Managerial Economics:
A Problem-Solving Approach
4th Edition
End-of-Chapter Individual Problems - Key
,Table of Contents
Chapter 1..........................................................................................................................................7
1-1 Goal Alignment at a Small Manufacturing Concern..............................................................7
1-2 Goal Alignment at a Small Manufacturing Concern (cont.)..................................................7
1-3 Goal Alignment at a Small Manufacturing Concern (cont.)..................................................8
1-4 Goal Alignment at New York City schools.............................................................................8
1-5 Goal Alignment between Airlines and Flight Crews..............................................................8
1-6 Goal Alignment between Hospitals and the British Government.........................................8
Chapter 2..........................................................................................................................................9
2-1 Airline Delays.........................................................................................................................9
2-2 Selling Used Cars....................................................................................................................9
2-3 Flood Insurance.....................................................................................................................9
2-4 France’s Labor Unions Force Early Closing Times..................................................................9
2-5 Kraft and Cadbury................................................................................................................10
2-6 Price of Breast Reconstruction Versus Breast Augmentation.............................................10
Chapter 3........................................................................................................................................11
3-1 Concert Opportunity Cost....................................................................................................11
3-2 Concert Opportunity Cost 2.................................................................................................11
3-3 Housing Bubble....................................................................................................................11
3-4 Opportunity Cost.................................................................................................................11
3-5 Starbucks..............................................................................................................................12
3-6 Dropping University Courses...............................................................................................12
Chapter 4........................................................................................................................................13
4-1 Extent Versus Discrete Problems.........................................................................................13
4-2 Game Day Shuttle Service....................................................................................................13
4-3 Paid for Grades....................................................................................................................13
4-4 Supplier Bids........................................................................................................................14
4-5 Processing Insurance Claims................................................................................................14
4-6 Copier Company..................................................................................................................14
Chapter 5........................................................................................................................................15
5-1 George’s T-Shirt Shop..........................................................................................................15
5-2 Net Present Value................................................................................................................15
, 5-3 Doctor’s Human Capital.......................................................................................................15
5-4 Solar Panel Installation........................................................................................................15
5-5 Toy Trucks............................................................................................................................16
5-6 Running a Hotel During a Recession....................................................................................16
Chapter 6........................................................................................................................................17
6-1 Elasticity of T-Shirt Sales......................................................................................................17
6-2 Demand Curves with Same Values......................................................................................17
6-3 Increasing Movie Ticket Prices............................................................................................17
6-4 Nike Demand (inelastic).......................................................................................................17
6-5 Promotional Pricing.............................................................................................................18
6-6 Bar Nuts...............................................................................................................................18
Chapter 7........................................................................................................................................19
7-1 Scale and Scope...................................................................................................................19
7-2 Brand Extensions.................................................................................................................19
7-3 Rangers’ T-Shirts..................................................................................................................19
7-4 Average and Marginal Costs................................................................................................19
7-5 Learning Curves...................................................................................................................20
7-6 Multiconcept Restaurants Are a Growing Trend.................................................................20
Chapter 8........................................................................................................................................21
8-1 Widget Market.....................................................................................................................21
8-2 Cotton Prices........................................................................................................................21
8-3 Hand Sanitizer......................................................................................................................21
8-4 Chocolate Candy Bars Market.............................................................................................22
8-5 Demand Shifts......................................................................................................................22
8-6 Valentine’s Day....................................................................................................................23
Chapter 9........................................................................................................................................24
9-1 Faculty Housing Benefits.....................................................................................................24
9-2 Snacks, Beer, and Marijuana...............................................................................................24
9-3 Entry and Elasticity..............................................................................................................24
9-4 Competitive Industries.........................................................................................................25
9-5 Economic Profit....................................................................................................................25
9-6 Economics Versus Business.................................................................................................25
Chapter 10......................................................................................................................................26
, 10-1 High Rivalry........................................................................................................................26
10-2 Increasing Customer Value................................................................................................26
10-3 Intangible Resources.........................................................................................................26
10-4 Five Forces and the Airline Industry..................................................................................26
10-5 Smartphone Market..........................................................................................................27
10-6 Salons and Teeth Whitening..............................................................................................27
Chapter 11......................................................................................................................................28
11-1 Explain the Peso Devaluation............................................................................................28
11-2 Flight to Safety...................................................................................................................28
11-3 The Russian Ruble..............................................................................................................28
11-4 The Carry Trade.................................................................................................................29
11-5 Dollar Devaluation.............................................................................................................29
11-6 Effect of Expectations on the Exchange Rate....................................................................29
Chapter 12......................................................................................................................................30
12-1 Parking Lot Optimization...................................................................................................30
12-2 Parking at Cowboys Stadium.............................................................................................30
12-3 App Pricing for Droids........................................................................................................30
12-4 Macintosh Versus iPhone..................................................................................................31
12-5 Concert Prices....................................................................................................................31
12-6 Radio Stations and Rock Concerts.....................................................................................31
Chapter (13)-14..............................................................................................................................32
14-1 Barbie Dolls and Accessories.............................................................................................32
14-2 German Brothels................................................................................................................32
14-3 Selling Salsa........................................................................................................................32
14-4 Microwave Ovens..............................................................................................................32
14-5 Music Pricing......................................................................................................................33
14-6 Bundling.............................................................................................................................33
Chapter 15......................................................................................................................................35
15-1 To Vote or Not to Vote......................................................................................................35
15-2 To Vote or Not to Vote Part II............................................................................................35
15-3 Compatibility......................................................................................................................35
15-4 Salary Negotiation.............................................................................................................35
15-5 Renegotiating Employment Contracts...............................................................................36
