Smoking Research Proposal Example | Topics and Well Written Essays - 1000 words

Smoking - Research Proposal Example This stage is called metastasis. On the contrary, in some cases cancer cells do not display uncontrolled growth, they are non-invasive and do not spread, such stage of cancer only forms benign tumors (Alberts et al, 2007). Numerous factors are responsible for the proliferation of cancer, these could be environmental factors- tobacco and alcohol consumption; obesity- sedentary life style and higher intake of calorific fast food may lead to the trigger of cancer genes (Bassen- Engguist, 2011), pollution, obnoxious agents with carbon particles including polycyclic aromatic hydrocarbons from the industries releases toxic chemicals may act as carcinogens; heredity factors, radiation hazards, by viruses, food items, pesticides and other organophosphorous compounds and cosmetic agents may act as carcinogenic agents (Irigaray, 2007). The present research proposal is to highlight the significance of smoking in treating cancer. Treatment of cancer involves chemotherapy and radiotherapy. However, studies reveal that investigative studies presents neurobiological, pharmacological implications of marijuana and its therapeutic propositions for HIV wasting, glaucoma and cancer chemotherapy ("American College of Physicians", 2008). However, an impediment to pursue research is attributed to the intricacies exhibited by the federal approval methodology, insufficient availability of research-level marijuana and disagreements over its legalization. Essentially, it is necessary for the physicians to realize the therapeutic implications of marijuana and encourage abusers co-operation in the management and cure of numerous disease conditions that are hard to cure because of extreme pain and the association of the underprivileged ("American College of Physicians", 2008). Marijuana, commonly identified as cannabis, comprises about 60 compounds unanimously described as cannabinoids. The foremost chemical component accountable for psychoactive

confounding factor or lurking variable

confounding factor or lurking variable Confounding variable, also known as confounding factor or lurking variable can be defined as an undesirable variable that has an influence on the relationship between the variables of an experiment. Although they are not the variable of actual interest (i.e. the independent variable), they can influence the outcome of an experiment and they are considered to be undesirable as they could add error to an experiment. A proper designed experiment should aim to decrease or control the influence of such confounding variables in order to avoid type 1 error; an error that raises a false positive conclusion that the independent variables have a casual relationship with the dependent variable. The relationship between the two observed variables is called a spurious relationship, hence a confounding variable is a threat to the validity of inferences made about cause and effect, i.e. the internal validity because the observed effect should be attributed to the independent variable rather than to the confounding variable. An example can be illustrated by the relationship between ice cream sales and drowning deaths. When these variables are entered into a statistical analysis, they may show a positive and potentially statistically significant correlation. However, it is a mistake to infer a causal relationship (i.e., ice cream causes drowning) because an important confounding variable which causes both ice cream sales and an increase in drowning deaths has not been accounted for: i.e. summertime. Although there is a body of literature of criteria for causality, Pearl claimed that confounding variables cannot be defined in terms of statistical notions alone; some causal assumptions are sometimes necessary. For example, when causal assumptions are being defined in the form of causal graphs, a simple criterion called backdoor will identify sets of confounding variables. Types of confounding variables Confounding variables may also be categorized according to their source: the choice of measurement instrument, situational characteristics, or inter-individual differences. Solution There are several ways to combat confounding variables in an experimental design by excluding or controlling it. Here is the following: Case control studies: by assigning the same confounding variables to both the experimental and control group can control for such confounder, for example, if the cause of multiple infarct dementia is being studied, age and sex could be the confounding variables, therefore these factors should be matched paired between the two participant groups. In addition, randomization is also another solution as having all confounding variables (whether known or unknown) will be equally distributed across all groups. Cohort studies: this is done by admitting a specific group of participants into the sampling population, for example a specific age range that may affect multiple infarct dementia, therefore only a certain group is chosen for the study design such as male aged 45-50 years old. This would limit the degree of matching between the groups and also cohorts can be comparable in regard to the possible confounding variable. Stratification: in the example of multiple infarct dementia study, physical activity is hypothesized to be a variable that can prevent this dementia from happening. With age as a possible confounder. The sampling data will then be stratified by age group so that the association between physical activity and dementia can be analyzed per age group. If different age group yields different risk ratios (this can be analyzed by statistical tools called Mantel-Haenszel methods), then age is seen as a confounding variable. Despite solutions for the controlling and limiting confounding variables, these strategies have limitations too. For example if a participant in the case-control study is a 47year old African-American from Alaska, avid tennis player, vegetarian, working as an engineer and suffer from multiple infarct dementia. Proper matching would require a person of the same characteristics but with the sole difference of being healthy. This is extremely difficult to achieve and there is a risk of over- or undermatching of the study population. Additionally, in a cohort study, too many people may be excluded with this criteria, and in stratification, single strata can get too narrow and contain only a small, non-significant number of samples. Randomization One of the most common reasons for the existence of confounding variable is when the experimental design does not randomly assign participants to groups or some types of individual difference such as ability, extroversion, height and weight. For example, studies involving a comparison between men and women are inherently plagued with confounding variables since the social environment for males and females is very different to start with. However, this does not mean that there is no value in gender comparison studies or other studies that does not employ random assignment but it implies that results interpretation should be done cautiously. In sum, random assignment is a useful and powerful tool in experimental design. Although it does not minimize the overall amount of extraneous variable in an experiment, it aims to equalize the error that may occur as a result of extraneous variable, therefore it can greatly decrease systematic error: error that varies within the independent variab le. Multivariate analyses Another method for controlling confounding variable is by the use of covariates in multivariate analyses. However, this only gives little information about the strength of the confounding variable compared to stratification methods. Furthermore, confounding variables are not always known or measurable which means residual confounding (term for incompletely controlled confounding) may appear. In an experimental design, covariate adjustment can help to reduce the noise in an outcome variation whilst enabling the manipulation effect to be performed. In sum, successful randomization can minimize confounding variables by bother measured and unmeasured factors, whereas statistical control addresses only confounding variables that have been measured and can introduce more confounding variables and other biases through inappropriate control. Mismeasurement and mis-specification Although it is important to spot confounding variables in a study there is often a risk of having a statistically controlled but imperfectly measured factor that may confound an association of the variables. This is termed residual confounding which describes the mismeasurement and an example is given to illustrate this. In a study example, it was found that people with higher rate of vacation is correlated with lower risk of mortality. Several explanations can account for this as vacation mitigates stress, diminishes anger and encourage more exercise. On the other hand, healthier people might be more likely to travel so vacation may not be a genuine causal factor but only a marker of initial health status that naturally predicts longevity. Consequently, vacation may remain to be a significant predictor even after adjusting for baseline health status as the covariate. It is therefore easy to construct a series of potential confounders but many would lack plausibility. For example, pe ople with more friends may have more vacations and friend was indeed the predictor variable instead, low-stress working environment and wide range of food (I.e. completeness of diet) may all attribute to prolong life too. However, because plausibility is a highly subjective factor for considering whether enough potential founders are included. To identify confounders Priori knowledge of the likely causal pathways are required. The major drawback of this is that observational studies imply that the strength of any causal inference will depend on the biologic plausibility of the putative factor, and the implausibility of uncontrolled potential confounders. In addition, observations contain some judgmental component which varies from experimenters. For example, vacation may prolong longevity because sick people tend to travel less, to deal with this. Measurements of participants initial health may be used as an adjustment but this however cannot be assessed without error. Moreover, hea lth can be measured in so many different ways and not all can be included and controlled for. This raises more and more questions such as: can the use of initial stress test be used to capture aspects of health confounded by vacation? Is body mass index relevant? Consequently, even if the optimal measure of confounder is used it is measured with error and adjustment for it may not eliminate the effects of vacations. From the statistical analysis perspective, poorly measured confounding variables causes more problems as its effect may not be linear, by assuming linearity on the outcome as specified by the model by entering confounding variables as a covariate in standard regression models may not fully adjust for the confounder effects are not linear on that scale. Mediators and confounders There is a common conflict that different causal explanations can be possible when adjustment is used to reduce or eliminate the predictive power of the independent variable. For example, a confounding variable may sometimes be a marker of some causal factors but it is not directly involved in the causal chain from one variable to another and there is a problem of over-adjustment. Considering an example on the hypothesis that high blood pressure (BP) reaction to stress causes Hypertension. To test this hypothesis, a longitudinal study should be conducted where BP reactivity and resting BP levels of a large group of participants should be measured. Result findings should report that excessive reactivity to be the risk factor for later hypertension but the problem is reactivity may just be a marker for elevated BP resting level and it is not important per se. consistent with this problem, those participants with higher resting BP may correlate with high BP reactivity scores. To control for the current confounding variable, the initial resting BP levels should be adjusted by regression analysis which llustrates whether BP reactivity is attributed to any predictive information beside just the initial resting BP level. This may show that reactivity is no longer a very predictive factor and most of the variation in the follow-up BP levels may be accounted for by the initial resting levels. However, this does not mean that reactivity is not causally related to future BP status, i.e. if increased reactivity preceded initial increase in resting BP level, it could also be responsible in part for the initial increase in resting BP level. This is a situation whereby a single variable may have both confounding and mediating roles simultaneously. The example of vacation and mortality is used to illustrate this: assuming that people who go on more vacations are less likely to die over a 5-year longitudinal study, including a factor: initial health status in the regression mod el could eliminate this association. Alternatively, if people in poor health take fewer vacations then this elimination may reflect the removal of a confounding variable by health status. However, if the participants tendencies to go on vacation are constant over the 5 year period then health status will reflect the cumulative health impact of a lifetimes vacation habits. This shows that health status will contribute partly as a mediator of vacationing effects. This confusion between a mediator and a confounder will be less apparent if the risk factor is not stable over time. For example if the participant has only just started having vacations, then these will not be reflected in the initial health status and may have higher opportunity to predict subsequent health with initial health status as a covariate in the analysis. However, if these changes become out of control, it can create a quasi-experimental design. For example, if people take vacations due to change in their company policy rather than the reason of making friends or have spare time, and other group have less vacation for the same reason. Then in this case, it is possible to assess the effect of vacation independently of initial health status. In sum, indiscriminate adjustment of covariates may result in erroneous conclusions and many socialdemographic variables can be mediated by other factors such as low income, unfulfilling jobs, no friends etc. moreover, there may also be other intermediate variables like self-determinations and release of stress hormones that may affect the results. Considering the wide range of variables listed, any inaccurate measures of them may lead to a reduction or elimination of predictive power. Moreover, by controlling a mediator may produce further confounding variables, which will then increase or decrease the associations of the independent and dependent measures. Furthermore, it may even create a new spurious association when in fact no effect is present. In sum, despite the number of limitations discussed in this critical review, they have an important role in behavioural research as randomized trials are sometimes found to be impractical and unethical. In spite of the hazardous statistical control of confounding variables will gain insight into special cautions in drawing conclusions and writing research in the future.

