...Economic Objectives of Firms Usually, in economics we assume firms are concerned with maximising profit. Higher profit means: • Higher dividends for shareholders. • More profit can be used to finance research and development. • Higher profit makes the firm less vulnerable to takeover. • Higher profit enables higher salaries for workers However, in the real world, firms may pursue other objectives apart from profit maximisation. 1. Profit Satisficing • In many firms there is separation of ownership and control. Those who own the company (shareholders) often do not get involved in the day to day running of the company. • This is a problem because although the owners may want to maximise profits, the managers have much less incentive to maximise profits because they do not get the same rewards, (share dividends) • Therefore managers may create a minimum level of profit to keep the shareholders happy, but then maximise other objectives, such as enjoying work, getting on with other workers. (e.g. not sacking them) This is the problem of separation between owners and managers. • This ‘principal agent’ problem can be overcome, to some extent, by giving mangers share options and performance related pay although in some industries it is difficult to measure performance. 2. Sales Maximisation Firms often seek to increase their market share – even if it means less profit. This could occur for various reasons: • a) Increased market share increases monopoly power and may enable...
Words: 1225 - Pages: 5
...| | |Econ 545 Project 1 | |Situation A | | | |Drucinda Sexton | |9/10/2015 | Introduction Since I have just finished a course in Business Economics my niece Jenny has asked me advice on if she should become a doctor she felt I was the best person to ask advice about whether or not to pursue her career choice in becoming a doctor. She also wanted to get my opinion if she did become a doctor what demographic location in my experience should she look into. I wanted to provide her with the best possible information possible. This is the research I have found on this matter. This...
Words: 1714 - Pages: 7
...Alejandro Bahena ECON 545 – 10388 Business Economics Microeconomics Analysis September 21, 2014 Introduction The demand for physicians and health care services in the United States is determine by the quantity the public is willing to pay for the lowest price in order to benefit from their services. Several factors affect the demand for physicians. The needs and size of the population, economic hardships and the high prices they are faced to pay. The technological constrains related to the practicality of the demands from consumers. The last demand of health care physicians depends on the relation between the demand and supply current conditions in the market of service. Past projections show that the continuous shortage of supply and demand for physicians will continue to influence the policies and programs related to the health care systems. Because completing medical school and creating a new structure for physicians is time consuming, the USA needs to predict the needs of the physicians in advance. The shortage of physicians was the leading cause for the creation of new medical school in the country. . The important factors which will estimate the future demand of the physicians depends on 800,000 present physicians, millions of nurses and other health care workers, about 300 million patients, hundreds of health plans, thousands of health care facilities, thousands of employers in the industry, thousands of legislators and policy makers, and other factors such economic...
Words: 1872 - Pages: 8
...Project Paper 1 Business Economics – GM545 Fall Session Exercise #1 – Ethical Issues Ethics is a major topic of concern with regards to financial reporting, decision making and company operations in today’s world of business. There are numerous laws and organizations that have been developed in order to establish punishments for unlawful behavior or the intent to commit fraud. People’s ethical standards are tested daily. The question remains, how does ethics have an impact on the subject or theories of economics? A realistic example would be best in utilizing ethics in conjunction with economic theories to exemplify the affect on supply and demand. A commodity that is continuously worrisome to the public is the price of gasoline. First, let’s describe what the determinants of supply and demand are in order to conclude a price that can satisfy the organizations that supply the product and the demand of consumers that are willing and able to afford the product. The determinants of demand in this case consist of income, number of buyers and expectations of future prices and availability (Stone, 2007). Tastes and preferences along with prices of related goods are not significant to this analysis because each company establishes similar gas prices and there are currently no substitute products (Stone, 2007). The determinants of supply consist of production technology (construction of oil rigs), cost of resources (extracting the oil and producing gasoline), expectations...
