-Morgenstern for preferences over probabilistic prospects, violates the Common Ratio Property. Subsequently, we prove the existence of expected utility functions with piecewise linear Bernoulli utility functions for preferences that are piece-wise linear. For this case a weaker version of the Indifference Assumption that is used in the earlier existence theorems is sufficient. We also state analogous results for probabilistic lotteries. We do not require any compound prospects or mixture spaces to prove any of our results. In the second last section of this paper, we “argue” that the observations related to Allais paradox, do not constitute a violation of expected utility maximization by individuals, but is a likely manifestation of individuals assigning (experiment or menu-dependent?) subjective probabilities to events which disagree with their objective probabilities.

The objective of this paper is to review the important economic concept of production functions with regard to how they influence business decisions both in the short and long run, and also show how practically they determine how firms compete to make profit. This paper is a short review of an important economic concept so the approach adopted as methodology was that of a qualitative approach based on relying on secondary data. It is hoped that the paper will stimulate further reading and research by researchers and students alike.

Introduction
What follows are lecture notes on demand theory with commodity money. While I have used the contents of chapters 2 and 3 of the textbook entitled “Microeconomic Theory” by Andreu Mas-Colell, Michael D. Whinston and Jerry R. Green, published by Oxford University Press in June 1995, as a template for a substantial portion of these lecture notes, I am not aware of the existence of any other full length and exclusive treatment of demand theory with money as a commodity. At times it was extremely tempting for me to work on the MS Word lecture notes prepared by Paul Glewwe for his course on “Applied Microeconomics of Consumer Choice and Consumer Demand” (Apec 8001) in the Applied Economics department of University of Minnesota, which he had very kindly and generously shared with me. I did not, since preparing these notes gave me an opportunity to revisit the subject- an opportunity I would have missed otherwise. The motive for these lecture notes is the paper by me entitled “Consumer Surplus and Budget Constrained Preference Maximization”, (forthcoming in Managerial Economics). These notes are a rigorous exposition of the framework of the paper with additional results that may be of interest.
An immediate consequence of introducing money as a commodity is that that the homogeneity assumption of the demand function for goods (i.e. non-monetary commodity) has to be sacrificed. We do provide an alternative definition of homogeneity which is appropriate in our framework and whose implications are discussed in the fifth chapter. Our demand functions are meaningful in two contexts: the partial equilibrium model, where money is saved to be spent on commodities other than those that we consider in our model and in the general equilibrium context, where money is saved for consumption during future periods. However, this general equilibrium model is not the Arrow-Debrue- McKenzie model with dated commodities, but the temporary general equilibrium model introduced by Sir John Hicks in his treatise entitled “Value and Capital”. If the temporary general equilibrium model is akin to a model with every day in a man’s life being a different day with its own morning and its own evening, then in the Arrow-Debreu model the entire life of a man being is considered to be a day, with as many different mornings and different evenings, as the number of days he actually lives (assuming all men die at night!). If a man lives for just one day, then obviously no savings are required. However, if “tomorrow is another day” then a person may or may not choose to save for tomorrow.
With money as a commodity, the Marshallian demand “curve” acquires a non-trivial existence of its own and meaningfully represents the concept of a marginal willingness to pay function for surplus maximizing consumers. Its implications for social welfare are enormous- social welfare is “best” if and only if consumers are surplus maximizers. Another implication of a surplus maximizing consumer is that our chapter 1 on consumer demand theory (based largely on Chapter 2 of MWG (June 1995)) acquires a relevance of its own, beyond being an abstract generalization of some results in classical demand theory.
The fourth chapter of these lecture notes deals with classical demand theory. Most treatments of classical demand theory begin with an elaborate discussion about numerical representation of preferences or more generally binary relations. Undoubtedly this is an important topic in Order Theory, which is a branch of applied mathematics and in the study of representation of social preferences by social utility functions- an important topic in welfare economics. In consumer demand theory, I have hardly ever come across any application of consumer preferences which are not representable by utility functions. Even the demand function generated by the “much hyped” lexicographic preferences can be generated by a budget-constrained utility maximizing consumer whose utility from a consumption bundle is measured by the quantity consumed of the commodity that enjoys “top priority”. Hence we adopt the approach towards demand theory that has been adopted by Duncan Foley in his classic text “Economic Reasoning”, and assume that consumers in classical demand theory have preferences representable by utility functions. Our major contribution in this chapter is that budget constrained utility maximimizing consumers with Walrasian demand “curves” satisfying a “Boundedness Condition” are surplus maximizers, because the area under the demand curves measure their willingness to pay for the quantity of the good (whose demand curve we are concerned with) that is consumed. The rest is mostly as in the chapter on classical demand theory in MWG (June 1995).
The fifth chapter of these lecture notes discusses a concept of homogeneity that is appropriate for our framework. Its implication for classical demand theory is quite interesting- the shadow price/ marginal value/marginal indirect utility of income is in fact the marginal utility of savings for a budget constrained utility maximizing consumer.
In the sixth and last chapter of these notes we discuss functional forms in demand theory- a topic that- for reasons unknown to me- are not discussed in most graduate microeconomics or any mathematical economics course, but dealt with in applied econometrics or demand analysis courses. Hence this topic- in spite of being probably the most practically applicable one in demand theory- remains unnoticed by several mathematically inclined graduate students during their course work at graduate school and thereafter. I have introduced this topic in these notes for three reasons: (i) for its potential as a serious research topic for theoretically inclined graduate students in economics who are interested in demand theory; (ii) for its wide applicability; and (ii) to show that introducing savings in consumer demand theory has significant implications for the associated functional forms for possible utility and demand functions. For instance, assuming that savings are a constant fraction of expenditure goes a long way in accommodating the existing results within our framework. Even homogeneity properties often require adjustment for the results we seek.
To understand these notes, it would be a good idea to be familiar with the mathematics in “Fundamental Concepts of Analysis”, by Alton H. Smith and Walter A. Albrecht, Jr. and the economics in “Essentials of Microeconomics” by Bonnie Nguyen and Andrew Wait.
Two people taught me consumer demand theory: Professor Shanti Chakraboty at ISI (Kolkata) in 1979 and Professor Leonid Hurwicz at University of Minnesota in 1981. However, these notes are an attempt as a teacher of microeconomics at MBA and undergraduate level, to provide a rigorous foundation of some things we teach. Although I have been teaching microeconomics to MBA and undergraduate students as a full-time faculty since 1987, it was only after joining PDPU in September 2007, that I got the opportunity to teach the whole and hence the pre-midterm portion of the course, and that is where demand theory is located. Before that it was almost always that I got to teach the post-midterm portion only. There is always a big difference between a hypothetical problem and a problem that one faces in reality. Convincing myself that there is a rigorous and logically consistent basis for what I teach the students- whether I share the details with them or not- is a problem in the latter category for me. Hence, there is some truth in the assertion that these notes owe a lot to the courses I teach at PDPU. After I move on, these notes will remain for enquiring minds- both student and faculty.
This is work in progress and hence a separate Acknowledgment section makes sense, only after it has been class tested by friends and colleagues and I have been informed about the innumerable errors these notes contain. For those generous individuals who will spare a few pennies’ worth of thought for these notes and revert back to me (constructively?), I have the following extract from the parody of Thomas Moore’s poem (“Oft in the stilly night...”) that was penned by Ogden Nash:
Oft in the stilly night,
When the mind is fumbling fuzzily,
I brood about how little I know,
And know that little so muzzily.
Ere slumber's chains have bound me,
I think it would suit me nicely,
If I knew one tenth of the little I know,
But knew that tenth precisely.
~
~
~
Gently my eyelids close;
I'd rather be good than clever;
And I'd rather have my facts all wrong
Then have no facts whatever.
It is for such generous and “critical” readers of these notes that the real “Thank you” is yet waiting to be said.
Somdeb Lahiri.
Ahmedabad.
September 14, 2020.

