Entire Course (Managerial Economics) Essay

Firm Objectives.Why do some worry firms operate a triple-bottom-line offspring objet dart others focus only on profit maximization? Please, use a real connection example to illustrate your pointsDecision Making Under Uncertainty. To give up on gasoline expenses, Edith and Mathew agreed to carpool together for failing to and from work. Edith preferred to travel on I-20 passage as it was usually the fastest, taking 25 minutes in the absence of duty delays. Mathew pointed out that duty jams on the highway can lead to long delays making the trip 45 minutes. He preferred to travel along Shea Boulevard, which was longer (35 minutes), but rarely had traffic jams. Edith agreed that in case of traffic jams, Shea Boulevard was a reasonable alternative. Neither of them knows the state of the highway ahead of time. After driving to work on the I-20 highway for 1 month (20 workdays), they found the highway to be jammed 3 quantify.Assuming that this month is a good representation of al l months ahead, should Edith and Mathew continue to use the highway for traveling to work? How would you conclusion convince for the winter months, if bad weather makes it likely for traffic jams on the highway to increase to 6 days per month? How would your conclusion change if Mathew purchased a new smart-phone app that could show the status of the highway traffic prior to their drive each morning, thus reducing the probability of them getting into a jam down to only 1day per month (where on this day, the app showed no traffic jam, but a jam developed in the meantime as they were driving along the highway).Economics of Risk and Uncertainty Applied Problems.Please, complete the sideline 3 applied problems in a Word or Excel document. Show all your calculations and condone your results. Submit your concession in the drop encase by using the Assignment Submission button. 1. A generous university benefactor has agreed to donate a large amount of propertyfor student scholarships . The money can be provided in one lump-sum of $10mln, or in parts, where $5.5mln can be provided in class 1, and another(prenominal) $5.5mln can be provided in year 2. Assuming the opportunity interest rate is 6%, what is the present value of the second alternative? Which of the dickens alternatives should be chosen and why? How would your decision change if the opportunity interest rate was 12%?Please, show all your calculations. 2. Volkswagen is considering opening an Assembly Plant in Chattanooga, Tennessee, for the mathematical production of its 2012 Passat, tailored for the US market place. The CEO of the follow is considering two potential options for the size of the plant one is a large size with a projected annual production of 150,000 cars, and the other one is a smaller size plant, which is cheaper to build, but can only produce up to 80,000 cars per year. Depending on the expected level of demand for these cars in the US, Volkswagen has to decide which option is mo re profitable. The discount rate is 6% and for simplicity purposes, the CEO is only evaluating a two-year horizon. The initial factory setup cost, the expected demand scenarios, profit, and probabilities are shows in the below table. Calculate the Net Present Value in each of the two options. Which option should the CEO choose and why? Please, show all your calculations.3. An nonesuch investor is considering investing in one of two start-up businesses and is evaluating the expected returns along with the risk of each option in order to choose the better alternative. Business 1 is an innovative protein energy drink, which has ENPV of $100,000 with a standard leaving of $40,000. Business 2 is a unique chicken wings dipping sauce with an ENPV of $60,000 and a standard deviation of $25,000. a) Apply the coefficient-of-variation decision criterion to these alternatives to find out which is preferred by the angel investor, assuming that he/she is risk-averse. b) Apply the maximin criter ion, assuming that the worst outcome in Business 1 is to lose $5,000, whereas the worst outcome in Business 2 is to make only $5,000 in profit. c) If you were the angel investor, what is your certainty equivalent for these two projects? Are you risk-averse, risk-neutral, or risk-lover?Week 2Marginal Rate of Substitution.What is the marginal rate of substitution (MRS) and why does it diminish asthe consumer substitutes one product for another? utilization examples to illustrateDemand Elasticity.Please, read the article Hainer, R. (2010), provided in the required readings section for this week. The tobacco industry is a prime example to consider when lecture closely price elasticity of demand. While nicotine use can be addictive for many users, it is not addictive for the so-called social smokers. What can we allege about the price elasticity of demand for nicotine products (such as cigarettes, pipes, tobacco) in the group of nicotine addicted users, versus the group of social smo kers? Can we say whose demand is likely to be more elastic? Why?Consumer Demand Analysis and approximation Applied Problems.Please, complete the following 3 applied problems in a Word or Excel document. Show all your calculations and explain your results. Submit your assignment in the drop box by using the Assignment Submission button. 