Insights into doing business in China from the Financial Times now of particular interest as Australia draws near to negotiating an FTA with its largest trading partner.
Aranca Brief | Global Deals (M & A) - Volume-1-1 - September 2014Aranca
The global M&A market witnessed 1,048 deals with a total value of USD228BN in August 2014. This Aranca report provides updates on latest merger & acquisition across the globe including North America, Europe, Asia-Pacific, Middle East and Africa.
Recent political trends suggest reshoring would protect and promote US manufacturing jobs. Political protectionism, demand for local products and a renewed interest in manufacturing make the US attractive. However, the economics of globalization, affordable foreign labor and consumers' expectations make foreign markets enticing.
Learn how big brands like Apple, Nike and Walmart approach a ‘Made in the USA’ strategy, and the factors your company must weigh before deciding whether to relocate your manufacturing operations.
Insights into doing business in China from the Financial Times now of particular interest as Australia draws near to negotiating an FTA with its largest trading partner.
Aranca Brief | Global Deals (M & A) - Volume-1-1 - September 2014Aranca
The global M&A market witnessed 1,048 deals with a total value of USD228BN in August 2014. This Aranca report provides updates on latest merger & acquisition across the globe including North America, Europe, Asia-Pacific, Middle East and Africa.
Recent political trends suggest reshoring would protect and promote US manufacturing jobs. Political protectionism, demand for local products and a renewed interest in manufacturing make the US attractive. However, the economics of globalization, affordable foreign labor and consumers' expectations make foreign markets enticing.
Learn how big brands like Apple, Nike and Walmart approach a ‘Made in the USA’ strategy, and the factors your company must weigh before deciding whether to relocate your manufacturing operations.
State-Of-Trade-2014
Buyers are anticipating cost increases in their supply chain in 2014, and sourcing in new geographies’ is the most popular opportunity for cost savings next year. Further, 61% of our buyer/other respondents said that sourcing in China had become more expensive over the past twelve months and nearly 75% said they were actively looking for suppliers outside China.
WHAT IS THE COX AUTOMOTIVE INSIGHT REPORT?
How will the new and used car markets perform during the rest of this year? What will become the future fuel of choice? What are the barriers as we drive towards Mobility as a Service (MaaS)?
In this first annual Insight Report from Cox Automotive and Grant Thornton, we go beyond the headlines to provide our view on the future of our market, and what it means for us all.
Manufacturing is an integral
part of the Illinois economy.
While it accounts for 12.1% of
the State’s GDP and 7.8% of
total employment, it also
impacts many other sectors of
the economy.
Manufacturers also spend
millions of dollars on goods
and services from local
suppliers, which in turn
supports addiƟonal jobs and
business sales. In addiƟon,
manufacturing workers, as well
as the employees of related
suppliers, spend their earnings
on food, housing,
ransportaƟon, healthcare,
entertainment, and other
consumer goods in their
communiƟes.
When these factors are taken
into account, manufacturing
contributes 24.7% of Illinois’
total GDP and supports one in
five jobs.
The Rapidly Evolving Landscape of Meal Kits and E-commerce in Food & BeverageL.E.K. Consulting
Consumers are increasingly strapped for time, and when they’re shopping for and preparing fresh, healthy food, every extra minute counts. Here’s where meal kits and e-commerce come in: they give consumers control and the ability to personalize their meals, while saving them valuable time otherwise spent on shopping and food prep.
In this webinar, Rob Wilson, Managing Director at L.E.K. Consulting, and The Food Institute will explore the $150 billion land grab of e-commerce sales in food & beverage and the role of meal kits in this rapidly evolving landscape.
This Assessment of the Consumer Impact Regarding the Marketplace Fairness Act provides a unique look at how the proposed legislation could impact households across the nation.
This presentation by EU DG COMP was made during the discussion “Market Concentration” held at the 129th meeting of the OECD Competition Committee on 7 June 2018. More papers and presentations on the topic can be found out at oe.cd/2gw.
The Columbus metro continued its steady expansion by recently adding 15,200 payrolls, year-over-year, bringing total non-farm employment to 1.02 million. Meanwhile, unemployment fell 60 basis points year-over-year to 3.8 percent.
State-Of-Trade-2014
Buyers are anticipating cost increases in their supply chain in 2014, and sourcing in new geographies’ is the most popular opportunity for cost savings next year. Further, 61% of our buyer/other respondents said that sourcing in China had become more expensive over the past twelve months and nearly 75% said they were actively looking for suppliers outside China.
WHAT IS THE COX AUTOMOTIVE INSIGHT REPORT?