One of the oft-quoted theorems of finance is that decision-making based on net present value will lead to the maximization of shareholder value. The study analyses the real background of this theorem within the disciplinary borders of business economics. Since finance is based directly on the bases of microeconomics, the study touches upon the presentation of the different disciplinary frames of business economics and microeconomics. The paper demonstrates that the economic content of shareholder value of a firm calculated from its business value and the project’s net present
value fundamentally differ from one another. With their summing up, in general cases, no index emerges with meaningful economic content. Moreover, only in exceptional cases does the ranking based on the net present value lead to the maximization of the shareholder value.
Keywords: business economics, capital budgeting decisions, net present value, shareholder value

In this paper, we analyze some features and components of the management in general, and of the management in the financial area in particular. Special attention is given to how they cope with some risk which could affect their activity. Trying to find from practice what kind of difficulties the management faces in their work, for sure, we get to interesting conclusions and furthermore, to optimum solutions. We already have some data, result of some earlier preoccupa-tions of the specialists (Dănilă and Berea, 2000 pp.39-48) while others can be foreseen as specific elements for the beginning of the 3rd millennium, that started with what the rating agencies seem to admit as the most important economic decline and prolonged recession risk within the post World War II history. We consider an evaluation of the challenges the management confronts with, lately -while subject to pressures and to the need for radical changes that come with an as-tonishing speed and that are enhanced by the ...

