Economics

    10-2 Increasing Customer ValueTo increase a company’s performance, a manager suggests that the company needs to increase the value of its product to customers. Describe three ways in which this advice might be incorrect (Hint: Think about what else might or might not change that affects profit.) 10-3 Intangible ResourcesWhy might intangible resources like human capital and intellectual assets be a more likely source of sustainable competitive advantage than tangible resources? 15-1 To Vote or Not to VoteMr. and Mrs. Ward typically vote oppositely in elections and so their votes “cancel each other out.” They each gain two units of utility from a vote for their positions (and lose two units of utility from a vote against their positions). However, the bother of actually voting costs each one unit of utility. Diagram a game in which they choose whether to vote or not to vote. 15-2 To Vote or Not to Vote Part IISuppose Mr. and Mrs. Ward agreed not to vote in tomorrow’s election. Would such an agreement improve utility? Would such an agreement be an equilibrium? 15-3 Shirk or WorkMicrosoft and a smaller rival often have to select from one of two competing technologies. The rival always prefers to select the same technology as Microsoft (because compatibility is important), while Microsoft always wants to select a different technology from its rival. Describe the equilibrium of this game.16-3 House Closing You’ve entered into a contract to purchase a new house, and the closing is scheduled for next week. It’s typical for some last-minute bargaining to occur at the closing table, where sellers often try to tack on extra fees. You have three options for the closing: (1) attend yourself, (2) send an attorney authorized to close only per the previously negotiated terms, or (3) pre-sign all the closing documents per the current terms and not attend the closing. Which of these would be most advantageous from a bargaining position?16-4 A City and Its UnionsRobert G. Flanders Jr., the state-appointed receiver for Central Falls, RI, said his city’s declaration of bankruptcy had proved invaluable in helping it cut costs. Before the city declared bankruptcy, he said, he had found it impossible to wring meaningful concessions out of the city’s unions and retirees who were being asked to give up roughly half of the pensions they had earned as the city ran out of cash. Why does bankruptcy give the city bargaining power against its unions? 12-1 Parking Lot OptimizationSuppose your elasticity of demand for your parking lot spaces is -2, and your price is $8 per day.  If your MC is zero, and your capacity is 80% full at 9:00 A.M. over the last month, are you optimizing?  Why or why not? 12-4 Macintosh versus iPhoneWhen the Macintosh computer was introduced in 1982, Apple made it difficult for third party software developers to develop software for the platform. In contrast, Apple made it relatively easy for third party developers to make applications that ran on the iPhone when it was introduced in 2007. Compare and contrast these two strategies. 12-5 Concert PricesConcert prices have increased coincidentally with illegal downloading of music off the Internet. Why?