How will the new and used car markets perform during the rest of this year? What will become the future fuel of choice? What are the barriers as we drive towards Mobility as a Service (MaaS)?
In this first annual Insight Report from Cox Automotive and Grant Thornton, we go beyond the headlines to provide our view on the future of our market, and what it means for us all.
Manufacturing is an integral
part of the Illinois economy.
While it accounts for 12.1% of
the State’s GDP and 7.8% of
total employment, it also
impacts many other sectors of
the economy.
Manufacturers also spend
millions of dollars on goods
and services from local
suppliers, which in turn
supports addiƟonal jobs and
business sales. In addiƟon,
manufacturing workers, as well
as the employees of related
suppliers, spend their earnings
on food, housing,
ransportaƟon, healthcare,
entertainment, and other
consumer goods in their
communiƟes.
When these factors are taken
into account, manufacturing
contributes 24.7% of Illinois’
total GDP and supports one in
five jobs.
The Rapidly Evolving Landscape of Meal Kits and E-commerce in Food & BeverageL.E.K. Consulting
Consumers are increasingly strapped for time, and when they’re shopping for and preparing fresh, healthy food, every extra minute counts. Here’s where meal kits and e-commerce come in: they give consumers control and the ability to personalize their meals, while saving them valuable time otherwise spent on shopping and food prep.
In this webinar, Rob Wilson, Managing Director at L.E.K. Consulting, and The Food Institute will explore the $150 billion land grab of e-commerce sales in food & beverage and the role of meal kits in this rapidly evolving landscape.
This Assessment of the Consumer Impact Regarding the Marketplace Fairness Act provides a unique look at how the proposed legislation could impact households across the nation.
This presentation by EU DG COMP was made during the discussion “Market Concentration” held at the 129th meeting of the OECD Competition Committee on 7 June 2018. More papers and presentations on the topic can be found out at oe.cd/2gw.
The Columbus metro continued its steady expansion by recently adding 15,200 payrolls, year-over-year, bringing total non-farm employment to 1.02 million. Meanwhile, unemployment fell 60 basis points year-over-year to 3.8 percent.
Extra Credit
1. A “natural monopoly” exists when
A company creates a monopoly because it has an important patent
A company naturally creates a monopoly because it was more innovative than other competitors
One company can serve a market less costly than two or more firms.
2. True or False? Most public utilities are considered to be natural monopolies.
3. The presence of very large fixed costs and relatively low variable costs typically results in
A. Average costs declining throughout the relevant range of demand
B. A natural monopoly
C. Both A and B
D. Neither A nor B
4. An example of a Public Utility would be
Walmart
El Paso Electric Co.
Congress
Microsoft
5. The Public Interest Theory of regulation suggests
Government regulates to promote social economic welfare (as economists would prescribe)
Government regulates to promote their own welfare
Government should not regulate at all
None of the above
6. True or False? Stigler’s Economic Theory of Regulation suggests that people in government are self-interested individuals.
Suppose a power plant generates an additional 10 mWh of electricity for a profit of $100,000. This additional production also creates pollution damages to others equivalent to $120,000. From society’s view, the efficient decision is not to generate the additional power.
7. True or False? Under the Coase Theorem without transactions costs, the efficient decision will be made when the public has the right to receive damage payments.
8. True or False? Under the Coase Theorem without transactions costs, the efficient decision will be made when the power plant has the right to pollute.
9. True or False? If the market causing a negative externality has a property right to do so, the Coase Theorem would suggest that those being harmed would organize and make a payment to stop or limit the market activity.
10. The presence of transaction costs in the “real world” may
Give a rationale for government regulation.
Ensure that the Coase Theorem efficiency results always prevail.
Make it easy to organize people against a polluting company.
11. Why is it rational for groups affected by regulation to expend resources to influence regulatory decisions?
Government’s power of coercion may be used to redistribute wealth between groups of people.
Government will do what is best for the public interest.
Government regulation should be eliminated.
12. “Taxation by Regulation” (Richard Posner) suggests that regulation is used for what purpose?
Help airlines and other regulated industries.
Cross-subsidize certain markets or market segments.
Increase the general fund (tax revenues) directly collected by the government.
Protect the environment.
13. True or False? The “Capture Theory” of regulation is an extreme (polar) case of the Economic Theory of Regulation.
14. Which of the following is not an assumption under Professor Stigler’s “Economic Theory of Regulation”?
All actors in a political-economy are self-int.
