Managerial Economics in a Global Economy

Preface
About the Author
Each ends with a summary, discussion questions, and problems.
PART ONE: INTRODUCTION
1. The Nature and Scope of Managerial Economics
1.1.. The Scope of Managerial Economics
1.2.. The Basic Process of Decision Making
Case Study 1.1. Peter Drucker--The Man Who Invented Management
Case Study 1.2. The Management Revolution
1.3.. The Theory of the Firm
Case Study 1.3. The Objective and Strategy of Firms in the Cigarette Industry
1.4.. The Nature and Function of Profits
Case Study 1.4. Profits in the Personal Computer Industry
1.5.. Business Ethics
Case Study 1.5. Business Ethics at Boeing
Case Study 1.6. Enron--Andersen, and Other Financial Disasters
1.6.. The International Framework of Managerial Economics
Case Study 1.7. The Rise of the Global Corporation
Case Study 1.8. The Global Business Leader
Case Study 1.9. Global Most Admired Companies
Case Study 1.10. Globalization and Terrorism
1.7.. Managerial Economics and the Internet
Case Study 1.11. The Most Important Internet Site Addresses for Managerial Economics
Appendix 1: The Basics of Demand, Supply, and Equilibrium.
Case Study 1.12. Changes in Demand and Supply and the Price of PCs
Case Study 1.13. Changes in Demand and Supply and Coffee Prices
2. Optimization Techniques and New Management Tools
2.1.. Methods of Expressing Economic Relationships
2.2.. Total, Average, and Marginal Relationships
Case Study 2.1. Total, Average, and Marginal Cost in the U.S. Steel Industry
2.3.. Optimization Analysis
Case Study 2.2. Optimal Pollution Control
2.4.. Constrained Optimization
Case Study 2.3. Pursuing Multiple Objectives under Constraints by Global Corporations
2.5.. New Management Tools for Optimization
Case Study 2.4. Benchmarking at Xerox, Ford, and Mobil
Case Study 2.5. Total Quality Management at Johnson & Johnson, Motorola, General Electric, and Ford
Case Study 2.6. Reenginering at GE
Case Study 2.7. Applying Learning-Organization Principles at Ford and Southwest Airlines
2.6.. Other Management Tools for Optimization
2.7.. New Management Tools and Functional Specialization
Case Study 2.8. The American Business Model
Case Study 2.9. When Governance Rules Fail, Public Trust is Eroded
Appendix 2: Differential Calculus and Optimization Techniques.
PART TWO: DEMAND ANALYSIS
3. Demand Theory
3.1.. The Demand for a Commodity
Case Study 3.1. The Demand for Big Macs
Case Study 3.2. The Demand for Sweet Potatoes in the United States
3.2.. Price Elasticity of Demand
Case Study 3.3. Price Elasticities of Demand in the Real World
3.3.. Income Elasticity of Demand
Case Study 3.4. Income Elasticities of Demand in the Real World
3.4.. Cross-Price Elasticity of Demand
Case Study 3.5. Cross-Price Elasticities of Demand in the Real World
Case Study 3.6. Substitution between Domestic and Foreign Goods
3.5.. Using Elasticities in Managerial Decision Making
Case Study 3.7. Demand Elasticities for Alcoholic Beverages in the United States
3.6.. International Convergence of Tastes
Case Study 3.8. Gillette Introduces Sensor and Mach3 Razors--Two Truly Global Products
Case Study 3.9. Ford's World Car(s)
3.7.. Electronic Commerce
Case Study 3.10. e-Commerce at Amazon.com
Case Study 3.11. eBay and Some Internet Veterans are Cashing In
Appendix 3: Behind the Market Curve-The Theory of Consumer Choice.
