Questions from Managerial Economics


Q: Not long ago, the Federal Communications Commission (FCC) implemented

Not long ago, the Federal Communications Commission (FCC) implemented “local number portability” rules allowing cellular phone consumers to switch cellular providers within the same geographic area an...

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Q: The manager of your company’s pension fund is compensated based entirely on

The manager of your company’s pension fund is compensated based entirely on fund performance; he earned over $1.2 million last year. As a result, the fund is contemplating a proposal to cap the compen...

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Q: The division of a large office services company that makes high-

The division of a large office services company that makes high-end copiers recently signed a five-year, $25 million contract for IT services from CGI Group, a Canadian information technology company....

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Q: The Wall Street Journal reported that Juniper Networks Inc.—a maker

The Wall Street Journal reported that Juniper Networks Inc.—a maker of company network equipment—plans to offer its more than 1,000 employees the opportunity to reprise their stock options. Juniper’s...

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Q: Suppose that Honda is on the verge of signing a 15-

Suppose that Honda is on the verge of signing a 15-year contract with TRW to supply airbags. The terms of the contract include providing Honda with 85 percent of the airbags used in new automobiles. J...

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Q: EFI—a material handling company—pays each of its salespersons

EFI—a material handling company—pays each of its salespersons a base salary plus a percentage of revenues generated. To reduce overhead, EFI has switched from giving each salesperson a company car to...

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Q: Teletronics reported record profits of $100,000 last year and

Teletronics reported record profits of $100,000 last year and is on track to exceed those profits this year. Teletronics competes in a very competitive market where many of the firms are merging in an...

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Q: Recently, Air Liquide signed a long-term contract with Yan’an

Recently, Air Liquide signed a long-term contract with Yan’an Energy and Chemical Co., a subsidiary of Yanchang Petroleum Group—one of China’s largest firms engaged in oil and natural gas exploration...

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Q: A few years ago, the Boston Globe reported that the city

A few years ago, the Boston Globe reported that the city of Boston planned to spend $14 million to convert the Fleet Center sports arena and entertainment center into an appropriate venue for the Demo...

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Q: Business-process outsourcing (BPO) is a type of outsourcing

Business-process outsourcing (BPO) is a type of outsourcing that consists of contracting operations and responsibilities of a specific business process (e.g., human resources) to a third-party service...

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