A Problem-Solving Approach
4th Edition
End-of-Chapter Individual Problems - Key
,Table of Contents
Chapter 1..........................................................................................................................................7
1-1 Goal Alignment at a Small Manufacturing Concern..............................................................7
1-2 Goal Alignment at a Small Manufacturing Concern (cont.)..................................................7
1-3 Goal Alignment at a Small Manufacturing Concern (cont.)..................................................8
1-4 Goal Alignment at New York City schools.............................................................................8
1-5 Goal Alignment between Airlines and Flight Crews..............................................................8
1-6 Goal Alignment between Hospitals and the British Government.........................................8
Chapter 2..........................................................................................................................................9
2-1 Airline Delays.........................................................................................................................9
2-2 Selling Used Cars....................................................................................................................9
2-3 Flood Insurance.....................................................................................................................9
2-4 France’s Labor Unions Force Early Closing Times..................................................................9
2-5 Kraft and Cadbury................................................................................................................10
2-6 Price of Breast Reconstruction Versus Breast Augmentation.............................................10
Chapter 3........................................................................................................................................11
3-1 Concert Opportunity Cost....................................................................................................11
3-2 Concert Opportunity Cost 2.................................................................................................11
3-3 Housing Bubble....................................................................................................................11
3-4 Opportunity Cost.................................................................................................................11
3-5 Starbucks..............................................................................................................................12
3-6 Dropping University Courses...............................................................................................12
Chapter 4........................................................................................................................................13
4-1 Extent Versus Discrete Problems.........................................................................................13
4-2 Game Day Shuttle Service....................................................................................................13
4-3 Paid for Grades....................................................................................................................13
4-4 Supplier Bids........................................................................................................................14
4-5 Processing Insurance Claims................................................................................................14
4-6 Copier Company..................................................................................................................14
Chapter 5........................................................................................................................................15
5-1 George’s T-Shirt Shop..........................................................................................................15
5-2 Net Present Value................................................................................................................15
, 5-3 Doctor’s Human Capital.......................................................................................................15
5-4 Solar Panel Installation........................................................................................................15
5-5 Toy Trucks............................................................................................................................16
5-6 Running a Hotel During a Recession....................................................................................16
Chapter 6........................................................................................................................................17
6-1 Elasticity of T-Shirt Sales......................................................................................................17
6-2 Demand Curves with Same Values......................................................................................17
6-3 Increasing Movie Ticket Prices............................................................................................17
6-4 Nike Demand (inelastic).......................................................................................................17
6-5 Promotional Pricing.............................................................................................................18
6-6 Bar Nuts...............................................................................................................................18
Chapter 7........................................................................................................................................19
7-1 Scale and Scope...................................................................................................................19
7-2 Brand Extensions.................................................................................................................19
7-3 Rangers’ T-Shirts..................................................................................................................19
7-4 Average and Marginal Costs................................................................................................19
7-5 Learning Curves...................................................................................................................20
7-6 Multiconcept Restaurants Are a Growing Trend.................................................................20
Chapter 8........................................................................................................................................21
8-1 Widget Market.....................................................................................................................21
8-2 Cotton Prices........................................................................................................................21
8-3 Hand Sanitizer......................................................................................................................21
8-4 Chocolate Candy Bars Market.............................................................................................22
8-5 Demand Shifts......................................................................................................................22
8-6 Valentine’s Day....................................................................................................................23
Chapter 9........................................................................................................................................24
9-1 Faculty Housing Benefits.....................................................................................................24
9-2 Snacks, Beer, and Marijuana...............................................................................................24
9-3 Entry and Elasticity..............................................................................................................24
9-4 Competitive Industries.........................................................................................................25
9-5 Economic Profit....................................................................................................................25
9-6 Economics Versus Business.................................................................................................25
Chapter 10......................................................................................................................................26
, 10-1 High Rivalry........................................................................................................................26
10-2 Increasing Customer Value................................................................................................26
10-3 Intangible Resources.........................................................................................................26
10-4 Five Forces and the Airline Industry..................................................................................26
10-5 Smartphone Market..........................................................................................................27
10-6 Salons and Teeth Whitening..............................................................................................27
Chapter 11......................................................................................................................................28
11-1 Explain the Peso Devaluation............................................................................................28
11-2 Flight to Safety...................................................................................................................28
11-3 The Russian Ruble..............................................................................................................28
11-4 The Carry Trade.................................................................................................................29
11-5 Dollar Devaluation.............................................................................................................29
11-6 Effect of Expectations on the Exchange Rate....................................................................29
Chapter 12......................................................................................................................................30
12-1 Parking Lot Optimization...................................................................................................30
12-2 Parking at Cowboys Stadium.............................................................................................30
12-3 App Pricing for Droids........................................................................................................30
12-4 Macintosh Versus iPhone..................................................................................................31
12-5 Concert Prices....................................................................................................................31
12-6 Radio Stations and Rock Concerts.....................................................................................31
Chapter (13)-14..............................................................................................................................32
14-1 Barbie Dolls and Accessories.............................................................................................32
14-2 German Brothels................................................................................................................32
14-3 Selling Salsa........................................................................................................................32
14-4 Microwave Ovens..............................................................................................................32
14-5 Music Pricing......................................................................................................................33
14-6 Bundling.............................................................................................................................33
Chapter 15......................................................................................................................................35
15-1 To Vote or Not to Vote......................................................................................................35
15-2 To Vote or Not to Vote Part II............................................................................................35
15-3 Compatibility......................................................................................................................35
15-4 Salary Negotiation.............................................................................................................35
15-5 Renegotiating Employment Contracts...............................................................................36