4. Demand Estimation
4.1.. The Identification Problem
4.2.. Marketing Research Approaches to Demand Estimation
Case Study 4.1. Micromarketing: Marketers Zero In on Their Customers
Case Study 4.2. Estimation of the Demand for Oranges by Market Experiment
Case Study 4.3. Reaching Consumers in the Vanishing Mass Market
4.3.. Introduction to Regression Analysis
4.4.. Simple Regression Analysis
4.5.. Multiple Regression Analysis
4.6.. Problems in Regression Analysis
4.7.. Demand Estimation by Regression Analysis
4.8.. Estimating the Demand for U.S. Imports and Exports
Case Study 4.5. Price and Income Elasticities of Imports and Exports in the Real World
Case Study 4.6. The Major Commodity Exports and Imports of the United States
Case Study 4.7. The Major Trade Partners of the United States
Case Study 4.8. The Top U.S. International Exporters
Appendix 4: Regression Analysis with Excel.
5. Demand Forecasting
5.1.. Qualitative Forecasts
Case Study 5.1. Forecasting the Number of McDonald's Restaurants Worldwide
5.2.. Time-Series Analysis
Case Study 5.2. Forecasting New Housing Starts with Time-Series Analysis
5.3.. Smoothing Techniques
Case Study 5.3. Forecasting Lumber Sales with Smoothing Techniques
5.4.. Barometric Methods
Case Study 5.4. Forecasting the Level of Economic Activity with Composite and Diffusion Indexes
Case Study 5.5. The Index of Leading Indicators Goes Global
5.5.. Econometric Models
Case Study 5.6. Forecasting the Demand for Air Travel over the North Atlantic
Case Study 5.7. Economic Forecasts with Large Econometric Models
Case Study 5.8. Risks in Demand Forecasting
5.6.. Input-Output Forecasting
Appendix 5: Forecasting Fluctuations in Time-Series Analysis Using Excel.
PART THREE: PRODUCTION AND COST ANALYSIS
6. Production Theory and Estimation
6.1.. The Organization of a Production and the Production Function
6.2.. The Production Function with One Variable Input
6.3.. Optimal Use of the Variable Input
Case Study 6.1. Labor Productivity and Total Compensation in the U.S. and Abroad
6.4.. The Production Function with Two Variable Inputs
6.5.. Optimal Combination of Inputs
Case Study 6.2. Substitutability between Gasoline Consumption and Driving Time
6.6.. Returns to Scale
Case Study 6.3. Returns to Scale in U.S. Manufacturing Industry
Case Study 6.4. General Motors Decides Smaller Is Better
6.7.. Empirical Production Functions
Case Study 6.5. Output Elasticities in U.S. Manufacturing Industries
6.8.. The Innovation Process
Case Study 6.6. How Do Firms Get New Technology?
6.9.. Innovation and Global Competitiveness
Case Study 6.7. How Xerox Lost and Regained International Competitiveness and Became a Leader in Information Technology
Case Study 6.8. The New U.S. Digital Factory
Case Study 6.9. The Euro and the International Competitiveness of European Firms
Appendix 6: Production Analysis with Calculus.
7. Cost Theory and Estimation
7.1.. The Nature of Costs
7.2.. Short-Run Cost Functions
Case Study 7.1. Per-Unit Cost Curves in the Cultivation of Corn
7.3.. Long-Run Cost Curves
Case Study 7.2. The Long-Run Average Cost Curve in Electricity Generation
7.4.. Plant Size and Economies of Scale
Case Study 7.3. The Shape of the Long-Run Average Cost Curve in Various U.S. Industries
7.5.. Learning Curves
Case Study 7.4. To Reduce Costs, Firms Often Look Far Afield
7.6.. Minimizing Costs Internationally--The New Economies of Scale
Case Study 7.5. The IBM PC and the Boeing 777 and 787 are not All but American!
7.7.. Logistics or Supply--Chain Management
Case Study 7.6. Logistics at National Semiconductors, Saturn, and Compaq
7.8.. Cost Volume Profit Analysis and Operating Leverage
Case Study 7.7. Breakeven Analysis for Lockheed's Tri-Star and Europe's Airbus Industrie
7.9.. Empirical Estimation of Cost Functions
Case Study 7.8. Estimates of Short-Run and Long-Run Functions
Appendix 7: Cost Analysis with Calculus.
