Mba 851 Study guides, Class notes & Summaries

Acid-Test Ratio (Quick Ratio) - ANSWER-The ratio of current assets and current liabilities. (

Irene's Dairy is deciding whether or not to enter the market for ice cream, currently monopolized by Mattie's Ice Cream. If it enters the market, Mattie's can either accommodate him and share his 10 million in profits equally with Irene or fight him and cause a 5 million loss for each in a price war. If Mattie wants to discourage Irene from entering the market, what strategy should she follow? a. Threaten to always accommodate b. Always accommodate c. Threaten to always fight d. All ...

Oligopoly - ANSWER-a market dominated by a small number of firms, whose actions, directly affect one another's profits, making the fates of the firms interdependent The four-firm concentration ratio - ANSWER-the percentage of sales accounted for by the top four firms in a market or industry The higher the concentration ratio - ANSWER-the greater is the degree of market dominance by a small number of firms An effective monopoly is said to exist when - ANSWER-the single-firm concentratio...

production function - ANSWER-function that defines maximum output produced in given set of inputs production function formula - ANSWER-Q = F (K,L) K - ANSWER-Capital L - ANSWER-Labor short run - ANSWER-time frame, some factors of production fixed, really for labor long run - ANSWER-time frame, all factors of production are variable total product - ANSWER-max level of output that can produced with inputs average product - ANSWER-measure of output per unit of input average ...

economics - ANSWER-the study of decision-making in the presence of scarcity managerial economics - ANSWER-the application of economic analysis to managerial decision making marginal reasoning - ANSWER-considering the effect of a small change Examples of tradeoffs - ANSWER-how to produce what prices to charge whether to innovate Younger individuals invest in _________ assets, while older individuals invest in ______ assets, like bonds. - ANSWER-riskier ; safer Examples of other d...

Managerial economics - ANSWER-study of how to direct scare resources in the way that most efficiently achieves a managerial goal MICROECONOMICS tends to be more _______, while MANAGERIAL ECONOMICS is largely ________. - ANSWER-descriptive, prescriptive ("should") How has managerial economics been able to apply theory to the real world? (3 ways) - ANSWER-1. creating measurable objectives for the firm 2. minimizing unnecessary assumptions 3. enabling measurement with analysis What is ...

Manager - ANSWER-person who directs resources to achieve a stated goal Economics - ANSWER-the science of making decisions in the presence of scarce resources Resources - ANSWER-anything used to produce a good or service Managerial Economics - ANSWER-study of how direct scarce resources in the way that most efficiently achieves a managerial goal Effective Management - ANSWER-identify goals and constraints, understand incentives Nature and Importance of Profits - ANSWER-typical firm...

game theory - ANSWER-aid to decision making when agents' payoffs, depends on the actions taken by other players simultaneous-move game - ANSWER-makes decision without the knowledge of the other players decisions sequential-move game - ANSWER-makes moves after observing the other player's move one-shot game - ANSWER-make decisions only one repeated game - ANSWER-make decisions more than once dominant strategy - ANSWER-strategy that result in the highest payoff to a player regardl...

Negative Externality - ANSWER-Cost borne by parties who are not involved in the production or consumption of a good Positive Externality - ANSWER-Benefit gained by parties who are not involved in the production or consumption of a good Social Marginal Cost - ANSWER-the added cost of covering the negative externality Spot Exchange - ANSWER-an informal relationship between a buyer and a seller in which neither party is obligated to adhere to specific terms for exchange Contract - ANSWE...