Bahan Kuliah Ekonomi Managerial CHP 1-4 Baye 2022

Managerial Economics and Business Strategy
Tenth Edition
Michael R. Baye / Jeffrey T. Prince
Chapter 1.
The Fundamentals of Managerial Economics
1. What is economics?
2. Define managerial economics
3. What is profit?
4. What is economic profit
5. What is accounting profit
6. What is explicit cost
7. What is implicit cost
8. What is the meaning of profit maximization?
9. Recognize the Time value of money such as
Present Value Analysis
Soal:
A woman managing a duplicating (photocopying) established for $25,000 per year
decided to open her own duplicating place. Her revenue during the first year of
operations is $120,000 and her expences are as follows:
Salaries to hired help $45,000
Supplies $15,000
Rent $10,000
Utilities $ 1,000
Interest on bank loan $10,000
Calculate: a)the explicit costs, b) the implicit costs, c) business profit, d) the economics
profit and e) the normal return on investment in this business
Chapter 2
1
Market Forces: Demand and Supply
1. Define demand. Define supply

2. List non price factors that influence demand and supply
3. In defining demand and supply, why do you think economists focus on price while
holding constant other factors that might have an impact on the behavior of buyers
and sellers?
4. The law of demad and supply
5. Movement along the demand and supply
6. Shift the demand and supply curve
7. What is the market equilibrium and restriction of the market equilibrium
8. Government controlled the price
- Ceiling Price
- Floor Price
Quantitative Demand Anaysis

Chapter 3
Elasticity Concept
1. Explain what an elasticity of demand represents and how it is

measured
2. Identify what factors determine whether demand is elastic or inelastic
3. Factors affecting the own price elasticity of demand
4. Relation of elasticity and total revenue
5. Perfectly elastic demand
6. Perfectly inelastic of demand
7. Explain the meaning of cross price elasticity of demand
8. Explain the meaning of income elasticity of demand
9. Explain the meaning elasticity of supply
10. Understand the distinction between arc elasticity and point
elasticity
Short Problems for elasticity.
2
1. (a) Would you expect the price elasticity of demand to be higher for Chevrolet
automobiles or for automobiles in general ? Why ? (b) Would you expect the
price elasticity of demand for electricity for resindential use to be higher or lower than for
industrial use ? Why ? (c) Would you expect the price elasticity of demand for electricity
to be higher or lower in the short run as compared with the long run ? Why ?
2. Agricultural commodities are known to have a price – inelastic demand and to be
necessities. How can this information allow us to explain why the income of farmers falls
(a) after a good harvest ? (b) In relation to the incomes in other sectors of the economy ?
3. . Suppose that the cross-price elasticity of demand between McIntosh and Golden
Delicious apples is 0,8, between apples and apple juice is 0,5, between apples and
cheese is 0,4, and between apples and beer is 0,1. What can you say about the
relationship between each set of commodities ?
4. .A researcher estimated that the price elasticity of demand for automobiles in the United
States is – 1.2, while the income elasticity of demand is 3.0. Next year, U.S. automakers
intend to increase the average price of automobiles by 5 percent, and they expect
consumers; disposable income to rise by 3 percent. (a) If sales domestically
produced automobiles are 8 million this year, how many automobiles do you expect
U.S. automakers to sell next year ? (b). By how much should domestic automakers
increase the price of automobiles if they wish to increase sales by 5 percent next year ?
5. The management of the Mini Mill Steel Company estimated the following elasticities for a
special type of steel : Ep = - 2, EI= 1, and Exy = 1,5, where X refers to steel and Y to
aluminum. Next year, the firm would like to increase the price of the steel it sells by 6
percent. The management forecasted that income will rise by 4 percent next year and
that the price of aluminum will fall by 2 percent. (a) If the sales this year are 1,200 tons of
the steel, how many tons can the firm expect to sell next year ? (b) By what percentage
must the firm change the price of steel to keep its sales at 1,200 tons next year ?
The theory of individual behaviour

Chapter 4
Questions:
1. What is the indifference ? Explain

2. What are the four basic assumption about individual preferences. Explain the
significances of meaning of each?
3. Suppose that a set of indifference curve was not negatively sloped. What would you say
about desirability of the two goods?
4. Explain why two indifference curves cannot intersect?
5. What is the budget constraint?
6. Consumer behavior when income change
7. Consumer behavior when prices change
8. Explain the derivation of demand curve using indifference analysis (PCC)
9. Distinguish between the income and substitution effect when price change(increase and
decrease)
3
Distinguish between the inferior and normal goods when income chane (Engel curve)

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Managerial Economics and Business Strategy

Michael R. Baye / Jeffrey T. Prince

1. Define demand. Define supply

Quantitative Demand Anaysis

1. Explain what an elasticity of demand represents and how it is

Short Problems for elasticity.

The theory of individual behaviour

1. What is the indifference ? Explain

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