Words: 993 - Pages: 4
...Week 1 Question 1 Welcome to our Week 1 Discussions! To get us started, let's consider the following questions. 1) Would a traditional income statement differ depending on whether the business is a service organization, merchandiser, or manufacturer? 2) Could we use managerial accounting tools to assess the profitability of an organization other than a manufacturing business, or are the topics that we are learning only related to manufacturing? 3) If we could use these concepts in service and/or merchandising businesses, how would we go about doing so? Let's start with the first question. According to Casteele (2013), income statements are important to most business. It allows owners, managers, and shareholders to see how money is flowing into the company. This article also stated that service and manufacturing companies have several differences between their statements since the businesses have different types of expenses and different income sources. The article further explains, businesses adapt their income statements to their needs based upon the industry the business is in. A business in the service industry could not use the same income statement template as manufacturing industry businesses, because of the significant differences in how the businesses operate and earn money. Casteele, J. (2013). The Difference Between Service and Manufacturing Income Statements. Retrieved from http://smallbusiness.chron.com/difference-between-service-manufacturing-income-statements-34551...
Words: 5441 - Pages: 22
...Chapter 01 Limits, Alternatives, and Choice Multiple Choice [QUESTION] 1. Economics is a social science that studies how individuals, institutions, and society may: A) Expand the amount of productive resources available to them B) Attain a minimum level of unemployment C) Best use scarce resources to achieve the maximum satisfaction of economic wants D) Reduce the prices of goods and services to consumers Answer: C Topic: The Economic Perspective Difficulty: 2 Medium Learning Objective: 01-01 Bloom’s: Level 1 Remember AACSB: Analytic [QUESTION] 2. The key economic concept that serves as the basis for the study of economics is: A) Inflation B) Unemployment C) Money D) Scarcity Answer: D Topic: The Economic Perspective Difficulty: 2 Medium Learning Objective: 01-01 Bloom’s: Level 1 Remember AACSB: Analytic [QUESTION] 3. A recurring theme in economics is that people: A) Have unlimited resources, but limited economic wants B) Can increase resources by limiting their economic wants C) Have limited economic wants and limited resources D) Have unlimited economic wants, but limited resources Answer: D Topic: The Economic Perspective Difficulty: 1 Easy Learning Objective: 01-01 Bloom’s: Level 1 Remember AACSB: Analytic [QUESTION] 4. As a consequence of the problem of scarcity: A) There is never enough of anything B) Individuals have to make choices from among alternatives C) Production has to be planned by government D) Things which...
Words: 727 - Pages: 3
...Econ 1 Assignment 4 1-) (Categories of Price Elasticity of Demand) For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elasticity range identified. a) ED = 2.5:elastic b) ED = 0.8:inelastic 2-) (Price Elasticity of Supply) Calculate the price elasticity of supply for each of the following combinations of price and quantity supplied. In each case, determine whether supply is elastic, inelastic, perfectly elastic, perfectly inelastic, or unit elastic in each case. Please give details to your numeric answers. a) Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 400 units. 200/600= 1/3=33.3/22.2=.667 b) Price falls from $2.25 to $1.75; quantity supplied falls from 600 units to 500 units. 100/600=.1667 / 2.25/1.75=.757 3-) Consider the following pairs of goods. Which would you expect to have the more elastic demand? Why? a) water or diamonds=water b) insulin or nasal decongestant spray=insulin c) food in general or breakfast cereal=food d) gasoline over the course of a week or gasoline over the course of a year = week 4-) Outsourcing Inpatient Care to India The Wall Street Journal, Monday April 26, 2004. Global health care has arrived. During 2003, Canadian resident Terry Salo flew to India to have his...