Christopher Columbus vs. Alvez Nunez Cabeza de Vaca Essay -- American

Christopher Columbus and Alvez Nunez Cabeza de Vaca were both explorers for Spain, but under different rulers and different times. The more famous, Christopher Columbus, came before de Vaca’s time. Columbus sailed a series of four voyages between 1492 and 1504 in search for a route to Asia which led accidentally to his discovery of new land inhabited with Indians. Christopher sailed under the Spanish monarchs, Ferdinand and Isabella for his journey to the â€Å"Indies,† whom he was loyal to by claiming everything in their name. De Vaca , followed in Christopher’s footsteps and journeyed to Hispanionola for Spain’s emperor, Charlves V, the grandson of Ferdinand and Isabella. Both, Columbus and de Vaca composed a series of letters addressing the main issue of their journey to the new land, but both were expressed in a different manner, included different material, and were motivated to write for dissimilar reasons. Columbus’ and de Vaca’s purposes to compose letters are quite divergent. Christopher Columbus’ main objective in his Letter to Ferdinand and Isabella Regarding the Fourth Voyage, was to list his unnoticed accomplishments, justly sufferings, and devotion in order for the monarchs to save him. He had his heart set on Ferdinand and Isabella’s pity to obtain their permission to go to Rome and other places of pilgrimage. In Columbus’ â€Å"Letter to Ferdinand and Isabella Regarding the Fourth Voyage,† Columbus had the intention to please his majesty by claiming his â€Å"[pure devot...

Samenvatting Managerial Economics

chapter 1. introduction to managerial economics 1. what is managerial economics? Managerial economics = the science of directing scarce resources to manage effectively > each needs to understand how they can influence the demand through price and advertising, what is the best organizational architecture and how to compete Differences between ‘new’ and ‘old’ economy * Network effects in demand = the benefit provided to any user depends on the total number of other users * Scalability = the degree to which the scale and scope of business can be increased without a corresponding increase in costs Public good = one person’s consumption does not reduce the quantity available to others Branches Managerial economics: * Competitive markets * Market power * Imperfect markets 2. preliminaries scope (omvang) Microeconomics = the study of individual economic behavior where resources are costly > how consumers respond to changes in prices and income, †¦ Manag erial economics more limited scope = it is the application of microeconomics to managerial issues Macroeconomics = focuses on aggregate economic variables considers economic aggregates directly rather than as the aggregation of individual consumers and businesses methodology Fundamental premise = individuals share common motivations that lead them to behave systematically in making economic choices > a person who faces the same choices at two different times will behave in the same way at both times > it is systematic so it can be studied Economic model = a concise description of behavior and outcomes = abstraction Models are constructed by inductive reasoning > afterwards, the model should be tested arginal vis-a-vis average Marginal value = the change in the variable associated with a unit increase in a driver Average value = total value of the variable divided by the total quantity of a driver > relation between the marginal and average values depends on whether the average value is decreasing, constant or increasing with respect to the driver Stocks and flows Stock = quantity at a specific point in time Flow = the change in a stock over some period of time > measured in units per time period other things equal = an approach to simplify the problem by analyzing each change separately, holding other things equal . timing Two types of models * Static models = describe behavior at a single point of time, disregard differences in the sequences of actions and payments > model of competitive markets, analysis of organizational architecture * Dynamic models = focus on the timing and sequence of actions and payments = receipts and expenditures often occur at different times discounting Investments = using resources at some times in order to receive benefits at other times > discount future values to that they can be compared with the present Net present value the sum of the discounted values of a series of inflows and outflows over time = represents the current val uation of a flow of dollars time Internal rate of return = alternative for the net present value without using the discount rate 4. organization organizational boundaries Vertical boundaries = delineates activities closer to or further from the end user Horizontal boundaries = defined by its scale and scope of operations * Scale = rate of production or delivery of a good or service * Scope = refers to the range of different items produced or delivered individual behavior businesses are managed by individuals and their interests may diverge from those of the organization > managers are subject to bounded rationality Standard assumption = people make decisions rationally = individuals choose the alternative that gives them the greatest difference between value and cost > their behavior will follow some predictable patterns based on what they judge to be in their best interest People do not always behave rationally > reason: bounded rationality = people have limited cognitive bilities and cannot fully exercise self-control = people adopt simplified rules for decision-making * Separate accounting for different categories of benefits and cost * Lack self-control = addictive behavior and difficulty postponing immediate gratification for longer-term benefits. * More sensitive to loss than to gain = risk averse * Decisions may depend on how choices are framed Two implications: * Individuals will be relatively sluggish in responding to changes in business and economic conditions * Role for managerial economics is larger . markets Market = consists of the buyers and sellers that communicate with one another for voluntary exchange > not limited to any physical structure of particular location * Markets for consumer products = buyers are households and sellers are businesses * Markets for industrial products = buyers and sellers are businesses * Markets for human resources = buyers are businesses and sellers are households Industry = businesses engaged in the production o f delivery of the same or similar items competitive markets = markets with many buyers and many sellers Buyers provide the demand and sellers provide the supply demand-supply model = describes the systematic effect of changes in prices and other economic variables on buyers and sellers >describes the interaction of these choices market power Key variables: * Prices * Scale of operations * Input mix = determined by market forces Market power = ability of a buyer or seller to influence market conditions A business with market power must determine its horizontal boundaries = depends on how its costs vary with the scale and scope of operations Four key tools in managing demand: 1. Price 2. Advertising 3.Policy toward competitors 4. R&D expenditure Imperfect markets Imperfect Market = when one party directly conveys a benefit or cost to others and where one party has better information than others > managers need to resolve the imperfection 6. global integration Price in one local market will be independent of prices in other local markets > some markets are global because the costs of communication and trade are relatively low = the prince in one place will move together with the prices elsewhere > whether a market is local or global, same managerial economics principles ommunications costs and trade = with developments in technology and deregulation Transport: * air transport liberalization * containerization of surface transport. Telecommunications: * de-regulation. * scale economies in bandwidth. Growth of cross-border trade and investment: * falling trade barriers. * falling financial barriers. * falling communications cost managers have to pay increasing attention to markets in other places outsoarcing = the purchase of services or supplies from external sources > external sources could be within the same country or foreign E-commerce Limitations: * Payments system Trade barriers * Shipment costs part 1: competitive markets chapter 2. demand 2. individual dem and Individual demand curve = a graph that shows the quantity that the buyer will purchase at every possible price construction = other things equal, how many would you buy at a price of – – ? > important to keep other things equal there the decision may depend on other factors * Vertical axis is the price * Horizontal axis is the quantity Two views: * For every possible price, demand curve shows the quantity demanded * For each unit of item, demand curve shows the maximum price that the buyer is willing to pay slope at a lower price, buyers are willing to buy a larger quantity Marginal benefit = the benefit provided by an additional unit of the item Diminishing marginal benefit = each additional unit of consumption or usage provides less benefit than the preceding unit > the price that an individual is willing to pay will decrease with the quantity purchased preferences Two implications: * The demand curve will change with changes in the consumer’s preferences * Different consumers may have different preferences and hence different demand curves 3. emand and income Demand curve does not explicitly display the effect of changes in income and other factors that affect demand income changes = effect of a change in income on the demand curve is very different from that of a change in price > if income drops = demand curve shifts to the left * Change in price = movement along the demand curve * Change in income or any factor other than the price = shift in the entire demand curve normal vis-a-vis inferior products Normal product = positively related to changes in the buyer’s income Inferior product negatively related to changes in the buyer’s income >demand falls as the buyer’s income increases Broad categories of products = tend to be normal Particular products within the categories = may be inferior 4. other factors in demand = prices of related products, advertising, durability, season, weather and location complements and substitutes Complements = if an increase in the price of one causes the demand for the other to fall Substitutes = if an increase in the price of one causes the demand for the other to increaseShift to the left: * Increase in the price of a complement * Fall in the price of a substitute Shift to the right * Increase in the price of a substitute * Fall in the price of a complement advertising Informative advertising = communicates information to potential buyers and sellers Persuasive advertising = aims to influence consumer choice An increase in advertising expenditure will increase demand > each additional dollar spent on advertising has a relatively smaller effect on demand = diminishing marginal productEffect of advertising on demand depends on the medium durable goods = provide a stream of services over an extended period of time > buyers have discretion over the timing of purchase Three significant factors for demand: 1. Expectations about future prices and incomes 2. Inter est rates = many buyers need to finance their purchase of durable goods > if interest rates are low the demand for durables will be higher 3. Price of used models = substitutes of a new model 5. market demand Market demand curve graph that shows the quantity that all buyers will purchase at every possible price = analysis is essentially similar to that for an individual demand curve construction = interview all the potential