economia Flashcards
Manager
person who directs resources to achieve a stated goal
Economics
the science of making decisions in the presence of scarce resources
Scarcity
involves making choice from alternatives available
Resources
anything used to achieve a goal or produce a service or good
Managerial economics
the study of how to direct scarce resources in the way that most efficiently achieves a managerial goal
TOC
Total Opportunity Cost
Five Forces Framework and Industry Profitability
Entry
Power of Input Suppliers
Power of Buyers
Industry rivalry
Substitutes and Complements
Incentives
how resources are used and how hard workers work
Consumer – Producer:
Occurs because of the competing economic interests of both consumer wants a low price, producer a high price – and leads to compromise, the equilibrium price.
Consumer-Consumer
Reduces the negotiating power of consumers in the marketplace. It arises because of the economic doctrine of scarcity.
Producer – Producer
Reduces the negotiating power of producers. Their disciplining
device functions only when multiple sellers of a product compete in the market
Government – Market
The government intervenes to discipline the market when
agents on either side of the market find themselves disadvantaged
Present Value (PV)
The amount that would have to be invested today at the prevailing
interest rate to generate the given future value (FV)
PV = FV
when i = 0
Net Present Value (NPV)
The present value of the income stream generated by a project
minus the current cost of the project.
Change in quantity demanded
Changes in the price of a good lead to a change in the quantity
demanded of that good. This corresponds to a movement along a given demand curve.
Change in demand
Changes in variables other than the price of a good, such as income or the price
of another good, lead to a change in demand.
Demand shifters
Variables other than the price of a good that influence demand (demand curve
moves to the right or to the left).
Normal good
A good for which an increase (decrease) in income leads to an increase (decrease) in
the demand for that good
Inferior good
A good for which an increase (decrease) in income leads to a decrease (increase) in
the demand for that good.
Substitutes
Goods for which an increase (decrease) in the price of one good leads to an
increase (decrease) in the demand for the other good.
Complements
Goods for which an increase (decrease) in the price of one good leads to a decrease
(increase) in the demand for the other good.
Demand function
A function that describes how much of a good will be purchased at alternative
prices of that good and related goods, alternative income levels and alternative values of other
variables affecting demand
Linear demand function
A representation of the demand function in which the demand for a given
good is a linear function of prices, income levels, and other variable influencing demand
Consumer surplus
The value consumers get from a good but do not have to pay for. This is the area
above the price paid for a good, but below the demand curve
Law of supply
As selling price increases (decreases) the quantity a supplier is willing to produce
increases (decreases
