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Managerial Flashcards

1
Q

Is the study of how to direct scarce resources in the way that most efficiently achieves a managerial goal.

A

Managerial Economics

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2
Q

It is a form of profit that derived from producing goods and services while factoring in the alternative uses of a company’s resources.

A

Economic Profit

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3
Q

It involves actual payments made by a firm for various resources or input.

A

Explicit Cost

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4
Q

These are opportunity costs associated with the use of resources that the firm already owns.

A

Implicit Cost

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5
Q

It is the profit earned after various costs and expenses are subtracted from total revenue or total sales.

A

Accounting Profit

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6
Q

Five Forces and Industry Profitability by Michael Porter

A
  1. Entry
  2. Power of Suppliers
  3. Power of Buyers
  4. Industry Rivalry
  5. Substitutes and Complements
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7
Q

It plays a vital role within the firm. Constructing this will enhance productivity and profitabilty.

A

Incentives

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8
Q

3 Rivalries in Economic Transaction

A

Consumer - Producer Rivalry
Consumer - Consumer Rivalry
Producer - Producer Rivalry

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9
Q

It is a core financial principle that states a sum of money is worth more now than in the future.

A

Time Value of Money (TVM)

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10
Q

Managers use this technique to properly account for the timing of receipts and expenditures.

A

Present Value Anaysis

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11
Q

Sustainable profits of existing firms depend on barriers to __________.

A

Entry

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12
Q

Industry profits tend to be lower when suppliers have the power to negotiate favorable terms for their inputs.

A

Power of Input Suppliers

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13
Q

Industry profits tend to be lower when customers have the power to negotiate favorable terms for the products or services in the industry.

A

Power of Buyers

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14
Q

Sustainability of industry profits depends on the nature and intensity of rivalry among firms. The rivalry is less in concentrated industry.

A

Industry Rivalry

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15
Q

Industry profits also depend on the price and value of interrelated products and services.

A

Substitutes and Complements

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16
Q

The Economics of Effective Management

A
  1. Identify Goals and Constraints
  2. Recognize the Nature and Importance of Profits
  3. Understand Incentives
  4. Understand Market
  5. Recognize the Time Value of Money
  6. Use Marginal Analysis
  7. Make Data-Driven Decisions
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17
Q

A collection of resources that is transformed into products demanded by consumers.

A

Firm

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18
Q

These are incurred when a company enters into a contract with other entities.

A

Transaction Cost

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19
Q

Cost incurred for searching and gathering information, recognizing potential sources of purchase.

A

Search and Investigation

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20
Q

Costs associated with negotiation under both parties settle on a final agreement.

A

Negotiation Cost

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21
Q

Costs typically focus on ensuring the people who sign a contract comply with the terms of its agreement.

A

Enforcing of Contracts and Coordinating Transactions

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22
Q

A major cost is that, in hiring workers to do the work within the firm, the firm incurs this cost to ensure the work is done efficiently.

A

Monitoring and Supervision Costs

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23
Q

It is the act of hiring an external company to work for you instead of in-house.