consumers and ask each person the quantity that he er she would buy at every possible price = horizontal summation of the individual demand curves = slopes downwards since the individual demand curves slope downwards other factors = buyers’ income, price of related products, advertising > changes in these factors will shift the entire market demand curveTwo ways of measuring income of country: * The gross national product (GNP) = GDP + net income from foreign sources * The gross domestic product (GDP) = measure the total amount produced in a country for a given year Macro factors: * Income = average, distribution * Demographic = population, age structure, urban-rural * Cultural-social income distribution = the more uneven the distribution of income, the more important it is to consider the actual distribution of in income and not merely the average income when estimating the market demand 6. buyer surplus benefit Marginal benefit maximum amount of money that the buyer is willing to pay for the unit Total benefit = benefit yielded by all the units that the buyer purchases benefit vias-a-vis price Buyer surplus = difference between a buyer’s total benefit from some quantity of purchase and the actual expenditure > a buyer must get some surplus, otherwise he or she will not buy = maximum that a seller can charge is the buyer’s total benefit price changes Gains from a pricecut: * Lower price on the quantity that she would have purchased at the original price = infra marginal units She can buy more = marginal units > extent depends on the buyer’s response to the price reduction = the greater the increase in purchase, the larger the buyer’s gain from the price reduction = when you have to calculate how much you gain from a price cut, always look at the demand curve and see how much you buy at the old price and how much at the new price and calculate the buyers surplus package deals and two-part pricing Package deals = charge buyer just a little less than her/his total benefit = leave buyer with almost zero surplusTwo-art pricing = pricing scheme comprising a fixed payment and a charge based on usage = enables to soak up most of the consumer’s buyer surplus Market buyer surplus = sum of individual buyer surpluses 7. business demand inputs Businesses do not purchase goods and services for their own sake > use them as inputs in the production of other goods and services = use inputs to produce outputs for sale to consumers or other businesses * finished/semi-finished components â€⠀œ. * raw materials and energy. * labor and other services. capital. Demand Demand for inputs depend on: * quantity of final output = shift of the entire demand curve * prices of complements or substitutes in production Marginal benefit = the increase in revenue arising from an additional unit of the input > diminishing marginal benefit = downward sloping demand curve for inputs chapter 3. elasticity 1. introduction Elesticity of demand = measures the responsiveness of demand to changes in an underlying factor (price, income, advertising) Own-price elasticity of demand measures the responsiveness of the quantity demanded to changes in the price of the item 2. own-price elasticity = percentage by which the quantity demanded will change if the price of the item rises by 1% Percentage change in quantity demanded Percentage change in price construction Two ways of deriving: * arc approach = we collect records of a price change and the corresponding change in quantity demanded > own-pric e elasticity as the ratio of the proportionate change in quantity demanded to the proportionate change in price can also be calculated by changing p0 by the average price ((old price + new price)/2) and by changing q0 by the average quantity ((old quantity + new quantity)/2) * point approach = can be derived from the coefficient of price in the equation = calculates the elasticity at a specific point on the demand curve – arc approach: elasticity between two points properties Characteristics: * It’s a negative number * A pure number, independent of units of measure * Ranges from 0 to negative infinity Price elastic if a 1% increase in price leads to more than a 1% drop in quantity demand = if a price increase causes a proportionately larger drop in quantity demanded Price inelastic = if a 1% price increase causes less than 1% drop in quantity demand intuitive factors Availability of direct or indirect substitutes = the fewer substitutes that are available, the less ela stic will be the demand > Demand for a product category will be relatively less elastic than demand for specific products within the category = there are fewer substitutes for the category than for specific products Buyer’s prior commitments Learning * Complementary purchases (spare parts, upgrades, †¦) * Taste = demand less elastic Benefits/costs of economizing = buyers have limited time to spend on searching for better prices > they focus attention on items that account for relatively larger expenditures > separation of buyer and payee elasticity and slope Own price elasticity = describes the shape of only one portion of the demand curve > a change in price, by moving from one part of a demand curve to another part, may lead to a change in own-price elasticity Straight line demand curve demand becomes more elastic at higher prices > incase of other shapes, demand may become less elastic at higher prices Steeper demand curve means demand less elastic = but elasticity is not the same as the slope > slope stays the same, the own-price elasticity varies throughout the length causes by the changes in price and quantity Own-price elasticity can also vary with changes in any of the other factors that affect demand = in that case, demand curve will shift > own-price elasticity may also change 3. forecasting quantity demanded and expenditure expenditure change in price will affect expenditure through the price itself as well as through the related effect on quantity demanded Change in quantity demanded = price elasticity x change in price If demand elastic, price increase leads to * proportionately greater reduction in purchases. * lower expenditure. If demand inelastic, price increase leads to * proportionately smaller reduction in purchases. * higher expenditure. accuracy Discrepancy = the own-price elasticity may vary along a demand curve > the forecast using the own-price elasticity will not be as precise as a forecast directly from the demand curve . other elasticities income elasticity = measures the sensitivity of demand to changes in buyers’ income = percentage by which the demand will change if the buyer’s income rises by 1 % Percentage change in demand percentage change in income = varies with changes in the price and any other factor that affects demand * Depending on whether the product is normal or inferior, income elasticity can be positive or negative * Demand for necessities tends to be relatively less income elastic than the demand for discretionary items cross-price elasticity measures the sensitivity of demand to changes in the prices of related products = percentage by which the demand will change if the price of the other item rises by 1%, other things equal Substitutes = an increase in the price of one will increase the demand for the other = cross-price elasticity positive Complements = an increase in the price of one will reduce the demand for the other = cross-price elasticity negative advertis ing elasticity measures the sensitivity of demand to changes in the sellers’ advertising expenditure = percentage by which the demand will change if the sellers’ advertising expenditure rises by 1%, other things equal > price of the item must remain unchanged > has a much stronger effect on the sales of an individual seller than on the market demand = advertising elasticity of the demand faced by an individual seller tends to be larger than the advertising elasticity of the market demand forecasting the effects of multiple factorsOnly way to discern the net effect of factors pushing in different directions = use the elasticities with respect to each of the variables Percentage change in demand due to changes in multiple factors is the sum of the percentage changes due to each separate factor 5. adjustment time The short run = a time horizon within which a buyer cannot adjust at least one item of consumption or usage The long run = a time horizon long enough for buyers to adjust all items of consumption of usage nondurables the longer the time that buyers have to adjust, the bigger will be the response to a price change > demand for such items will be more elastic in the long run than in the short run Alcohol and tabacco = demand relatively inelastic > discouraging new people from taking up smoking and drinking = demand relatively more elastic in the long run durables = a countervailing effect leads demand to be relatively more elastic in the short run > especially strong for changes in income = drop in income will cause demand to fall more sharply in the short run than in the long runDifference between short- and long-run elasticities = depends on a balance between the need for time to adjust and the replacement frequency effect 6. estimating elasticities data Two sources of data: * Records of pas experiences * Surveys and experiments specifically designed to discover buyers’ preferences > test market Collection in two ways: * Focus on a p articular group of buyers and observe how their demand changes as the factors affecting demand vary over time = time series Compare the quantities purchased in markets with different values of the factors affecting demand = cross section specification To obtain accurate estimates of elasticities = specify all the factors that have a significant effect on demand > specify the mathematical relationship between demand and the various factors Dependent variable = whose changes are to be explained Independent variable = a factor affecting the dependent variable = linear equation in which the dependent variable is equal to a constant plus the weighted sum of the independent variables ultiple regression = can estimate the separate effect of each independent variable on the dependent variable = aims to determine values for the constant and the coefficients Residual = the actual value of the dependent variable minus the predicted value Method of least squares = based on the view that positiv e residuals are as bad as negative residuals while large residuals are disproportionately bad > seeks a set of estimates for the constant and the coefficients to minimize the sum of the squares of the residuals since equally large positive and negative residuals have identical squares, the method treats them identically statistical significance F statistic = measures the overall significance of the independent variables > assumption that there are is no relationship between the dependent variable and the set of independent variables > ranges from 0 to infinity R? = uses the squared residuals to measure the extent to which the independent variables account for the variation of the dependent variable > ranges from 0 to 1 1 means that all the residuals are exactly 0 T-statistic = used to evaluate the significance of a particular independent variable = estimated value of the coefficient divided by the standard error > ranges from negative to positive infinity P value = measures the like lihood that estimated coefficient could be the result of chance under the assumption that the true coefficient is zero = gives the probability that random sampling errors could produce a coefficient as large as found by the least-squares multiple regression model chapter 4. supply . short-run costs Two key decisions: * Continue in operation * Rate at which to operate = depend on the length of the time horizon Short run = time horizon in which a seller cannot adjust at least one input > business must