Microeconomics for MBAs 3
Microeconomics for MBAs 3
... Abowd, “Does Performance -Based Managerial Compensation Affect Corporate Performance?” Industrial and Labor Relations Review, vol. 43 [special issue, February 1990], pp. 52S–3S). 23 See James A. ... Indians hunted animals for their skins, the demand and therefore the price of animal skins increased. This provided an incentive for the Indians to hunt beyond their demand for meat. Under...
Microeconomics for MBAs 46
... (1988), pp. 34 7 -37 6. 26 Michael Ryngaert and Jeffry Netter, “Shareholder Wealth Effects of the Ohio Antitakeover Law,” Journal of Law, Economics, and Organization, vol. 4 (1988), pp. 37 3 -38 3. 27 In ... incentive for managers to manage firms efficiently on behalf of their shareholders. 28 For a more detailed discussion of golden parachutes, see Jensen, “The Market for Corporate C...
Microeconomics for MBAs 47
... Average Cost Megawatts Marginal Cost Total Cost [ (3) ÷ (1)] (1) (2) (3) (4) 1 $50 $ 50 $50 2 40 90 45 3 30 120 40 4 20 140 35 5 10 150 30 Figure 14 .3 shows these same curves along with the electric ... early 19 83, but was re-controlled in 1984 for two more years. Starting January 1, 1985, all gas discovered after April 20, 1977 was deregulated, while gas discovered before this date...
Microeconomics for MBAs 48
... enlisted in pushing for protective legislation. 10 9 Richard A. Posner, “Theories of Economic Regulation,” Bell Journal of Economics and Management Science (Autumn 1974), p. 33 7. 10 See Mancur ... explained as an indirect form of taxation—in the sense that taxation is the government’s means of extracting money to pay for what are viewed as public goods and services. For example, until...
Microeconomics for MBAs 60
... process for prices in general. As U.S. demand for foreign goods rises, the demand curve for francs shifts outward from D 1 to D 2 , shifting the equilibrium from E 1 to E 2 . As foreign demand for ... more foreign imports, both directly and in the form of domestic goods that incorporate foreign parts or materials. Either way, an increase in real incomes leads to an increase in the dem...
Microeconomics for MBAs 49
... abusive customers can make work a form of “hell” for the workers. If forced to take excessive abuse, the workers would, no doubt, demand higher wages to compensate them for this abuse. At some point, ... prefer and be willing to pay more for the second. This situation suggests what looks like a profit opportunity for one of the hotel owners; establish a reputation for catering to th...
Microeconomics for MBAs 50
... a demand for the products and services they offer. The greater the demand for the products and the greater the demand for the labor needed to produce it -- and the greater the demand for a given ... greater for jobs offering non- monetary benefits—S 2 rather than S 1 . Given a constant demand for labor, the wage rate will be W 2 for workers who do not receive nonmonetary benefit...
Microeconomics for MBAs 1
... Thinking 3 the nervous prisoners had smoked up their holdings of cigarettes, prices fell. Radford saw a form of social order emerging in these spontaneous, voluntary, and completely undirected efforts. ... offered in different bungalows. A priest, for example, found that he could exchange a pack of cigarettes for a pound of cheese in one bungalow, trade the cheese for a pack and a hal...
Microeconomics for MBAs 2
... 2 papayas for a coconut; Harry would be better off if he could give up fewer than 4 papayas for a coconut. If, for example, they agree to trade at the exchange rate of 1 coconut for 3 papayas, ... social contract permits them. In terms of Figure 1 .3, they can, through exchanges or trades, increase their utility to U F3 and U H3 . Figure 1 .3 In the “state of nature,” in which Fred...
Microeconomics for MBAs 51
... (3) Marginal Cost of Additional Worker [Change in (3) ] (4) 1 2 3 4 5 6 $20,000 22,000 24,000 26,000 28,000 30 ,000 $ 20,000 44,000 72,000 104,000 140,000 180,000 $20,000 24,000 28,000 32 ,000 36 ,000 ... general and straightforward rule for organizing much production: Give workers a direct detectable stake in firm revenues or profits in order to raise revenues and profits. Pay for p...