Welcome to EC 209: Managerial Economics- Group A By: Dr Welcome to EC 209: Managerial Economics- Group A By: Dr. Jacqueline Khorassani Study Guide Week Seven (Note: You must go over these slides and complete every task outlined here before Thursday, October 18)

Don’t forget that Aplia Assignment 4 Is due on Wednesday before 5 PM. Don’t miss it.

Long Run Production Function Isoquant What is it? Shape? Reasons for different shapes? What is the marginal rate of technical substitution Why does it diminish?

Cost in long run Isocost What is it? Shape/slope? Reasons?

Cost minimization Rule? Graph? Optimal input substitution?

Cost function in the short run What are the different types of costs? Graphs?

Cubic Cost Function What is it?

Long Run Costs Economies/diseconomies of scale Sources? Graph?

Multi-Product Cost Function What are they? What is the economies of scope? What is cost complementarily? What is the Quadratic Multi-Product Cost Function?

You will now need to study Papers by Jensen and Gibbons Available on Blackboard; Chapter 6 of Baye

What is manager’s role in an organization? Describe the 3 methods of procuring Inputs. What are transaction costs? What are specialized Investments? Types? Implications? What is Williamson’s Analysis? What are the factors influencing the relative efficiency of market and firms?

What is a one-shot transaction? What is an ongoing supply relationship? What is the Principal-Agent Problem? Internal/external incentives What is the indifference curve approach to managerial incentives? How can the problem between managers and workers be solved? What are the managerial incentive schemes?

Chapter 7 of Baye What is market structure? What are the major structure variables? What is the Four-Firm Concentration Ratio? What is the Herfindahl-Hirschman Index (HHI)? What are the limitations of concentration measures? What is the Rothschild Index? What is the Lerner Index? What is the markup factor? What is the Dansby-Willig Performance Index

Integration and Merger Activity What is Vertical Integration? What is Horizontal Integration? What is Conglomerate Mergers?