16 Questions
What is the concept of marginal analysis based on?
Incremental changes in production
What is the primary consideration for making economic decisions?
Comparing marginal benefits and marginal costs
What is the focus of the 'Market Analysis' topic?
Demand and Supply
What is the title of the main textbook used in this course?
Managerial Economics and Business Strategy
What is the purpose of using information from popular business press?
To provide real-world examples
Where can students find course materials?
On sakai (sakai.ug.edu.gh)
What is the main reason for Lakenham Creamery's plan to expand its Norfolk County ice cream selections?
Increased demand for organic dairy products
What is the source of the milk and cream used in Lakenham Creamery's new organic ice cream?
Imported Guernsey milk and cream
What is the reason for Lakenham Creamery's current inability to produce the new ice cream selections?
Inadequate workforce
What was the impact of the weather conditions on Guernsey Diary?
Suspended production of organic milk
Why did Mary Hatchins ask Nigel to postpone the company's plans to increase the workforce?
Because of the reduction in cattle feed
What is the primary reason managers need to understand supply and demand?
To build their own strategies and respond to the actions of their competitors
What is the law of demand?
The quantity of a good consumers are willing and able to purchase increases as the price falls
What is the substitution effect in the law of demand?
When the price of a good falls, the good becomes cheaper relative to other goods
What is individual demand?
A schedule that shows the quantities of a commodity the consumer is willing and able to buy at various prices
Why do consumers buy less of a good at a higher price?
Due to the substitution effect
Study Notes
Time Value of Money
- Recognize the importance of time value of money in economic decisions.
Marginal Analysis
- Marginal analysis involves making economic decisions based on small, incremental changes in production or consumption.
- Compare marginal benefits and marginal costs to make decisions.
Demand and Supply
- Demand and supply are essential components of market analysis.
- Market equilibrium is the point where demand and supply intersect.
- Changes in demand and supply can affect market equilibrium.
Course Materials
- The main textbook for the course is "Baye & Prince Managerial Economics and Business Strategy", 8th edition.
- Additional materials will include articles from popular business press sources such as BBC Business News, The Economist, Wall Street Journal, and Business and Financial Times Ghana.
Organization
- All course information is available on the syllabus.
- Course materials will be available on Sakai (sakai.ug.edu.gh).
Guernsey Organic Milk Production
- Lakenham Creamery, a small company, plans to expand its ice cream selections by introducing organic ice cream made from Guernsey milk and cream.
- The company needs to increase its workforce by 25% to meet the new production demands.
- However, Guernsey Diary, the primary dairy producer, has suspended its production of organic milk due to weather conditions, prompting the company to reconsider its plans.
Importance of Supply and Demand
- Managers need to understand supply and demand to build their own strategies and respond to competitors.
- Managers must understand how government policy affects supply and demand.
Demand
- Individual demand is a schedule that shows the quantities of a commodity a consumer is willing and able to buy at various prices.
- The law of demand states that demand curves are downward-sloping, meaning that quantity demanded increases when the price falls and decreases when the price rises.
Law of Demand
- The law of demand holds because of the substitution effect and income effect.
- The substitution effect occurs when consumers switch to alternative goods or services when the price of a good increases.
- The income effect occurs when a change in price affects the consumer's purchasing power.
This quiz covers the concepts of time value of money, marginal analysis, and demand and supply in economics. It involves comparing marginal benefits and costs to make economic decisions.
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