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01:220:389 Study Guide - Fall 2018, Comprehensive Midterm Notes - X86 Assembly Language, Western Electric, Walgreens


Department
Economic
Course Code
01:220:389
Professor
Warmingham
Study Guide
Midterm

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01:220:389
MIDTERM EXAM
STUDY GUIDE
Fall 2018

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Public Policy Toward Business
Public policy: government protects citizens from business
Business: an organization that combines inputs to produce goods and services in order
to earn a profit
Factors of Production: land: natural resource, labor: human effort, capital: man-made
resource, entrepreneurial expertise: management
Types of business: sole proprietorship, partnership, and corporation
Sole proprietorship: one owner, unlimited liability, owner retains profits, easily formed
and dissolved, financial limitations, management deficiencies
Partnership: two or more people acting as co-owners, easy to form, management
skills increase, financial capacity increases, personal assets at risk, interpersonal
conflicts
Corporation: legal entity chartered by the state, unlimited owners, limited liability,
expanded financial capacity, specialized management skills, legal restrictions
Corporate Structure: stockholder, board of directors, CEO, middle management, lower
management
Principal/Agency Problem
The likelihood that managers may place personal goals ahead of corporate goals
Profit= Total Revenue - Total Cost
Total Revenue=Price X Quantity
Total Cost= Fixed Cost + Variable Cost
Production and costs
Total Costs= Fixed Costs+Variable costs
Average fixed costs= Total Fixed Costs/Output
Average Variable Costs=Total Variable Costs/Output
Average total costs= Average Fixed Costs+Average Variable Costs
Marginal Costs= Change in total cost/change in quantity
Variable Costs- Raw materials and labor
Break-even point
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The sales level that must be reached if losses are to be avoided
Limitations of break-even analysis
The assumption of linear revenues and cost functions
The difficulty in classifying semi variable costs
Application is difficult in multi product output
The use of short-term time horizon
Reservation Price
The price at which consumers value each number of units demanded
Consumer Surplus
The difference between what a consumer is willing to pay and what the consumer
must pay
Producer Surplus
The difference between the market price and what the producer is willing to receive
Work Place Discrimination
When certain employees are treated differently or worse by their bosses, managers,
supervisors, and/or fellow employees because of characteristics of that employee
Types of Employment Discrimination
Rase
Religion
National origin
Disability
Age
Gender
Sexual Orientation
Marital Status
Pregnancy
The Public Sector
Government’s Role= provide legal structure, maintain competition, redistribute
income, reallocation of resources, promote economic stability
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