1. Roshima is researching universities where she could study for her MBA degree. She is considering 3 major attributes that she considers important in her choice rank, price, and location. The value she places on each attribute, however, differs according to whether she remains full-time employed during her studies or quits her traffic and focuses on her degree. If she continues to work full time and takes all her courses online, then ranking is the most important attribute, twice as important as price and three times as important as location. If she quits her job and attends school full time, then location becomes three times as important as ranking and twice as important as price.She is considering two universities, respectively, the MBA program at Arizona State University (ASU) and the MBA program at University of Phoenix (UOP), both of which are priced at approximately $25,000. She has rated each attribute on a scale of 1 to 100 for each of the two schools. a. Which of the two options should Roshima pursue of she wants to keep her full-time job? (Calculate the total expected utility from each school option and compare. Graph is not required) b. Which of the two options should she pick if she plans to quit her job and dedicate to her studies? c. Which option should she pursue if the probability of being laid off and unable to find a new job is estimated as0.6? Show your calculations and explain your reasoning.2. The demand function for wiz Bagels has been estimated as follows 40.73Px + 84.17Py + 0.55Axwhere Qx represents thousands of bagels Px is the price per bagel Py is the average price per bagel of other brands of bage ls and Ax represents thousands of dollars spent advertising brainpower Bagels. The current values of the self-governing variables are , , and a. Calculate the price elasticity of demand for Einsteins Bagels and explain what it means. b. Derive an expression for the (inverse) demand curve for Einsteinss Bagels. c. If the cost of producing Einsteins Bagels is constant at $0.10 per bagel, should they reduce price and thereafter, sell more bagels (assume profit maximization is the companys goal)? d. Should Einstein Bagels spend more on advertising?3. The consulting firm that you work for has been hired by the US Government to provide an independent analysis of the demand-side effects of a contem shieldd increase in the valuate on gasoline. They provide you with a data set relating to the period 1962-1987, which they say contains valuable historic lessons relating to the impact of volatile pump prices due to the supply restrictions obligate by the Organization of Petroleum Exporting Countries (OPEC), and the Corporate Average Fuel Economy (CAFE) regulations that required car manufacturers to increase the fuel efficiency of the cars they s over-the-hill, while at the same time Real Disposable Income (RDI) per capita was rising, the number of passenger cars (NPC) almost doubled, and inflation was pushing up the Consumer Price Index (CPI).Week 3 germane(predicate) Costs.Two partners own together a small landscaping business in North Carolina, called Summer Lawn Care. They have been ad hocizing in summer grass seeding, installation, and maintenance. Recently, the partners acquired special technology and know-how for winter grass installations and maintenance. They also added a tree cutting service as recent storms in thearea had caused demand for this service to soar. atomic number 53 of the partners insists that the name of the business should change to Lawn and Tree Care, so that it better reflects the range of services and, thus, generates more customer inter est, and thus contracts. The second partner wants to keep the old name and argues, We have already paid for business cards, vehicle paint, signage, and ads in Yellow Pages. Evaluate the arguments of the two partners. Explain and illustrate their points by identifying the relevant and strange cost for this decision.Contribution Analysis.Explain what is meant by contribution analysis. Carefully define the term and provide examples to illustrate it.Production Cost Analysis and Estimation Applied Problems.Please, complete the following 3 applied problems in a Word or Excel document. Show all your calculations and explain your results. Submit your assignment in the drop box by using the Assignment Submission button. 1. Jennifer Trucking come with operates a large rig transportation business in Texas that transports locally freehanded vegetables to San Diego, California. The company owns 5 large rigs and hires local number one woods paid fixed salaries periodic, regardless of the num ber of trips or tons of cargo that each driver transports each month. 2. The Palms Dry Cleaning Shop in Fort Lauderdale, Florida, faces a highly seasonal demand for its services, as the snow-birds retirees flock to Florida in mid-fall to enjoy the diffuse winter weather and then return to their main homes in mid-spring. Given this seasonality, Palms tries to keep the overhead costs as low as possible and therefore, very much uses seasonal contracted labor to man its operations.The following table shows the labor costs in each month of operation over the past 12 months as well as the total number of garments that were dry-cleaned in each month. Palms pays fixed wages per hour to each employee, and we can assume that the costs of other variable inputs (such as chemicals, electricity, etc) have remained constant. 