Words: 347 - Pages: 2
...Project 1 | ECON 545 – Microeconomic Analysis | Submitted by: Adriana Sabou Email: ady_mierea@yahoo.comCourse: ECON 545Professor: Alex Gialanella | 9/20/2014 9/20/2014 Contents: Page Introduction ……………………………………………………………………………………………. | 2 | Overview ……………………………………………………………………………………………….. | 2 | Relevant Information ……………………………………………………………………………….. | 3 | Determinants of Demand, Supply …………………………………………………………………….. | 4 | Relevant Data ………………………………………………………………………………………….. | 7 | Recommendations……………………………………………………………………………………. | 9 | Economic Justification ……………………………………………………………………………….. | 9 | References …………………………………………………………………………………………….. | 11 | Introduction Overview Cousin Edgar needs to understand/decide if he should invest in buying two gas stations. He must consider the high costs of pursuing this idea on business and to try to recover his costs quickly. If the cost of gasoline is taken as a measuring rod then he needs to understand if he can earn enough to recover the costs of investing. Starting a gas station business can be one of the best decisions Cousin Edgar can make as an entrepreneur. He can either set up new gas stations or buy gas stations for sale. If he decides to buy one then he must have some knowledge about how to buy a gas station and if he is planning to set up new gas stations on his own then he is going to need to do some serious research as to how he can go from start to launch. He needs to consider doing lots of...
Words: 2712 - Pages: 11
...Chapter 1 1. Ideas for beyond the final exam a. How much does it really cost? i. Opportunity Costs 1. Value of the next best alternative that must be given up because of that decision. 2. Economists say that the true cost of such decisions are not the number of dollars spend on the computer, new equipment, or military, but rather the VALUE OF WHAT MUST BE GIVEN UP TO ACQUIRE THEM. 3. EXAMPLE- cost of college is more expensive add the money you could be making with a job at home, don’t add housing since you pay that either way (tuition + possible income if you weren’t working) b. Attempts to Repeal the Laws of Supply and Demand- The Market Strikes Back ii. Short Supply-Prices Rise iii. Large Quantity-Prices Fall 4. Ceiling on Price or Price Floors a. Such attempts to repeal the laws of supply and demand usually backfire and cause more problems c. Comparative Advantage iv. Even if one of them is more efficient at everything, both countries can gain by producing the things they do best COMPARATIVELY v. Even if you are better at something than someone else, the time you could be spending on what you specialize in is losing money. Do what you do best and hire someone to do the rest. d. Trade is a Win-Win Situation vi. Fundamental Idea- Both parties must expect to gain something! vii. Some things like ticket scalping...
Words: 992 - Pages: 4
...The Inferno Outside What time is it? I was groggy as I opened my eyes and struggled to get my senses working again. I noticed that my laptop was still open and then I remembered. I was trying to get my homework done. It was 1:00 a.m. I really should try to get more of this finished. Then I remembered that this was not the first time I had nodded off tonight. Tomorrow, ah today, would be less hectic if I didn’t have as much to accomplish. Hmm, I was pretty tired though and studying Econ while struggling to stay awake probably wasn’t the best idea. I decided it was time for much needed sleep. Everyone else in my house had been asleep for hours so I really needed to be as quiet as possible. I slowly crawled off the couch and walked as quietly as possible to the bathroom to brush my teeth. What was that noise? What could be going on outside this time of the morning? That sounded like someone shooting a gun. I knew that as tough as I like to think that I am, I needed to wake my husband to go find out what was happening. The shades were drawn, but I had to walk by the windows to get to the bedroom. I crouched and all but crawled past them. I roused my husband twice to get him up. After telling him what I had heard, he went to the carport door to determine the reason for the noise. He opened the door and quickly shut it, telling me there was an active fire outside. He would know active since he was a retired volunteer firefighter. He opened the door a second time...
Words: 1583 - Pages: 7
...Deandra Romanoff ECON 545 May 25th, 2014 It is indeed very lucrative for potential owners to purchase gas stations in our current economic condition where gas prices are at sky high, especially in places where public transportation is scarce. On average, the whole United States have faced an increased in gas prices nearly 5 cents from March 21st, 2014 to April 4th, 2014 (Reuters, 2014). According to Reuters, Lundberg survey has shown that this increase in gas prices was caused by an increase in demand. In fact, the United States has been experiencing gas prices increasing since early February this year after gas prices saw a price fall in late 2013 (Reuters, 2014). Despite of the fact that gas prices and demand for gas is high, it makes sense for cousin Edgar to spend his money on purchasing gas stations because the facts suggest that he could gain a lot of profits by operating gas stations. However, there are other various factors that cousin Edgar must take into consideration before spending his money, such as the gas demand and supply, the price elasticity of both, the cost of gas production, as well as the future challenges that awaits him in the future. One thing that Edgar must know about what can affects demand is the availability of substitute product, which in this case the substitute product for gas would be the use of public transportation. In places where there is a good public transportation system like in San Francisco, the demand for gas could be more elastic...