A

Outsourcing

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24
Q

Advantages of Outsourcing

A
  1. Access to Larger Talent Pool
  2. Lower Labor Cost
  3. Increased Efficiency
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25
Disadvantages of Outsourcing
1. Decreased Security 2. Poor Communication leads to poor product quality 3. Difficulty with quality control. 4. Language
26
Economic Objectives
1. Increase Market Share 2. Increase Revenue Growth 3. Technological Advancement 4. Customer Satisfaction 5. Increased Shareholder Value
27
Is the percentage of an industry’s sales that a particular company owns.
Market Share
28
Is the amount of money your company makes over a predetermined time compared to the previous, identical amount of time.
Revenue Growth
29
What are some of the strategies that the firm can apply to increase the market share?
Improve product/service Conduct market research Identify new customer segments Highlighting unique features or benefits Innovation Effective advertising
30
What are some of the strategies to increase revenue growth?
Set defined goals or target sales Target repeat/former customers Grow your geographic reach Add new payment forms Offer subscriptions
31
These have entirely reshaped the organizations by making their business processes highly integrated, and more streamlined. Investment in research and development is one of the key aspects.
Technological Advancements
32
What are some of the benefits of having technological advancements
Improved communication and collaboration Increased productivity (online accounting software) Reducing travel costs Improved competetiveness
33
Strategies for meeting the customer's satisfaction
Collection of feedback Implementing multiple support channels Creation of customer service culture Have a 24/7 customer support
34
It is the value to an investor of owning a single share in a company
Shareholder Value
35
What are some of the strategies to increase sales revenue?
Increase the productivity of a factory Launch a new product and find new customer through a better targeted marketing strategy while the strategies to decrease cost The firm may decrease the inventory Decrease wastage in production Focus on more profitable products
36
Noneconomic objectives
1. Provide a good place for our employees to work. 2. Provide good products/services to our customers. 3. Act as a good citizen in our society.
37
2 types of risk
Business Risk Financial Risk
38
It involves variation in returns due to the ups and downs of the economy, the industry, and the firm. This is the kind of risk that attends all business organizations, although to varying degrees. Some businesses are relatively stable from period to period, whereas others incur extreme fluctuations in their financial returns.
Business Risk
39
It concerns the variation in returns that is induced by leverage.
Financial Risk
40
It signifies the proportion of a company financed by debt.
Leverage
41
Taste shift to greater popularity
Shift to right
42
Income rises (for a normal good)
Shift to right
43
Price of complements rises.
Shift to left
44
Population likely to buy rises
Shift to right
45
Price of substitutes falls.
Shift to left
46
Future expectations discourage buying.
Shift to left
47
It refers to factors that influence the price and quantity of goods and services, driving supply and demand in a market.
Market Forces
48
2 types of goods that contradict the law of demand.
Veblen and Giffen Goods
49
Are luxury items that experience an increase in demand as their prices rise. Their appeal lies in their exclusivity and status symbol.
Veblen Goods
50
Are essential goods for which demand increases as their prices rise. However, this is due to limited substitution options rather than luxury perception.
Giffen Goods
51
It is the difference between willingness to pay for a good and the price that consumers actually pay for it
Consumer Surplus
52
A curve indicating the total quantity of a good that all producers in a competitive market would produce at each price, holding input prices, technology, and other variables affecting supply constant
Market Supply Curve
53
A rise in input prices
Shift to left
54
Improved Technology
Shift to right
55
Increase government subsidies
Shift to right
56
Increase product taxes
Shift to left
57
Firms leave an industry
Shift to left
58
It is the difference between the willingness to sell and the market price for a good
Producer Surplus
59
Is the total extra benefit or happiness enjoyed by producers and consumers who feel they got a good price for the product being exchanged (paid less than they were willing to pay or received more than they were willing to accept).
Total Surplus/Welfare
60
The resource are allocated in the best possible manner to maximize total welfare among consumers and producers.
Allocative Efficiency
61
Is the loss of total welfare resulting from a market producing at an allocatively inefficient price and quantity combination or producing at any level rather than equilibrium point
Deadweight Loss (DWL)
62
Anytime a market is NOT producing at its equilibrium point, there is a LOSS of total welfare, and the market is inefficient.
Allocative Inefficiency
63
The study of the movement from one equilibrium to another. Throughout this analysis, we assume that no legal restraints, such as price ceilings or floors, are in effect and that the price system is free to work to allocate goods among consumers.
Comparative Static Analysis
64
The term ________ alludes to the theoretically stable point of equilibrium.
STATIC
65
It refers to the comparison of the various points of equilibrium.
Comparative
66
Present Value formula
PV = FV/(1 + i)^n
67
Future Value formula
FV = PV(1 + i)^n
68
It states that optimal managerial decisions involve comparing the marginal (or incremental) benefits of a decision with the marginal (or incremental) costs.
Marginal Analysis
69
It refers to the additional benefits that arise by using an additional unit of the managerial control variable.
Marginal Benefit
70
It refers to the additional cost incurred by using an additional unit of the managerial control variable.
Marginal Cost
71
Are the change in net benefits that arise from a one-unit change in Q.
Marginal Net Benefit
72
It refers to the process where managers utilise factual data and statistical tools to make strategic decisions to benefit their business. Such an approach focuses on empirical evidence over intuition or experience.
Data-driven Decision-making
73
Two primary elements that are crucial for successful Data-Driven Decision Making:
1) Data Collection 2) Data Analysis
74
To maximize net benefits, the manager should increase the managerial control variable up to the point where marginal benefits equal marginal costs.
Marginal Principle
75
The additional revenues derived from a decision.
Incremental Revenue
76
The additional costs that stem from the decision.
Incremental Cost
77
Disciplines the market process.
Government and the Market
78
Relationship with Economic Theory:
Theory of the Firm Theory of Consumer Behavior Price Theory Production and Cost Theory Market Structure & Competition Theory
79
Relationship with Decision Sciences:
Numerical and Algebraic Analysis Optimization Statistical Estimation and Forecasting Discounting and Time Value Analysis
80
RelationshipwithBusinessFunctions
Production and Operations Marketing Human Resources Finance and Accounting
81
From the Standpoint of a Country From the Standpoint of a Company 1.) What goods and services should be produced? 2.) How should these goods and services be produced? 3.) For whom should these goods and services be produced?
1.) The product decision. 2.) The hiring, staffing, and capital budgeting decisions. 3.) The market segmentation decision.
82
The three ways a country can answer the questions of what, how, and for whom. These ways, referred to as processes.
Market Process Command Process Traditional Process

3rd 2 (10 decks)

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