work within the constraints of past commitments Long run = time horizon long enough for the seller to adjust all inputs Difference between both depends on the circumstances fixed vis-a-vis variable costs Fixed cost = cost of inputs that do not change with the production rate > the height of the total cost curve at the zero production rate Variable cost cost of inputs that change with the production rate > to distinguish between fixed and variable costs, a business must analyze how each c ategory of expense varies with changes in the scale of operation Total cost = the sum of fixed cost and variable cost C = F + V Marginal cost = the change in total cost due to the production of an additional unit Average cost = total cost divided by the production rate = unit cost Cq = Fq + Vq > continues to fall with increases in the production rate until it reaches a minimum, thereafter it increases with the production rate the average cost is the average fixed cost plus the average variable cost > if the production rate is higher the fixed cost will be spread over more units Marginal product = increase in output arising from an additional unit of an input > diminishing = the average variable cost will increase with the production rate Where the average variable cost is increasing the relationship between the average cost and the production rate depends on the balance between the declining average fixed cost and the increasing average cost Diminishing marginal product causes margi nal and average cost to rise echnology Two implications: * The curves will change with adjustments in the seller’s technology * Different sellers may have different technologies and hence different cost curves 3. short-run individual supply Assumptions * profit maximization * Business is so small relative to the market that it can sell as much as it would like at the going market price production rate Total revenue = price multiplied by sales Marginal revenue = the change in total revenue arising from selling an additional unit To maximize profit, a business should produce at that rate where its marginal revenue equals its marginal costMarginal revenue is represented by the slope of the total revenue line * Wherever the marginal revenue exceeds the marginal cost, the profit can be raised by increasing production * Wherever the marginal revenue is less than the marginal cost, Luna can raise profit by reducing production break even To decide whether to continue production, the business needs to compare the profit from continuing in production with the profit of shutting down Fixed cost = sunk cost = it has been committed and cannot be avoided > even if the business shuts down, it must still pay the fixed cost F Business should continue production whenR – V – F > – F = R > V P > V/q > R = p x q = short-run break even condition > a business maximizes profit by producing at the rate where the marginal cost equals the price, provided that the price covers the average variable cost individual supply curve Individual supply curve = a graph showing the quantity that one seller will supply at every possible price > for every possible price, a business should produce at the rate that balances it marginal cost with the price Slopes upward = if the seller is to expand production, then it will incur a higher marginal cost Input demandChange in input price: * Shift in marginal cost * Change in profit-maximizing production 4. long-run individual su pply = contracts expire and investments wear out > all inputs become avoidable long-run costs = long-run average cost curve is lower and has a gentler slope > in the long run, the seller has more flexibility in adjusting inputs to changes in the production rate = it can produce at a relatively lower cost than in the short run, when one or more inputs cannot be changed production rate = a rate where its marginal cost equals the price of its output reak even = in the long run, a business should continue in production if the maximum profit from continuing in production is at least as large as the profit from shutting down All costs are avoidable = it the business shuts down, it will incur no costs and so its profit from shutting down is nothing R > C P > C/q = business should continue in production so long as total revenue covers total cost individual supply curve = that part of its long-run marginal cost curve, which lies above its long-run average cost curve Two views: * For every po ssible price, it shows the production rate For each unit of item, it shows the minimum price that the seller is willing to accept 5. market supply Market supply curve = a graph showing the quantity that the market will supply at every possible price = sum of the quantities supplied by each individual seller short run Market supply curve = begins with the seller that has the lowest average variable cost Change in an input price will affect the seller’s marginal cost at all production levels > shift the entire market supply curve * Increase in price of an input will shift the market supply up * Reduction in price of an input will shift the market supply down long run every business will have completely flexibility in deciding on inputs and production > freedom of entry and exit is the key difference between the short run and long run Sellers that cannot cover their total costs will leave the industry until all the remaining sellers break even > an industry where businesses van make profits will attract new entrants = market supply will rise and pushes down the market price hence the profit will drop Quantity supplied will adjust in two ways when there’s a change in price: * All existing sellers will adjust their quantities supplied along their individual supply curves * Some sellers may enter or leave the market Graph = slope is more gentler and may be flat 6. seller surplus price vis-a-vis marginal cost Seller surplus difference between a seller’s revenue from some quantity of production and the minimum amount necessary to induce the seller to produce that quantity > short-run seller surplus can also be defined as the difference between the seller’s revenue and the variable cost Short-run seller surplus = total revenue less variable cost Long-run seller surplus = total revenue less total cost purchasing = a buyer can apply the concept of seller surplus to reduce the cost of its purchases market seller surplus = sum of the individual seller surpluses = difference between the market revenue from some production rate and the minimum amount necessary for the market to produce that quantity 7. elasticity of supply measures the responsiveness of supply to changes in underlying factors such as the price of the item and inputs price elasticity = measures the responsiveness of the quantity supplied to changes in the price of the item = percentage by which the quantity supplied will change if the price of the item rises by 1%, other things equal Percentage change in quantity supplied Percentage change in price properties * Pure number * Positive number intuitive factors Intuitive factors: * Capacity utilization > a seller that has consiverable excess capacity will step up production in response to even a small increase in price = individual supply will be relatively elastic * Adjustment time long-run supply is relatively more elastic than the short-run supply chapter 5. competitive markets 2. perfect competition Five con ditions: 1. The product is homogeneous 2. There are many buyers, each of whom purchases a quantity that is small relative to the market 3. There many sellers, each of whom supplies a quantity that is small relative to the market 4. New buyers and sellers can enter freely, and existing buyers and sellers can exit freely 5. All buyers and sellers have symmetric information about market conditions homogeneous product = the product is always the same > competition is stronger many small buyers = no buyer can get a lower price than others > all buyers face the same price all buyers compete on the same level playing field When some buyers have market power it is not possible to construct a market demand curve many small sellers = no seller has market power > no seller can get a higher price than other free entry and exit = no technological, legal or regulatory barriers constrain entry or exit > the market price cannot stay above a seller’s average cost for very long > degree of com petition also depends on barriers to exit = it must consider the exit cost when deciding whether to enter the market symmetric information = no seller can enjoy the privilege of secret information 3. market equilibrium the price at which the quantity demanded equals the quantity supplied > when market out of equilibrium, market forces pushes price towards equilibrium demand and supply At the market equilibrium, there is no tendency for price, purchases or sales to change excess supply Not in equilibrium = market price will tend to change in such a way as to restore equilibrium Excess supply = the amount by which the quantity supplied exceeds the quantity demanded > suppliers would compete to clear their extra capacity and the market price would drop back toward the equilibrium excess demand = the amount by which the quantity demanded exceeds the quantity supplied > when the price is below the equilibrium level buyers would compete for the limited capacity significance of equilibrium Two reasons: * If a market is not in equilibrium, either buyers or sellers will push the market toward equilibrium * By comparing equilibria we can address a wide range of questions > when prices are quite flexible, the market will adjust to the new equilibrium fairly quickly, so comparing equilibria is a fairly accurate method of analysis Neither buyers nor sellers may face rationing 4. supply shift equilibrium change When price of input falls >entire supply curve shifts down = at every possible sellers want to supply more price elasticitiesDownward or upward shift in the supply curve will change the equilibrium price by no more than the amount of the supply shift > change in equilibrium price depends on the price elasticities of demand and supply Inelastic demand = buyers are completely insensitive to the price > when supply curve shifts, the buyers do not change their behavior = they continue to purchase exactly the same quantity Elastic demand = buyers are extremely sensitive t o price > equilibrium price does not change at all If the demand is more elastic then the change in the equilibrium price result from a shift in supply will be smaller Inelastic supply = sellers are completely insensitive to the price > if their costs change they will not change the quantity supplied Elastic supply if the cost of an input changes, the marginal cost changes by the same amount at all production levels common misconception = if sellers’ costs fall by some amount, then the market price will fall by the same amount Overlooks the impact of: * The shift in supply on buyers = if they are very sensitive to price, the shift in supply would result in no change to the equilibrium price * The price sensitivity of sellers = if sellers are insensitive to price, then the drop in cost will not induce them to sell more Price change * Smaller if demand is more elastic than supply * Bigger if supply is more elastic than demand 5. demand shiftDemand shifts down (left) > new equil ibrium with lower price and lower quantity Demand shifts up (right) > new equilibrium with higher price and higher quantity 6. adjustment time short-run equilibrium = point where its short-run marginal cost equals the marketprice long-run equilibrium = the point where its long-run marginal cost equals the market price demand increase Short-run equilibrium = the extent to which a seller expands its operations depends on the slope of its short-run marginal cost curve > if steep then the price increase will not lead the seller to expand operations