Words: 3096 - Pages: 13
...Econ 301B Winter 2012 Problem Set 1 Due date: Monday, January 23 in class 1. Suppose the country of Utopia has a population of 1,000 and produces only three goods: T-shirts, cars and pineapples. Assume that Utopia does not trade with other countries. The production amounts and prices (in US Dollars) for 2009, 2010 and 2011 are given in the table below: Year 2009 2010 2011 Quantity of Tshirts 10,000 9,500 10,500 Price of Tshirts Quantity of cars Price of cars Quantity of pineapples Price of pineapples $10 $10.50 $11 75 85 90 $15,000 $16,000 $15,500 50,000 60,000 45,000 $4 $4.50 $5 a) Using 2009 as base year, calculate nominal and real GDP per capita for 2009, 2010 and 2011. b) Keeping 2009 as base year for prices, compute Utopia’s inflation rates for 2010 and 2011 using both the CPI and the GDP deflator. When calculating the CPI, assume that the representative consumer purchases in any given year 10 T -shirts, 1 car and 100 pineapples. c) Explain why the computed inflation rates are not the same when u sing the two different methods. 2. For this question assume that we are within the short -run goods market framework developed in Chapter 3 in Blanchard. Suppose that the economy is characterized by the following behavioral equations: Note that in this economy investment, I, depends positively on output, Y. This mirrors the fact that firms in the real world will increase their investment expenditure...
Words: 392 - Pages: 2
...INSS 370 Final Exam Study Guide Below is a study guide for your final exam. There will be a combination of true/false and multiple choice questions. 1. Who is responsible for prioritizing the product backlog? 2. What does a burn‐down chart show? 3. What are the principles outlined in the Agile Software Development Manifesto? 4. If our highest priority is to satisfy the customer through early and continuous delivery of valuable software, in general, how can we do that? 5. In agile software processes are the highest priorities to satisfy the customer through early and continuous delivery of valuable software? 6. What traits need to exist among the members of an agile software team? 7. In agile development is it more important to build software that meets the customers' needs today than worry about features that might be needed in the future? 8. The ____ phase of the SDLC includes four main activities: requirements modeling, data and process modeling, object modeling, and consideration of development strategies. 9. One of the main activities in the systems analysis phase is ____ modeling, which involves fact‐finding to describe the current system and identification requirements for the new system. 10. How is planning performed on projects that use Agile approaches? 11. Who should be the main judge of the business value (think of the various roles within an agile team)? 12. How should work be allocated and who should allocate the work to the team in an Agile ...
Words: 443 - Pages: 2
...Identifying Good or Bad Statements Anit Maharjan HUMN210-H5WW Meghan Roehll Franklin University 4th April, 2013 a. Nobody in the world today is really good. Yes, I have heard of good people, but not really good people. - Good statement. b. The world is not flat. Well, if you look at a map it is: - in what point of view - bad statement. c. I will need an extended period of laborious cogitation to assimilate the missive. This doesn't make any sense - bad statement. d. The number 2 is odd. Are we talking about an even number? I believe your confusion comes from the fact that 2 is a prime number, but it is still even. It is the only even number that is prime – false statement. e. If you believe in evolution, then your ancestors were filthy apes. There are two kinds of people in the world: - one is god prayer and the next is science believer. If you support the statement from the point of scientific theory of evolution by Darwin, then yes our ancestors are filthy apes, whereas if you think form the side of god’s prayer then the statement is false – good statement. f. Some swans are black. In this statement, I am not sure that some swans are black or not, all swans could be black or white – good statement. g. If you are a human, then you are a person. If you are an individual, then you are alive. Human is a person and of course the person becomes an individual and every individual breaths...
