Week 1
Discussion 1
Select a macroeconomic event and explain why you believe that this event does influence management decisions and why it cannot be controlled by management.
Discussion 2
Select a specific industry and then identify and discuss a significant trend in supply or demand that directly influences management's pricing decisions.
Assignment 1
Answer the following questions in your text and submit the answers and any supporting spreadsheets to the Week One Dropbox.
- Application Question 2, page 14
- Application Question 5, pages 44-45
Week 2
Discussion 1
This week we will be discussing demand elasticity and the impact of consumer behavior on demand.
Demand elasticity is actually a quantitative measurement designed to show percentage changes in quantity demands by consumers. Elasticity is measured in terms of product prices, consumer income, prices of other goods and services, and several other variables. Elasticity, then, is a measure of the responsiveness to the changes in these variables. For the first part of this week's discussion complete the following task by Wednesday and then respond to at least two of your classmates' posting by Sunday:
- Select a product that is marketed in the U.S. that has shown significant movements in consumer demand elasticity. Identify the reasons for the movements and explain how the elasticity has affected management's ability to control pricing.
Discussion 2
For the second part of this week's discussion complete the following task by Friday and then respond to at least two of your classmates' posting by Sunday:
- Select one of the five non-statistical methods, briefly define the method, explain the value in analyzing consumer behavior and demand, and then provide an actual example.
Assignment
Application Question 6, page 85
Application Question 3, page 112
Week 3
Discussion 1
Provide an example (preferably from an actual business operation) that demonstrates the differences in economic profit and accounting profit. You should include opportunity costs (explicit and implicit) in the comparison. Using your actual profit calculations explain why there is a difference in the bottom-line measured profits and why it is important to look at both.
Discussion 2
Identify and discuss the primary factors that are necessary to achieve economies of scale.
Assignment
Application Question 3, page 141
The following discussion describes a new inventory system used by J. C. Penney39:
In an industry where the goal is rapid turnaround of merchandise, J.C. Penney stores now hold almost no extra inventory of house-brand shirts. Less than a decade ago, Penney would have stored thousands of them in warehouses across the U.S., tying up capital and slowly going out of style.
The entire program is designed and operated by TAL Apparel Ltd., a closely held Hong Kong shirt maker. TAL collects point-of-sale data for Penney's shirts directly from its stores in North America for analysis through a computer model it designed. The Hong Kong company then decides how many shirts to make, and in what styles, colors, and sizes. The manufacturer sends the shirts directly to each Penney store, bypassing the retailer's warehouses and corporate decision makers.
Discuss how this case illustrates the concept of the opportunity cost of capital.
How does this innovation also help in demand management?
Application Question 1, page 168
Discuss how the examples in the opening case show how the choices facing a firm making a long-run decision on plant location are much greater than those for a firm with a plant already in operation.
Why is the long run considered to be a planning horizon?
Week 4
Discussion 1
Select one of the major market structures outlined on page 173 of the text, and then identify two existing companies that you believe represent this structure and explain why.
Discussion 2
Using the Herfindahl-Hirschman Index on pages 215-216 of the text identify the market power of at least two companies.
Assignment
Answer the following questions in your text and submit the answers and any supporting spreadsheets to the Week Four Dropbox.
- Application Question 3, page 194
- Application Question 4, page 229
Application Question 3, page 194
· Discuss how these facts are consistent with the model of perfect competition.
Application Question 4, page 229
· Discuss the role of consumer demand in influencing Parker Pen's strategies.
· Do you think Parker will be able to maintain its market power in China? Explain.
Week 5
Preliminary Proposal
- Submit your Preliminary Proposal and Outline no later than 11:59 pm Sunday of Week 5. Please attach it to your post rather than copying and pasting a lengthy file. This is a preliminary proposal . . do the best you can drawing upon our study to this point, and ask for feedback (it's useful!).
- Review and reply to fellow student's proposals.
Discussion 1
Visit the Prisoner's Dilemma site and play Prisoner's Dilemma at least twice, changing your strategy between attempts. Then, post your responses and explain how you think this strategy game helps managers make pricing decisions.
Discussion 2
Identify an industry or a company that practices price discrimination, then described the pricing strategy and finish by stating why you consider this an effective pricing strategy for the company or the industry.
Assignment
Instructions
Answer the following questions in your text and submit the answers and any supporting spreadsheets to the Week Five Dropbox.
- Application Question 2, page 255
- Application Question 3 , page 287
Application Question 2, page 255
· Discuss how the oligopoly models presented in this chapter apply to the behavior of Home Depot and Lowe's.
Application Question 3 , page 287
· Discuss how price elasticity of demand influences the pricing strategies of Linear Technology Corp. What market model best describes this industry? Explain
Week 6
Discussion 1
Review the most current GDP measurement for the U.S. and one other country. Identify any differences between the two measurements and explain why the differences exist, i.e., the components of the measurements are different.