PART FOUR: MARKET STRUCTURE AND PRICING PRACTICES.
8. Market Structure: Perfect Competition, Monopoly, and Monopolistic Competition
8.1.. Market Structure and Degree of Competition
8.2.. Perfect Competition
Case Study 8.1. Competition in the New York Stock Market
Case Study 8.2. Long-Run Adjustment in the U.S.
8.3.. Competition in the Global Economy
Case Study 8.3. Foreign Exchange Quotations of the Dollar
Case Study 8.4. The Exchange Rate of the U.S. Dollar and the Profitability of U.S. Firms
8.4.. Monopoly
Case Study 8.5. Barriers to Entry and Monopoly by Alcoa
Case Study 8.6. The Market Value of Monopoly Profits in the New York City Taxi Industry
8.5.. Monopolistic Competition
Case Study 8.7. The Monopolistically Competitive Restaurant Market
Case Study 8.8. Advertisers Are Taking on Competitors by Name..And Being Sued
Appendix 9: Oligopoly Theory Mathematically.
9. Oligopoly and Firm Architecture
9.1.. Oligopoly and Market Concentration
Case Study 9.1. Brands: Thrive or Die
Case Study 9.2. Industrial Concentration in the United States
9.2.. Oligopoly Models
Case Study 9.3. The Organization of Petroleum Exporting Countries (OPEC) Cartel
9.3.. Profitability and Efficiency Implications of Oligopoly
Case Study 9.4. Firm Size and Profitability
Case Study 9.5. Measuring the Pure Efficiency of Operating Units 380A
9.4.. The Sales Maximization Model
9.5.. The March of Global Oligopolists
Case Study 9.6. The Globalization of the Automobile Industry
Case Study 9.7. Rising Competition in Global Banking
Case Study 9.8. The Globalization of the Pharmaceutical Industry
9.6.. The Architecture of the Ideal Firm and the Creative Company
Case Study 9.9. Firm Architecture and Organizational Competitiveness
Case Study 9.10. The Top Innovative Companies in the World
9.7.. The Virtual Corporation and Relationship Enterprises
Case Study 9.11. Relationship Enterprises in Aerospace, Airlines, Telecommunications, and Automobiles
10. Game Theory and Strategic Behavior
10.1.. Strategic Behavior and Game Theory
Case Study 10.1. Military Strategy and Strategic Business Decisions
10.2.. Dominant Strategy and Nash Equilibrium
Case Study 10.2. Dell Computers and Nash Equilibrium
10.3.. The Prisoners' Dilemma
10.4.. Price and Nonprice Competition, Cartel Cheating, and Prisoners' Dilemma
Case Study 10.3. The Airlines' Fare War and the Prisoners' Dilemma
10.5.. Repeated Games and Tit-for-Tat Strategy
10.6.. Strategic Moves
Case Study 10.4. Wal-Mart's Preemptive Expansion Marketing Strategy
10.7.. Strategic Behavior and International Competitiveness
Case Study 10.5. Companies' Strategic Mistakes and Failures
10.8.. Sequential Games and Decision Trees
Case Study 10.6. Airbus's Decision to Build the A380 and Boeing's Sonic Cruiser Response and the 797-2
11. Pricing Practices
11.1.. Pricing of Multiple Products
Case Study 11.1. Optimal Pricing and Output by Gillette
11.2.. Price Discrimination
Case Study 11.2. Price Discrimination by Con Edison
11.3.. International Price Discrimination and Dumping
Case Study 11.3. Kodak Antidumping Disputes with Fuji
11.4.. Transfer Pricing
Case Study 11.4. Transfer Pricing by Multinationals Operating in Emerging Markets
Case Study 11.5. Transfer Pricing in Advanced Countries
11.5.. Pricing in Practice
Case Study 11.6. Incremental Pricing at Continental Airlines
Case Study 11.7. Peak-Load Pricing by Con Edison
Case Study 11.8. Bundling in the Leasing of Movies
Case Study 11.9. No-Haggling Value Pricing in Car Buying
Case Study 11.10. Name Your Price at Priceline
Appendix 11: Third-Degree Price Discrimination with Calculus.