Words: 384 - Pages: 2
...អាណាចក្រភ្នំ អាណាចក្រភ្នំ គស 50-630 ទីតាំង * ៣០០លី លិចលីនីយ(ជនជាតិចាម) * ៧០០០លី Jenan(តុងកឹង) * ឈូងសមុទ្រធំមួយ * ទន្លេរធំមួយ លិចនឹងពាយព្យគឺសមុទ្រ * ១លី=៥៧៦ម=១៧២៨គម=> 1. កម្ពុជា 2. កម្ពុជាក្រោម 3. ថៃ(ភាគកណ្តាល) រាជវង្សមាន៖ 1. លីវយី(៥០-៦៨) 2. ហ៊ុនទៀន(៦៨) 3. ហ៊ុនប៉ានហួង៖ដែលជាមេទ័ពបានប្រើល្បិចវាយក្រុងទាំង៧នឹងបានដណ្តើមអំណាចពីព្រះ បាទហ៊ុនទៀន 4. ហ៊ុនប៉ានប៉ាង៖ជាកូនហ៊ុនប៉ានហួង 5. ហ្វាន់ជេម៉ាន់៖ជាអ្នកសំលាប់សោយរាជ្យបន្តរឺក៍ហ៊ុនប៉ានប៉ាងផ្ទេរអំណាចអោយ 6. គិនចេង(២២៥)៖ត្រូវជាកូនរបស់របស់ហ្វាន់ជេម៉ាន់ពីព្រោះគាត់បានស្លាប់ពេលវាយ នៅ គិនស៊ីន 7. ហ្វានឆាន(២២៥-២៤៥)៖បានសំលាប់គិនចេងដើម្បីសោយរាជ្យបន្តដែលត្រូវជាក្មួយហ្វាន់ជេម៉ាន់នឹងត្រូវជាបងប្អូនគិនចេង 8. ហ្វានឆាង(២៤៥-២៥០)៖ជាកូនពៅរបស់ហ្វានជេម៉ាន់បានមកសងសឹកនឹងសោយរាជ្យបន្ត 9. ហ្វានស៊ីយ៉ុន(២៥០-២៨៩)៖បានសំលាប់ហ្វានឆាងសោយរាជ្យបន្ត 10. ធៀនឈូឆានតាន(៣៥៧) 11. កៅណ្ឌិន្យ(៣៥៧)៖គាត់មានកូនពីរគឺស្រីឥន្រ្ទវរ្ម័ននឹងស្រេស្ធវរ្ម័ន 12. កៅណ្ឌិន្យជ័យវរ្ម័ន(៤៤២-៥១៤)៖មានបុត្រាពីរគឺគុណវរ្ម័នជាប្អូននឹងរុទ្រវរ្ម័នជាបងក៍ប៉ុន្តែគុណវរ្ម័នជាអ្នកសោយរាជ្យដែលត្រូវជាកូនកុលប្រភាវតីជាមហេសីរីឯរុទ្រវរ្ម័នជាកូនស្នំ។ដោយមិនសុខចិត្តព្រោះខ្លួនជាបងមិនបានសោយរាជ្យក៍ប្រើល្បិចសំលាប់ប្អូនដើម្បី សោយរាជ្យម្តង។ 13. គុណវរ្ម័ន 14. ចេនឡា ចេនឡា រុទ្រវរ្ម័ន(៥១៤-៥៥៦) គស ៥៥០-៨០២ 15. ឥសីកម្ពុស្វយម្ហូវ៖ 16. ស្រុតវរ្ម័ន៖ 17. ស្រស្ធវរ្ម័ន៖ 18. វីរវរ្ម័ន៖ 19. ភវរ្ម័ន(៩០០-៩២២)៖ * ទីតាំងរបស់ចេនឡានៅត្រង់តំបន់បាសាក់តាមដងទន្លេរមេគង្គដែលច្ចុប្បន្ននៅភាគ អាគ្នេយ៍ប្រទេសឡាវ...
Words: 350 - Pages: 2