The aims of this textbook are to illustrate the central decision problems managers face and to provide the economic analysis they need to guide these decisions. It was written with the conviction that an effective managerial economics textbook must go beyond the “nuts and bolts” of economic analysis; it should also show how practicing managers use these economyic methods. Our experience teaching managerial economics to undergraduates, M.B.A.s, and executives alike shows that a focus on applications is essential.

This essay begins by examining the theoretical economic underpinnings of different market structures, particularly state monopolies in the form of public utilities in general. The essay examines the case of the sale of the Electricity Company of Ghana (ECG) and analyses why it is being privatised. The essay examines evidence globally and holistically with review of the case for privatisation of the Electricity Company of Ghana, making suggestions for and against privatisation. The insight gained from the essay can inform other African countries (such as Zambia) which are contemplating the sale of their public utilities. The main arguments used for maintaining state monopolies is that they create massive jobs for the people and help the poor access public services cheaply, thereby narrowing the income gap. On the other hand, the main arguments against the continued maintenance of state enterprises is that they are inefficiently run, and they account for the bulk of external public debt of poor countries. Besides, they have been held to ransom by a few politicians and their cohorts whereby these state enterprises are used as conduit pipes for siphoning state funds into the pockets of a few people in privileged political positions. Some of these state monopolies harbour political cadres, failed politicians, and ghost workers. The Washington Consensus and the Bretton Woods institutions which are some of the credible creditors to many African countries have over the years called upon many heavily-indebted African countries to reform and align their loss-making institutions, hence the sale of many of the public institutions such as the Electricity Company of Ghana(ECG). To many an unlettered African, the sale of public utilities is seen as an act of abomination, an unpatriotic act, and a politically-motivated move. It is the objective of this essay to debunk these faulty theses or premises and lay bare the facts.

The practical usability of research results is a special advisory function of business economics. Of great importance is in teaching the science-based business knowledge as well. The paper presents the main problems related to practical usability of business economics summarizing more than four decades of research results of the author on this aspect. The examined disciplinary problems are the questions of terminology, some mechanical takeovers from microeconomic topics, some financial decision-making recommendations based on so methodology which does not fit for actual practice, and finally scientifically unresolved issues originating within business economics. Among the latter are: some unclear relations of profitability indicators, product ranking by contribution margin ratios, problematic return requirement sharing for products by cost or price proportions, cost-related cross-sectional analysis and some methodological problems of project evaluation. Clarifying these questions is...

Managerial economics is a management science that gives you more idea about the economic aspects of a market and how they affect your decision making. This is very important because economic profits play a crucial role in a market based economy., While above normal profits are indicators of expansion and growth, below normal profits cautions you about tightening or retrenchment. Business economics is comprised of several tools of micro and macroeconomic analysis which are useful in management decision-making that act as facilitators to solve business problems. Micro economic instruments used in this context include demand analysis, production and cost analysis, break-even analysis, theory of pricing, technical progress, location decisions and capital budgeting.

Pieţe, competiţie, analize ale celor mai importanţi competitori- Microeconomie Managerială

Scop: analiza informaţiilor furnizate de bursă cu privire la evoluţia unei companii pe piaţa de capital

Analizarea informaţiilor furnizate de bursă cu privire la evoluţia companiei HONDA MOTOR pe piaţa de capital.

SPFAIB merupakan  standar yang memuat ukuran minimal tentang Fungsi Audit Intern yang perlu diselenggarakan oleh bank umum serta aspek-aspek yang berkaitan dengan pelaksanaan Audit Intern tersebut. Standar ini tidak dimaksudkan untuk menguraikan secara teknis dan rinci tentang teknik dan tatacara pelaksanaan fungsi Audit Intern serta tidak pula dimaksudkan untuk mengatur bentuk organisasi SKAI. Dengan adanya SPFAIB diharapkan dapat tercipta kesamaan landasan semua bank umum di Indonesia mengenai tingkat pemeliharaan kepentingan dari semua pihak terkait dengan bank. Dalam pelaksanaannya masing-masing bank perlu menjabarkan lebih lanjut penyusunan Internal Audit Charter dan panduan Audit Intern yang disesuaikan dengan kondisi masing-masing bank yang bersangkutan.