3. Over the past 12 months the Four Winds Novelty Company firm has recorded its internet sales (equals monthly output levels) and its monthly total variable costs (TVC) for a particular novelty item as shown in the following table. Sales have grown over this period withrelatively few shocks due to uncontrollable weather, political and sporting display cases. This online retailer carries no inventories when it receives a pre-paid on-line order from a customer, it but buys the product from a supplier and ships it out to the customer.Week 4Strategic Behavior Oligopolies. An interesting example of strategic behavior comes from a 1997 article about Microsofts investment in Apple (New Straits Times, 1997). The article is included in the mandatory Readings list. Facing tough anti-trust scrutiny from government agencies, Microsoft provided financial bridge over to Apple in order to ensure Apples survival and, therefore, to ensure that hawkishness in the industry remains. Moreover, the partnership with Apple provided an additional market for Microsofts products the MS Office and the IE products were to be bundled with the MAC OS as one of the conditions fo r this financing. Discuss this case in the context of market social organization and strategic behavior. What market structure do these firms operate in? Why did Microsoft need to preserve competitiveness in the industry? What was Microsoft afraid of in the event that Apple did not survive?Local Market Power. Bulls Eye department store specializes in the sales of discounted clothing, shoes, household items, etc. similar to the offerings at a regular Walmart or Target. Bulls Eye is the only department store in Show Low and the nearest other discount retailer is Target, located 49 miles away in Eagar. Bulls Eye, therefore, has some market power in its local area. Despite having some market power, Bulls Eye is currently suffering losses. An analyst at Bulls Eye is recommending to the manager to raise prices, so that profitability can be improved. The manager is unsure of this strategy as recent data points to increasing number of individuals shopping more and more. What are the pros and cons of raising the prices at Bulls Eye and would that strategy be profitable?Market Structures and Pricing Decisions Applied Problems. A small business which produces plastic vacuum-suction covers for round household dishes hasa monopoly that is protected by a utility patent. The market demand curve for this product is estimated to be 25P where Q is the number of plate covers per year and P is in dollars. Cost estimation processes have determined that the firms cost function is represented by + 2500Q -0.25*Q2. 2. Greener Grass Company (GGC) competes with its main rival, Better Lawns and Gardens (BLG), in the supply and installation of in-ground lawn watering frames in the wealthy western suburbs of a major east-coast city.Last year, GGCs price for the typical lawn system was $1,995 compared with BLGs price of $2,100. GGC installed 9,130 systems, or about 55% of total sales and BLG installed the rest. (No doubt many additional systems were installed by do-it-yourself homeowner s since the parts are pronto available at hardware stores.)Week 5Good Will in Price Bidding. Sometimes, a bidder on a work contract whitethorn bid lower than what would maximize his/her profit from the contract and the reason for that is to create goodwill (to increase expected future business from the buyer). How would you value the goodwill that is obtained in this way?New Product Introduction. Bayer Schering Pharma AG, Germany owns the Alka-Seltzer, which was launched in 1931 and was meant for relief of minor aches, pains, inflammation, fever, headache, heartburn, sour stomach, indigestion, and hangovers. The Alka-Seltzer Plus was a spin-off of the original medicine, meant to relieve colds and flu. The company has recently introduced a new and improved Alka-Seltzer Plus, as described in the TV ad The Cold Truth, (please, watch the ad listed in the Required Readings)Price Quotes and Pricing Decisions Applied Problems. Please, complete the following 3 applied problems in a Word or Excel document. Show all your calculations and explain your results. Submit your assignment in the drop box by using the Assignment Submission button. Maxim Motronics A.G. have been marketing a new product in Europe that has achieved notable market success and it now plans to introduce this product into the United Statesmarket.Week 6Game Theory and Strategic Behavior. call up that GE is trying to prevent Maytag from entering the market for high efficiency clothes dryers. Even though high efficiency dryers are more pricy to produce, they are also more profitable as they command sufficiently higher prices from consumers. The following payoffs table shows the annual profits for GE and Maytag for the advertising expenditure and entry decisions that they are facing. Based on this information, can GE successfully prevent Maytag from entering this market by increasing its advertising levels? What is the equilibrium outcome in this game? Sustainable Competitive Advantage. Describe the cir cumstances under which a firm chooses a low-cost strategy to attain sustainable competitive advantage. What about the situations when a differentiation strategy is chosen? Provide specific real world examples. Focus of the Final PaperResearch a specific company of your choice and identify some of the managerial decisions that were made over time and in response to changes in its market or competitive environment. Use the Ashford University Online Library and web-based sources for your research. At least three external scholarly sources must be used. Address all of the following areas Describe the company and provide a brief history of its operations. Find or use graphs to illustrate its financial performance over the years. Identify any sources of risk or uncertainty in its operations. Do the financial reports indicate risky or uncertain activities or changes to the economic environment that ultimately appear to have affected the companys financial outcomes? Be specific. Are there a ny government regulations that have affected this companys operations domestically or abroad? Explain.