by very much Long-run equilibrium = there is enough time for all costs to become avoidable, for new sellers to enter the market and for existing sellers to leaveThe increase in demand raises the market price and hence each seller’s profit = will attract new sellers to enter the market Although the price is higher than in the original equilibrium, higher input prices result in higher marginal and average cost curves > in the new long-ru n equilibrium, each individual seller just breaks even demand reduction Extent of cutback depends on two factors: * Extent of sunk costs = in an industry involving substantial sunk costs, the reduction in demand will translate into a relatively large drop in price and a small reduction in quantity * Slope of the seller’s short-run marginal cost curve in the new long-run equilibrium there will be a smaller number of sellers and each will exactly break even with average total costs equal to the market price price and quantity over time Two general points: * In response to shifts in demand = market price will be more volatile in the short run than the long run * In response to shifts in demand = there is a greater change in the market quantity over the long run than in the hort run In industries with substantial sunk costs the adjustment of production will be concentrated in the long run In industries where costs are minor the adjustment to shifts in demand will be relatively sm oother > the market price will be relatively less volatile chapter 6. conomic efficiency 2. conditions for economic efficiency Economically efficient = if no reallocation of resources can make one person better off without making another person worse off > persons may be human beings or businesses sufficient conditions Three sufficient conditions based on users’ benefits and supplier’s costs 1. All users achieve the same marginal benefit 2. All suppliers operate at the same marginal cost 3. Every user’s marginal benefit is equal to every supplier’s marginal cost Equal marginal benefit If not equal: * Provide more to user with higher marginal benefit * Take away from user with lower marginal benefit society as a whole would be better off Equal marginal cost If not equal: * Supplier with lower marginal cost should produce more * Supplier with higher marginal cost should produce less Marginal benefit equals marginal cost If not equal: * If MO > MC , produce more of the item * If MO < MC, produce less of the item philosophical basis Technical efficiency = providing an item at the minimum possible cost > does not imply that scarce resources are being well used The concept of economic efficiency extends beyond technical efficiency Economic efficiency assesses resource allocations in terms of each individual user’s evaluation of the benefit internal organization production will be efficient if all users achieve the same marginal benefit, all suppliers operate at the same marginal cost and every user’s marginal benefit balances every supplier’s marginal cost 3. adam smith’s invisible hand Invisible hand = market price guides buyers and sellers, acting independently and selfishly to channel scarce resources into economically efficient uses competitive market = satisfies all three requirements for economic efficiency market system = an economic system in which resources are allocated through the independent decisio ns of buyers and sellers, guided by freely moving prices Price performs two roles: * It communicates all the necessary information It provides a concrete incentive for each buyer to purchase the quantity that balances marginal benefit with the market price > it provides a concrete incentive for every seller to supply the quantity that balances marginal cost with the market price 4. decentralized management internal market Transfer price = price charged for the sale of an item within an organization > should set it equal to market price = by decentralizing the management is establishing an internal market that is integrated with the external market implementation Two general rules: * If there is a competitive market for the item, the transfer price should be set equal to the market price * Producing units should be allowed to sell the product outside buyers and consuming units should be allowed to buy the product from external sources Outsoarcing = purchase of services or supplies fr om external sourcesAny organization that used resources or products for which there are competitive markets can apply decentralization to achieve internal economic efficiency 5 incidence = both pricing methods have exactly the same impact on the manufacturer and customer freight inclusive pricing Cost and freight = a price that includes freight Ex-works pricing = does not include the freight cost > entire supply supply curve will shift down = with ex-works demand, the buyers will now have to pay the freight cost > price is lower = total price is equal if you increase the price with the freight cost Price and sales are the same whether the sellers do or do not include the freight cost in their prices incidence the change in the price for a buyer or seller resulting from a shift in demand or supply > whether manufacturers set prices that do or do not include the feight cost, the incidence is the same = the incidence does not depend on which side initially pays the freight cost > depen ds only on the price elasticities of demand and supply taxes = government depend on tax revenues to support public services such as national defense, †¦ > some are levied on consumers, others on businesses buyer’s vis-a-vis seller’s price Seller’s price = buyer’s price – tax Buyer’s price = price that buyers pay Seller’s price = price that sellers receive > p156 tax incidence buyer’s price will rise by less than the amount of the tax and the seller’s price will drop by less than the amount of the tax > tax is generally shared between buyers and sellers according to their relatively price elasticities * Less sensitive = will bear the relatively larger portion of the tax part II market power chapter 7. costs 2. economies of scale = analyze how costs depend on the scale or rate of production > decision on scale also depends on market demand and competition Fixed cost = cost of inputs that do not change with the product ion rate Variable cost = cost of inputs that change with the production rate marginal and average costsMarginal cost = rate of change of the variable cost > if average variable cost remains constant, then the marginal cost will be the same Economies of scale = increasing returns to scale = a business for which the average cost decreases with the scale of production > marginal cost will be lower than the average cost = since the marginal unit of production costs less than the average, any increase in production will reduce the average intuitive factors Two possible sources: * Substantial fixed inputs = at a larger scale, the cost of the fixed inputs will be spread over more units of production business with a strong element of composition, design or invention * If the average variable cost falls with the scale of production = whether the average variable cost increases or falls depends on the particular technology of the business diseconomies of scale = a business where the average c ost increases with the scale of production If: * Fixed cost is not substantial * And variable cost rises more than proportionately with the scale of production strategic implications If economies of scope: * Large scale * Market concentrated, few suppliers * Monopoly and oligopoly If diseconomies of scope * Small scale * Market fragmented * Perfect competition 3. economies of scope if the total cost of production is lower when two products are produced together than when they are produced separately Diseconomies of scope = if the total cost of production is higher when two products are produced together joint cost = cost of inputs that do not change with the scope of production strategic implications Example: telecommunication and broadcasting Produce/deliver multiple products * Product mix * Brand extension Core competence = a generalized expertise in the design, production and marketing of products based on common or closely related technologies = joint cost diseconomies of scope = if the total cost of production is higher when the two items are produced together than when they are produced separately arise where the joint costs are not significant and making one product increases the cost of making the other in the same facility 4. experience curve Accumulated experience = matters in industries characterized by relatively short production runs and a relatively substantial input of human resources As engineers and workers gain experience in production, they become more proficient individually and as a team > they devise new ways to reduce cost, including better tools and more cost-effective procedures Experience curve = shows how the unit cost of production falls with cumulative production over time > Distinguish from economies of scope within one production period Conditions: Relatively large human resources input per unit of production * Relatively small production runs 5. opportunity cost = it is necessary to look beyond the conventional accounting statem ents Relevance = key principle = managers should consider only relevant costs and ignore others alternative courses of action = to evaluate a business > conventional income statement does not present the revenues and costs of the alternative courses of action = costs are actually higher because of the opportunity cost opportunity cost defined Opportunity cost = net revenue from the best alternative course of action uncovering relevant costs Two ways to uncover relevant costs: Consider the alternative courses of action * Use the concept of opportunity cost = both approaches lead to the same business decision Alternative courses of action and opportunity cists change with the circumstances and hence are more difficult to measure and verify opportunity cost of capital A business that is partly financed by debs will appear to be less profitable than an otherwise identical business that is completely financed by equity > equity capital is not costless! = it has an opportunity cost Econom ic value added = net operation profit after tax subject to adjustments for accounting conventions less a charge for the cost of capital they are less likely to be biased in favor of capitalintensive activities A complete measure of business e performance should take account of the opportunity cost of equity capital 6. transfer pricing Transfer price = transfer price of an internally produced input should be set equal to its marginal cost perfectly competitive market Transfer price = market price full capacity = marginal cost of the input is not well defined > transfer price should be set equal to the opportunity cost of the input which is the marginal benefit that the input provides to the current user = compare marginal benefit across internal users 7. sunk costs a cost that has been committed and so cannot be avoided > not relevant to business decisions alternative courses of action Depend on: * Prior commitments * Planning horizon Continue | Cancel | Cont. margin | $280,000 | $0 | Advert agency | $50,000 | $50,000 | Magazine | $250,000 | $50,000 | Profit | ($20,000) | ($100,000) | Continue | Cont. margin | $280,000 | Advert agency | $0 | Magazine | $200,000 | Profit | $80,000 | = only avoidable costs strategic implications = managers should ignore sunk costs and consider only avoidable costs > sunk costs are not relevant for pricing, investment, or any other business decision Two ways of dealing with sunk costs: Explicitly consider the alternative courses of action * Remove all sunk costs from the income statement = both approaches lead to the same business decision > it is easier to consider the alternative courses of