Discussion 2
How has the tightening of consumer credited effected individual spending and in turn the U.S. economy? Has this strategy by the financial institutions helped our economic recovery?
Assignment
Answer the following questions in your text and submit the answers and any supporting spreadsheets to the Week Six Dropbox.
- Application Question 2, page 319
- Application Question 1, page 359
Application Question 2 Page 319
From the Bureau of Economic Analysis Web page (www.bea.gov), compare real GDP for 1970, 1980, 1990, 2000, and 2010. Show the percentage change in real GDP over each of those decades. Do the percentages of GDP spent on consumption (C), investment (I), government (G), exports (X), and imports (M) differ significantly among those years? Are there changes in the balance of trade over the period? Explain.
Application Question 1, page 359
1. Coming amid continued turmoil in the financial and credit markets, the report sent stocks lower, with the Dow Jones Industrial Average falling 146.70 points Friday to close at 11,893.69.
2. Administration officials said they were confident conditions would improve as tax rebates that are part of the recent $152 billion economic-stimulus package begin to reach consumers.
3. The Fed is expected to cut interest rates again to prop up the economy.
Week 7
Discussion 1
Does a change in the fed funds rate really have an actual direct monetary influence on the markets or is it nothing more than a perception? Explain
Discussion 2
Explain how changes in monetary policies can affect one or both of these measurements (AD and AS).
Assignment
- Application Question 5, page 385
- Application Question 5, page 415
Application Question 5, page 385
Building on Figures 13.5 and 13.6, show how equilibrium in the money market would change:
If money demand is less sensitive to the interest rate or
If there is a greater responsiveness of money demand to changes in income
Application Question 5, page 415
Find the most recent summary of the survey of economic forecasters in the Wall Street Journal. What are the predictions for changes in real GDP and its major components, inflation, and unemployment? Describe the degree of consensus among the various forecasters.
Week 8
Discussion 1
In recent news there was a discussion about the possibility that some European Union members were considering a strategy of intentionally devaluing their currency against the dollar in order to increase exports. Explain how it is possible for a country to intentionally devalue its' currency and then define the benefits and consequences of this strategy.
Assignment
Answer the following questions in your text and submit the answers and any supporting spreadsheets to the Dropbox.
- Application Question 3, page 451
- Application Question 4, page 470
Application Question 3, page 451
Based on the discussion in this chapter, update the controversy over the value of the Chinese yuan in foreign currency markets. Is China still using central bank foreign exchange policy to maintain the value of the yuan? What is the current policy of the United States on this issue?
Application Question 4, page 470
What variables other than price appear to have the biggest impact on the demand for McDonald's products? How much influence does the company have over these variables?
Course Project
Instructions and Grading Criteria
Overview
The Course Project is a formal report (including an executive summary) that provides an insightful analysis of a company's market structure and production decisions, i.e., expansion, or other economic principles. The project paper must include a minimum of two economic principles studied during the term of the course, i.e. linear regression analysis and trend analysis. The analysis (purpose, methodology, and conclusion) must be documented with academic support in the form of references and in-text citations utilizing APA style.
This proposal should include, but not necessarily be limited to, the following:
- Identification of the firm involved (text case study, existing firm, or proposed firm)
- Identification of the appropriate market structure in which the firm is or will do business (eg. competitive, monopolistic, etc.)
- Identification of internal strengths and weaknesses (or indication of an intention to study them) given microeconomic expectations and external opportunities and threats given macroeconomic expectations and implications for the firm (or indication of an intention to study this)
- Identification of optimal managerial strategies and tactics given the above, or indication of an intention to do so. These recommended managerial actions should include pricing, production, and resource utilization given the theory and evidence. You should also indicate how each would be expected to add to the value of the selected firm.
The format should:
- Be written using APA style
- Include an executive summary
- Be at least 8 pages of narrative and statistical (spreadsheets) content
You will be graded on three aspects of this project; a Preliminary Proposal and Outline, the Finalized Course Project and your Review and Response of other student's projects.
Deliverables
Preliminary Proposal (10 pts.)
Submit a Preliminary Proposal and Outline before Sunday of Week 5 in the "Student Project Preliminary Proposal" Discussion topic. In the same Discussion topic, submit feedback to other students on their proposals.
Remember that this is a preliminary proposal; do the best you can and ask for feedback on specific issues if you'd like. Feedback you receive from your instructor and fellow students will assist you in refining your proposal.
Finalized Course Project (200 pts.)
Submit your Finalized Course Project to the "Final Course Project and Discussion" Discussion topic before Sunday of Week 7. At the same time, submit it to the "Final Project" Dropbox for instructor grading.
Review and Response (10 pts.)
Review and comment on other student's Finalized Course Projects in the "Final Course Project and Discussion" Discussion topic before Saturday of Week 8.
