Questions from Managerial Economics


Q: The personal computer has evolved from a tool for computation to an

The personal computer has evolved from a tool for computation to an Internet-cantered communications device. Is this likely to change corporate structures by increasing the efficiency of smaller, more...

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Q: Cite three important categories of transactions costs encountered within the firm,

Cite three important categories of transactions costs encountered within the firm, and give some examples.

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Q: What is the Coase Theorem, and why is it important in

What is the Coase Theorem, and why is it important in managerial economics?

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Q: In a typical corporation, who are the “principals” and

In a typical corporation, who are the “principals” and who are the “agents”? What is the firm’s agency problem?

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Q: Executive stock options are often seen as a simple and effective solution

Executive stock options are often seen as a simple and effective solution to the “other people’s money” problem that can occur when managers with little ownership interest mismanage firm investment op...

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Q: Describe three basic needs that must be met in the design of

Describe three basic needs that must be met in the design of any organization.

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Q: Discuss important differences between centralized and decentralized allocations of decision authority within

Discuss important differences between centralized and decentralized allocations of decision authority within an organization. Are these methods of decision authority allocation mutually exclusive?

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Q: Is use of least-cost input combinations a necessary condition for

Is use of least-cost input combinations a necessary condition for profit maximization? Is it a sufficient condition? Explain.

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Q: “Output per worker is expected to increase by 10 percent during

“Output per worker is expected to increase by 10 percent during the next year. Therefore, wages can also increase by 10 percent with no harmful effects on employment, output prices, or employer profit...

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Q: Commission-based and piece-rate-based compensation plans are

Commission-based and piece-rate-based compensation plans are commonly employed by businesses. Use the concepts developed in the chapter to explain these phenomena.

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