action explicitly when multiple alternatives commitments and the planning horizon To identify sunk costs consider: * Past commitments * Planning horizon The longer the planning horizon, the more time there will be for past commitments to unwind and hence the greater will be management’s freedom of action Short-run planning horizon = so me sunk costs Long-run horizon = no sunk cost Sunk vis-a-vis fixed costs Fixed cost two different senses: A cost that cannot be avoided once incurred * A cost of inputs that do not change with the production rate = two types of costs have very different implications for business decisions Not all sunk costs are fixed = cost op public service employees is sunk, once they secure tenure. However, government could have hired only temporary workers (no sunk costs) 8. statistical methods multipple regression = to investigate the extent of fixed costs and economies of scale forecasting = to forecast the dependent variable when the independent variables take different values Other applications Investigate the presence of joint costs across two products hapter 8. Monopoly 1. Introduction Monopoly = if there is only one seller in a market Monopsony = if there is only one buyer in a market 2. sources of market power = the barriers that deter or prevent entry by other competing sellers/buyers m onopoly Unique resource = access to unique physical, natural or human resources Intellectual property = property over inventions or expressions Patent = gives the owner an exclusive right to the invention for a specified period of time Copyright = establishes property in published expressions, including computer software and engineering drawings Economies of scale and scope Product differentiation differentiating itself from competitors > through product design, distribution, and advertising and promotion Regulation = government may decide to award an exclusive franchise to one provider > government hopes to avoid duplication and reduce the cost of the service monopsy = same factors as a monopoly Additional reason for presence = existence of a monopoly > a seller that has a monopoly over some good or service is also likely to have market power over the inputs into that item 3. Monopoly pricing Monopoly has to consider how its sales will affect the market price Given the market deman d curve a monopoly can Set the price and let the market determine how much it will buy * Decide how much to sell and let he market determine the price at which it is willing to buy that quantity Monopoly is choosing a combination of price and sales off the demand curve > a monopoly can set either the price or sales but not both revenue Inframarginal units = those other than the marginal unit Marginal revenue from selling an additional unit will be less than the price of that unit = marginal revenue is the price of the marginal unit minus the loss of revenue on the inframarginal units > difference between the price and the marginal revenue depends on the price elasticity * Demand elastic = seller need not reduce the price very much to increase sales > marginal revenue will be close to the price * Demand inelastic seller must reduce the price substantially to increase sales > marginal revenue will be much lower than price Marginal revenue can be negative = if the loss of revenue on th e inframarginal units exceeds the fain on the marginal unit Profit maximizing price Profit maximizing scale of operation = the scale at which the marginal revenue balances the marginal cost Contribution margin = total revenue less the variable cost > a seller maximizes profit by operating at a scale where the sale of an additional unit will result in no change to the contribution margin economic inefficiency Marginal benefit exceeds the marginal cost 4. demand and cost changes Change in demand: * New marginal revenue * Original marginal cost = new profit-maximizing sales and price arginal cost change = change in price is less than change in marginal cost When there is a change in either demand or cost, the extent to which a monopoly should adjust its price depends on the shapes of both it marginal revenue and marginal cost curves > it should adjust the price until its marginal revenue equals its marginal cost fixed cost change = profit-maximizing price and scale do not depend in any way on the fixed cost > changes in the fixed cost will not affect the marginal cost curve If the fixed cost is so large that the total cost exceeds total revenue, then the monopoly will prefer to shut down 5. advertising Promotion the set of marketing activities that a business undertakes to communicate with its customers and sell its products > advertising, sales promotion and public relations benefit of advertising Advertising can cause: * Shifting out the demand curve * Demand to be less elastic Benefit of advertising = change in the contribution margin Net benefit = the change in the contribution margin less the advertising expenditure > advertise up to the point that the increase in contribution margin from an additional dollar of advertising is exactly 1 $ = more appropriate to consider the effect of advertising on the contribution margin generated by the product dvertising-sales ratio Incremental margin = price less the marginal cost = increase in the contribution margin fro m selling an additional unit, holding the price constant Incremental marginal percentage = ratio of the price less the marginal cost to the price > measures the production of benefit by each dollar of advertising Advertising-sales ratio = incremental margin multiplied by the advertising elasticity of demand = says how much of the revenue should be invested in advertising 6. research and development = principles are the same as for advertising and promotion Benefit : * Shifting out the demand curve * Causing it to be less elasticNet benefit from R&D = change in the contribution margin less the R&D expenditure R&D-sales ratio = incremental margin percentage multiplied by the R&D elasticity of demand project evaluation = decisions on individual R&D projects should account for the timing of costs and benefits > p 212 7. Market structure effects of competition General points: * A monopoly restricts production below the competitive level and it can set a relatively higher price extracting larger profit * Profit of a monopoly exceeds what would be the combined profit of all the sellers if the same market were perfectly competitive potential competition Perfectly contestable a market in which sellers can entry and exit at no cost > monopoly cannot raise price substantially above its long-run average cost > depends on the extent of barriers to entry and exit lerner index = incremental margin percentage > can be used to compare the degree of monopoly power in markets with different prices > captures the impact of potential competition (P – MC) / P Perfectly competitive market = lerner index equals 0 Monopoly = bigger than 0 Problem = it will not detect the power that a monopoly does not exercise 8. monopsy = buyer with market power restricts purchases to depress the price Trades off: * Marginal expenditure * Marginal benefit Marginal expenditure = change in expenditure resulting from an increase in purchases by one unit maximizing net benefit a monopsy will maxim ize its net benefit by purchasing the quantity at which its marginal benefit equals its marginal expenditure A monopsony restricts purchases to get a lower price and increase its net benefit above the competitive level chapter 9. Pricing 2. uniform pricing = policies where the seller charges the same price for every unit of the product price elasticity = percentage by which the quantity demanded will change if the price of the item rises by 1% Demand inelastic > sales fall less than proportionately with the increase in price = total revenue will increase profit maximizing price Incremental margin percentage = – 1/price elasticity of demand demand and cost changesPricing rule shows how a seller should adjust its price when there are changes in the price elasticity of demand or marginal cost > a seller should not necessarily adjust the price by the same amount as a change in marginal cost common misconceptions * Contribution margin percentage = revenue less variable cost divide d by revenue > accounting systems often assume that costs are proportional = marginal cost is the same as the average variable cost = contribution margin percentage equals the incremental margin percentage * the belief that the profit maximizing price depends only on the elasticity = ignores costs * set the price by marking up average cost > problems: * in economies of scale, the average cost depends on the production scale > the need of an assumption about the scale sales and production scale depend on the price * it gives no guidance as to the appropriate mark-up on average cost Shortcomings: * leaves buyers with a lot of buyer’s surplus * does not sell to every potential buyer 3. complete price discrimination price discrimination = selling down the market demand curve = pricing policy under which a seller sets prices to earn different incremental margins on various units of the same or a similar product Complete price discrimination = a pricing policy where the seller pric es each unit at the buyer’s benefit and sells a quantity such that the marginal benefit equals the marginal cost > it charges every buyer the maximum that he or she is willing to pay for each unit comparison with uniform pricing resolves the two shortcomings of uniform pricing * no buyer’s surplus * economically efficient quantity information = to implement complete price discrimination, the seller must know each potential buyer’s individual demand curve > not enough to know the market demand curve or the price elasticity of the individual demand curves 4. direct segment discrimination Segment = significant cohesive group of buyers within a large market homogenous segments Direct segment discrimination = the policy of setting different incremental margins to each identifiable segment heterogeneous segments Not enough information: * apply uniform pricing within each segment prices are such that the incremental margin percentage for each segment equals the recipro cal of the absolute value of the segment’s price elasticity of demand * apply indirect segment discrimination within each segment implementation Conditions: * To implement direct segment discrimination, the seller must identify and be able to use some identifiable and fixed buyer characteristic that segments the market > otherwise buyer might switch segments * Seller must be able to prevent buyers from reselling the product among themselves = price discrimination is relatively more widespread in services than goods and is especially common in personal services Policy of direct segment discrimination prices should be set to derive a relatively lower incremental margin percentage from the segment with the more elastic demand and a relatively higher incremental margin percentage from the segment with the less elastic demand 5. location Seller can discriminate on the basis of the buyer’s location on two ways: * Free on board (FOB) = a common price to all buyers that does n ot include delivery > the differences among the prices at various locations are exactly the differences in the costs of delivery to those locations * Ignores the differences between the price elasticities of demand in the various markets * Cost including freight = delivered pricing = set prices that include delivery the difference in the prices between the two market will simply be the result of the different incremental margin percentage and the different marginal costs of supplying the two markets A lower margin does not necessarily mean a lower price because there is a transportation cost restricitng resale = if the difference between the prices of a product between two