PART FIVE: REGULATION, RISK ANALYSIS, AND CAPITAL BUDGETING.
12. Regulation and Antitrust: The Role of Government in the Economy
12.1.. Government Regulation to Support Business and to Protect Consumers, Workers, and the Environment
Case Study 12.1. Restrictions on Competition in the Pricing of Milk in New York City and the Nation
Case Study 12.2. The FDA Steps Up Regulation of the Food and Drug Industry
Case Study 12.3. Regulation Greatly Reduced Air Pollution
12.2.. Externalities and Regulation
Case Study 12.4. The Market for Dumping Rights
12.3.. Public Utility Regulation
Case Study 12.5. Regulated Electricity Rates for Con Edison
12.4.. Antitrust: Government Regulation of Market Structure and Conduct
12.5.. Enforcement of Antitrust Laws and the Deregulation Movement
Case Study 12.6. The IBM and AT&T Cases
Case Study 12.7. Antitrust and the New Merger Boom
Case Study 12.8. The Microsoft Antitrust Case
Case Study 12.9. Deregulation of the Airline Industry: An Assessment
12.6.. Regulation of International Competition
Case Study 12.10. Voluntary Export Restraints on Japanese Automobiles to the United States
12.7.. The Effect of Taxation on Business Decisions
Case Study 12.11. Corporate Tax Rates around the World
Case Study 12.12. U.S. Border Taxes and Export Subsidies
13. Risk Analysis
13.1.. Risk and Uncertainty in Managerial Decision Making
Case Study 13.1. The Risk Faced by Coca-Cola in Changing Its Secret Formula
Case Study 13.2. The Biggest Business Failures
13.2.. Measuring Risk with Probability Distributions
13.3.. Utility Theory and Risk Aversion
Case Study 13.3. RiskMetrics: J.P. />Case Study 13.4. The Purchase of Insurance and Gambling by the Same Individual--A Seeming Contradiction
13.4.. Adjusting the Valuation Model for Risk
Case Study 13.5. Adjusting the Valuation Model for Risk in the Real World
13.5.. Other Techniques for Incorporating Risk into Decision Making
13.6.. Decision Making under Uncertainty
Case Study 13.6. Spreading Risks in the Choice of a Portfolio
13.7.. Foreign-Exchange Risks and Hedging
Case Study 13.7. How Foreign Stocks Have Benefited a Domestic Portfolio
Case Study 13.8. Information, Risk, and the Collapse of Long-Term Capital Management
13.8.. Information and Risk
Case Study 13.9. Do Golden Parachutes Reward Failure?
Case Study 13.10. Auctioning of the Airwaves
14. Long-Run Investment Decisions: Capital Budgeting
14.1.. Capital Budgeting: An Overview />Case Study 14.1. Cost-Benefit Analysis and the SST
14.2.. The Capital Budgeting Process
Case Study 14.2. The Eurotunnel: Another Bad French-British Investment?
Case Study 14.3. Pennzoil's $3 Billion Capital Budgeting Challenge
Case Study 14.4. Capital Budgeting for Investments in Human Capital
14.3.. Capital Rationing and the Profitability Index
14.4.. The Cost of Capital
Case Study 14.5. The Choice between Equity and Debt
Case Study 14.6. Capital Budgeting Techniques of Major U.S. Firms
14.5.. Reviewing Investment Projects After Implementation />14.6.. The Cost of Capital and International Competitiveness
Appendixes
A: Compounding, Discounting, and Present Value
B: Interest Factor Tables
C: Statistical Tables
D: Answers to Selected Problems
Glossary
Index