markets exceeds the transportation cost, consumers might buy the item in one market and ship it to the other > gray market = parallel importing 6. indirect segment discrimination = when seller may know that specific segments have different demand curves but cannot find a fixed characteristic with which to discrimi nate directly Indirect Segment discrimination policy of structuring a choice for buyers so as to earn different incremental margins from each segment > voorbeeld p 244-245 implementation Two conditions: * Seller must have control over some variable to which buyers in the various segments are differentially sensitive * Buyers must not be able to circumvent the discriminating variable = seller cannot prevent buyers from reselling the product 7. bundling = combination of two or more products into one package with a single price pure bundling = a pricing policy that offers only a bundle and does not allow the alternative of buying the individual products = more profitable than uniform pricing but less than direct segment discrimination mixed bundling offers buyers a structured choice between the budle and the individual products = form of indirect segment discrimination implementation Three conditions to be effective: * Where there is substantial disparity among the segments in their be nefits from the separate products * Where the benefits of the segments are negatively correlated in the sense that a product that is more beneficial to one segment provides relatively little benefit to another * Where the marginal cost of providing the product is low = when provision of the product involves a substantial marginal cost, a seller should consider mixed bundling 8. selecting the pricing policy Direct discrimination works through buyer attributesIndirect segment discrimination works through product attributes > products under indirect discrimination may provide less benefit than those with direct segmentation > indirect discrimination may involve relatively higher costs > indirect discrimination relies on the various segments voluntarily identifying themselves through the structured choice cannibalization = when the sales of one product reduce the demand for another product with a higher incremental margin > seller cannot discriminate directly and must rely on a structur ed choice of products to discriminate indirectly but discriminating variable does not perfectly separate the buyer segmentsWays to mitigate cannibalization: * Product design * By controlling availability chapter 10. strategic thinking 1. introduction Strategy = a plan for action in a situation where the parties actively consider the interactions with one another in making decisions Game theory = a set of ideas and principles to guide strategic thinking * Simultaneous actions = strategic form * Sequential actions = extensive form 2. nash equilibrium = a framework for strategic decisions that must be taken simultaneously A strategy is dominated = if it generates worse consequences than some other strategy regardless of the other parties’ choice Game in strategic form a tabular representation of a strategic situation, showing one party’s strategies along the rows, the other party’s strategies along the

8 Stages of Man

Cameron Roney Lifespan Development Eight Stages of Man Interview General question on childhood: I interviewed a seventy year old woman named Virginia that I met while doing my community service. I asked her to think about her first ten years of life and to describe times that she can remember being cared for. She said that it was her grandmother that did most of the caretaking for her, especially when she was sick. She recalled one time when she had a really bad sinus infection that her grandmother helped her through.When I asked her if she could think of any time she was not very well cared for, the only time she could think of is when her father would come home bombed, which sparked some intense arguments in the family. She recalled feeling very lost during these times. Fun times in her childhood consisted of time with her family since she did not have any friends as a child. Specifically, she remembered having a lot of fun planting pumpkin seeds with her family. Trust vs. Mistrust : I asked her to describe her relationship with her parents. She said they were very close, and she went hunting with her father often.She got a lot of adult attention. She considered herself to be pretty self reliant and optimistic despite her loneliness. She feels that her seclusion from children her age was a big factor in developing her independence and self reliance. She was trustful of her parents and family, and trustful in herself to deal with most problems that arose in her life at that time. Autonomy vs. Shame/Doubt: Virginia reported to be fairly active, and she is. She runs a local community donation center and does a great deal of work for her church. She describes herself as self reliant.When looking back, she does not feel that she relied on others very much. She considered herself to be adventurous, but not careless. She was not overly fearful, but she wasn’t overly risky either. All in all, she is a very active woman for being seventy years old. Initiative vs . Guilt: When I asked her about her efforts to stay active, she spoke about her work involving the construction of a new church, her being the chairman of the building committee, and her work at the community donation center. She does a lot to help care for her mother and helps her children when she can.She says that all of this is a handful, but she enjoys the activity. She says that when she was younger she did consider herself to be a creative person and could think outside the box. She is an extremely able bodied woman for her age. Industry vs. Inferiority: I asked her to describe her career and her accomplishments. She recalls her thirty five years as a physical therapist. She considered it her responsibility and calling in life. She talked about one boy in particular that she worked with who lived out of town.She worked with him for three years because no one else could reach him. When I asked her about times when she felt that she had been competent and productive and develop ed her skills. She recalls doing a lot of odd jobs which taught her a lot of new skills. She found creative ways to solve problems unique to the different fields she worked in. When I asked her to describe some times that she felt incompetent or ineffective she talked about times when she would overburden herself with too many jobs or trying to handle an extremely large workload herself.She considers herself competent and capable, and really has accomplished a lot in her time. General Question on Identity: I asked her to think about her encounters with her peers when she was between 10 and 19 years of age. She said that she was not so accepted by those around her. She was overweight as a kid. She moved to a new high school which was in a city. This was tough on her because she had grown up in a very secluded setting and she lagged socially. She considered this a huge cultural shift for her. She felt very lost and really had a hard time finding herselfIdentity vs. Identity Diffusion: When I asked her about her experiences as a teenager trying to find herself and who she was and what she wanted out of life, she said that she had always wanted to help people. She wanted to be an architect for the longest time, but she was discouraged when her sister got very sick and saw the therapy she went through. She said that is when she decided to become a therapist. She says that she has a very strong sense of who she is and what her purpose is now. She also says that she is fairly headstrong and not easily influenced by others.To sum up, she has a strong sense of identity. General Intimacy Question: I asked Virginia to think back to her twenties and thirties and the experiences with imported others in her life at that time. She said she had a lot of support and encouragement from those close to her. She was not dependant, but it definitely helped her through some rough times in her life. Intimacy vs. Isolation: I asked her to describe her marriage, and this is where the b ulk of the interview took place. She said that her marriage was rough at first.Her husband was an ex-marine who killed 14 men during his time in the military. He was introverted and very little communication took place between them. It took him thirty years to open up to her. She says that the last years of their marriage have been the most rewarding. Her only sibling died when she was eighteen, but when she was alive they were very close. She was teased a lot, although there was not much fighting between them. They relied on each other for fun which brought them very close together. I asked her who she felt the most comfortable confiding in.She said that she only really felt comfortable confiding in her grandmother and father, but they have both passed away. I asked her if there was anyone close to her that she felt she couldn’t really open up to. Aside from her husband until the later part of their marriage, she talked about her children. She has four, and of all of them th e oldest is the most independent. This caused a lot of friction between them during his adolescents and young adulthood, but they have since grown closer. Her third daughter has been diagnosed with social anxiety disorder and she has spent a lot of time trying to help her open up.In my opinion, the only time that she has had any real intimacy with those close to her was during her early childhood and late adulthood. Most of her life between those times she seems to have been pretty isolated. General Generativity Question: I asked her to reflect on her life from ages thirty to sixty five. I asked her to describe he experiences of taking care of others around her. This was a pretty depressing part of the interview. She said that she often felt inadequate as a mother. She says that she should have gone another direction regarding the way that she brought them up, and that she often regretted having children.She is now pretty involved with her children, and she helps her youngest daught er financially. She gives advice when she is asked. She has definitely taught and helped her children, but I think that it is pretty clear that she lacks a feeling of generativity. Generativity vs. Stagnation: I asked if she feels that she has done enough to have a positive impact on those around her. She feels that from her experiences she has learned to do better and guide gently. She considers herself to be pretty understanding. I asked her in what ways she has tried to pass along her knowledge.She says that she has passed her knowledge along to her children, and she has done a lot of work with juvenile offenders in her community service. She says that she always tried to accept them for who they were, regardless of what they were dealing with. Regarding generativity, she has had a hard time with it, but she feels that she does a lot better now that she has her experiences to draw back to. General Question on Integrity: I asked her about her lifestyle compared to others, and she said that she lives a relatively laid back life. She is fairly chilled out and relaxed. She tries to do her part, but she does not feel pushed.I asked her about how she felt about her mortality. She said that she is not joyous about it, but she is accepting. She finds comfort in her faith. Integrity vs. Despair: I asked her about her current goals. She says that she strives to stay active, she wants to learn to play the piano, and she wants to lose twenty pounds. She feels comfortable about her life and the decisions she made. When I asked her about her opinion about the future of the united states, she said that she is very pessimistic about President Obama, the recession we are experiencing, and the national defeciet.

Russo-Japanese War and the Battle of Tsushima

Russo-Japanese War and the Battle of Tsushima The Battle of Tsushima was fought  May 27-28, 1905, during the Russo-Japanese War (1904-1905) and proved a decisive victory for the Japanese. Following the outbreak of the Russo-Japanese War in 1904, Russian fortunes in the Far East began to decline. At sea, Admiral Wilgelm Vitgefts First Pacific Squadron had been blockaded at Port Arthur since the opening action of the conflict while ashore the Japanese had laid siege to Port Arthur. In August, Vitgeft received orders to break out from Port Arthur and join with a cruiser squadron from  Vladivostok. Encountering  Admiral Togo Heihachiros fleet, a chase ensued as the Japanese sought to block the Russians from escaping. In the resulting engagement, Vitgeft was killed and the Russians were forced to return to Port Arthur. Four days later, on August 14, Rear Admiral Karl Jessens Vladivostok Cruiser Squadron met a cruiser force led by Vice Admiral Kamimura Hikonojo off Ulsan. In the fighting, Jessen lost one ship and was forced to retire. The Russian Response Responding to these reverses and encouraged by his cousin Kaiser Wilhelm II of Germany, Tsar Nicholas II ordered the creation of a Second Pacific Squadron. This would be composed of five divisions from the Russian Baltic Fleet, including 11 battleships. Upon arriving in the Far East, it was hoped that the ships would allow the Russians to regain naval superiority and disrupt Japanese supply lines. Additionally, this force was to aid in breaking the siege of Port Arthur before working to slow the Japanese advance in Manchuria until reinforcements could arrive overland via the Trans-Siberian Railroad. The Baltic Fleet Sails The Second Pacific Squadron sailed from the Baltic on October 15, 1904, with Admiral Zinovy Rozhestvensky in command. A veteran of the Russo-Turkish War (1877-1878), Rozhestvensky had also served as Chief of the Naval Staff. Steaming south through the North Sea with 11 battleships, 8 cruisers, and 9 destroyers, the Russians were alarmed by rumors of Japanese torpedo boats operating in the area. These led to the Russians accidentally fired on a number of British trawlers fishing near Dogger Bank on October 21/22. This saw the trawler Crane sunk with two killed and four other trawlers damaged. Additionally, seven Russian battleships fired on the cruisers Aurora and Dmitrii Donskoi in the confusion. Further fatalities were only avoided due to the Russians poor marksmanship. The resultant diplomatic incident nearly led Britain to declare war on Russia and the battleships of the Home Fleet were directed to prepare for action. To watch the Russians, the Royal Navy directed cruiser squadrons to shadow the Russian fleet until a resolution was achieved. Route of the Baltic Fleet Prevented from using the Suez Canal by the British as a result of the incident, Rozhestvensky was forced to take the fleet around the Cape of Good Hope. Due to a lack of friendly coaling bases, his ships frequently carried surplus coal stacked on their decks and also met contracted German colliers to refuel. Steaming over 18,000 miles, the Russian fleet reached Cam Ranh Bay in Indochina on April 14, 1905. Here Rozhestvensky rendezvoused with the Third Pacific Squadron and received new orders. As Port Arthur had fallen on January 2, the combined fleet was to make for Vladivostok. Departing Indochina, Rozhestvensky steamed north with the older ships of the Third Pacific Squadron in tow. As his fleet neared Japan, he elected to proceed directly through the Tsushima Strait to reach the Sea of Japan as the other options, La Pà ©rouse (Soya) and Tsugaru, would have required passing to the east of Japan. Admirals Fleets Japanese Admiral Togo HeihachiroPrincipal Ships: 4 battleships, 27 cruisers Russians Admiral Zinovy RozhestvenskyAdmiral Nikolai Nebogatov11 battleships, 8 cruisers The Japanese Plan Alerted to the Russians approach, Togo,  the commander of the Japanese Combined Fleet, began preparing his fleet for battle. Based at Pusan, Korea, Togos fleet consisted primarily of 4 battleships and 27 cruisers, as well as a large number of destroyers and torpedo boats. Correctly believing that Rozhestvensky would pass through the Tsushima Strait to reach Vladivostok, Togo ordered patrols to watch the area. Flying his flag from the battleship Mikasa, Togo oversaw a largely modern fleet which had been thoroughly drilled and trained. In addition, the Japanese had begun using high explosive shells which tended to inflict more damage than the armor-piercing rounds preferred by the Russians. While Rozhestvensky possessed four of Russias newest Borodino-class battleships, the remainder of his fleet tended to be older and in ill-repair. This was worsened by the low morale and inexperience of his crews. Moving north, Rozhestvensky attempted to slip through the strait on the night of May 26/27, 1905. Detecting the Russians, the picket cruiser Shinano Maru radioed Togo their position around 4:55 AM. The Russians Routed Leading the Japanese fleet to sea, Togo approached from the north with his ships in a line ahead formation. Spotting the Russians at 1:40 PM, the Japanese moved to engage. Aboard his flagship, Knyaz Suvorov, Rozhestvensky pressed on with the fleet sailing in two columns. Crossing in front of the Russian fleet, Togo ordered the fleet to follow him through a large u-turn. This allowed the Japanese to engage Rozhestvenskys port column and block the route to Vladivostok. As both sides opened fire, the superior training of the Japanese soon showed as the Russian battleships were pummeled. Striking from around 6,200 meters, the Japanese hit Knyaz Suvorov, badly damaging the ship and injuring Rozhestvensky. With the ship sinking, Rozhestvensky was transferred to the destroyer Buiny. With the battle raging, the command devolved to Rear Admiral Nikolai Nebogatov. As the firing continued, the new battleships Borodino and Imperator Alexander III were also put out of action and sunk. As the sun began to set, the heart of the Russian fleet had been destroyed with little damage inflicted upon the Japanese in return. After dark, Togo launched a massive attack involving 37 torpedo boats and 21 destroyers. Slashing into the Russian fleet, they relentlessly attacked for over three hours sinking the battleship Navarin and crippling the battleship Sisoy Veliki. Two armored cruisers were also badly damaged, forcing their crews to scuttle them after dawn. The Japanese lost three torpedo boats in the attack. When the sun rose the next morning, Togo moved in to engage the remnants of Nebogatovs fleet. With only six ships left, Nebogatov hoisted the signal to surrender at 10:34 AM. Believing this a ruse, Togo opened fire until the signal was confirmed at 10:53. Throughout the rest of the day, individual Russian ships were hunted and sunk by the Japanese. Aftermath The Battle of Tsushima was the only decisive fleet action fought by steel battleships. In the fighting, the Russian fleet was effectively destroyed with 21 ships sunk and six captured. Of the Russian crews, 4,380 were killed and 5,917 captured. Only three ships escaped to reach Vladivostok, while another six were interned in neutral ports. Japanese losses were a remarkably light 3 torpedo boats as well as 117 killed and 583 wounded. The defeat at Tsushima badly damaged Russias international prestige while signaling Japans ascent as a naval power. In the wake of Tsushima, Russia was forced to sue for peace.

Epiphanies in James Joyces Dubliners Essay Example

Epiphanies in James Joyces Dubliners Essay Example Epiphanies in James Joyces Dubliners Paper Epiphanies in James Joyces Dubliners Paper An Encounter and Beeline each main character experiences an epiphany. An Encounter is about a boy who decides to skip school with his friends one day. The boys friends played Cowboys and Indians often and this caused a hunger for adventure in the boys mind. The boy became convinced that exciting things only happen to those who go exploring about so he decided to ditch school one day and go into town. There the boy meets an old man and he is embarrassed of his friend and doesnt want to seem foolish. He appears well educated and like a sharp boy to the reader. The reader almost experiences an epiphany along with the boy because up until now the reader wasnt fully aware of the boys intelligence. The boy realized he didnt even like Mahoney, the friend he was running off with. The Juvenile spirit of him actually annoyed the boy. He didnt need to act cool or play hooky or read comics. He enjoyed earning, acting mature, and being a respectable boy and it took talking to this old man for him to realize that. Beeline relates the story of a woman who is planning to run off with her fiance ©. The story reads as if she has a tough home life especially since her mother died. For the first part of the story she ponders her decision wondering if she is making the right choice. She constantly is putting the promise she made to her mother in consideration. Her mother is her only reason of thinking of staying. She knows that staying involves a lot more work less respect a lot of duty ND taking care of her abusive father. The two people she cared about most in her family are already gone. In a weird sense having her mother gone is what is holding her back. She told her mom that she would make sure her father is being taken care of. She also has a bit of nostalgia for this kind of living. She admired her mother and thinks that if it was good enough for her mother than she should live the same way. Overall she decides the life is too tough and that she should elope with her lover. The reader is lead to believe she has every intention of doing so. She gets on the docks dead to run away but at the very last minute she refuses to go in a sudden realization. This comes to as a shock to the reader and it can only be assumed that she realized she had to fulfill her promise. The epiphany in Beeline was a different because she was stuck on a decision and couldnt make up her mind. So she was searching for this realization whereas the boy in An Encounter wasnt expecting to discover that he wasnt who he was pretending to be. Although she was hoping for the decision to be made the reader can note that it probably wasnt what she was expecting and it didnt come when she expected it to. In After the Race the main character Jimmy is trying to fit in with the elite and rich crowd. He does this by spending money as if he has more than he actually does, gambling, and attending the race. Jimmy goes to a hotel with his friends and then proceeds to go to a yacht. The story frequently refers to Jimmys father and how he worked so hard to get Jimmy and himself to fit into this crowd. Jimmy plays cards on the yacht and falls deep into EOT out doesnt stop. A muleteer AT alcohol Ana Ignorance over rule Nils reasoning. He is aware that he cant afford to be partying like he is but decides that he will worry bout that problem tomorrow. At the end of the story it is announced that its daybreak. Joyce constructed the end of the story in such a way that the reader experiences the epiphany with Jimmy. One might experience frustration as Jimmy gambles away money he doesnt have, but might understand the fools yearn to have fun and put off his worries until tomorrow. At the end of the story when tonights fun has made an abrupt and quick transition into the next mornings troubles Jimmy and the reader realize the drunken mistake. Jimmy is in a very similar situation that the boy in An Encounter was in. The boy wanted to be a troublemaker and have no regard for learning. They both experience a societal calling. Its not socially acceptable interested in ones education or to stay at home with a book rather than drinking and gambling. Both of these characters try to reach this social status until at the end come upon a sudden realization that renders that achievement either impossible or undesirable. Beeline and Jimmy are in almost entirely opposite situations. Beeline is attempting to do what is best for herself. She plans to elope with her loving fiance © leaving behind a troubled home life. At the end of the story, however, she is unable to go through with it making the decision that would least benefit herself. In After the Race Jimmy makes poor decision throughout the story but the reader is led to believe that his epiphany will lead him to lead a more reasonable life in the future. All three characters realize something about themselves. This is a little ironic because one would assume that when an epiphany is realized it might be of some great truth to life. It seems odd yet a little more realistic that these particular Edibleness have reached a point of true self-discovery in these epiphanies.