John Barrymore Feb. 24, 2015
BA 3103 –XXX
T&R, 11:00 AM – 12:20 PM
Big Tobacco and the Advent of E-Cigarettes
Background
The U.S. tobacco industry is among the most heavily regulated and heavily taxed industries in the United States (The Economist, 2014). Medical evidence of the adverse effects of smoking continues to grow, and the share of American adults who smoke has declined markedly during the past fifty years, from 42% in 1965 to less than 18% in 2013 (CDC, 2013). But in spite of ever-increasing regulation and public wariness of the U.S. tobacco industry, tobacco companies continue to thrive. This oligopoly industry, dominated by big tobacco companies Altria, Reynolds American, and Lorillard, serves a shrinking but remarkably loyal customer base. Critics are quick to point out that, despite extensive regulation of the marketing practices in the industry, tobacco products remain highly lucrative, with sales of over $66 billion in 2014 (Hargreaves, 2014).
This beleaguered but very profitable industry must now deal with another, potentially very disruptive innovation in the form of e-cigarettes. This new product category, the modern version of which dates from 2007, generated U.S. sales of $2.5 billion in 2014 (Richtel, 2014). Although the e-cigarette sector is still relatively small, it clearly has the potential to disrupt tobacco sales in the coming years. E-cig use is generally perceived to be less unhealthful than cigarette smoking, and the e-cig habit is substantially less costly than consuming tobacco cigarettes (Richtel, 2014). Moreover, e-cigarettes are far less regulated than tobacco products, without many of the marketing constraints.
The early success of e-cigarettes has not gone unnoticed by the big tobacco companies. Lorillard was the first to enter this sector with the acquisition in 2012 of the Blu eCig brand (Esterl, 2012). Since then, Altria and Reynolds American have indicated their intention to introduce e-cig product lines (Richtel, 2014).
Problem Statement
Tobacco companies must address the advent of e-cigarettes in order to defend their tobacco business and to identify business opportunities in the growing e-cigarette product sector.
Alternative
Solution
s
In order to limit the impact of e-cigarettes on the sales of tobacco cigarettes, tobacco companies can lobby for additional regulation of this new product category. Increased regulation will help to “level the playing field” and reduce the advantages enjoyed by e-cigs as a consequence of their largely unrestricted marketing. Among the areas for increased regulation of e-cigarettes, the tobacco companies can lobby federal, state, and local governments to ban television and radio broadcasting of e-cig advertising, prohibit online sales of this product category, and proscribe e-cig use in public places. These changes will reduce some of the advantages of e-cigs over tobacco products, thereby presumably slowing the market acceptance.
Life Settlement Industry Report
The dynamic nature of the life settlement market guided the creation of a comprehensive Life Settlement Industry Report. To present the landscape of the life settlement market as a whole, this report relies on growth data over the past four years as well as the increasingly competitive nature of the industry. A thorough discussion of the three types of risk associated with life settlements helps flesh out the portrait of the settlement market, and a summary of trends in the industry casts an eye toward the promising future of the industry.
Among the key findings in the industry report:
The growth of the life settlement industry has surpassed the predictions of forecasters. Whereas a 2016 Conning report projected an annual growth of 1 to 2 percent, the market has actually grown an average of 34 percent over the past few years.
With an aging population and lengthening life spans, retirement costs and the prohibitive price of long-term care necessitate options like the life settlement that can increase a senior’s disposable income.
Many people in their retirement years struggle with monthly expenses but hold wealth in non-liquid assets like a house, land, securities or a life insurance policy. When an insurance policy is no longer serving their needs, it can be converted into cash flow through a cash settlement to ease the retirement burden.
Learn more @: https://www.magnalifesettlements.com/
International Economics & Policy (VV2)
We Also Provide SYNOPSIS AND PROJECT.
Contact www.kimsharma.co.in for best and lowest cost solution or
Email: amitymbaassignment@gmail.com
Call: 9971223030
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
1. Examination Paper of Managerial Economics
IIBM Institute of Business Management 1
IIBM Institute of Business Management
Subject Code-B-106 Examination Paper MM.100
Managerial Economics
Section A: Objective Type (30 marks)
This section consists of multiple choices & Short notes type questions.
Answer all the questions.
Part one carries 1 mark each & Part two carries 5 marks each.
Part one:
Multiple choices:
1. It is a study of economy as a whole.
a. Macroeconomics
b. Microeconomics
c. Recession
d. Inflation
2. A comprehensive formulation which specifies the factors that influence the demand for the
product.
a. Market demand
b. Demand schedule
c. Demand function
d. Income effect
3. It is computed when the data is discrete and therefore incremental changes is measurable.
a. Substitution effect
b. Arc elasticity
c. Point elasticity
d. Derived demand
4. Goods & services used for final consumption is called:
a. Demand
b. Consumer goods
c. Producer goods
d. Perishable goods
5. The curve at which satisfaction is equal at each point.
a. Marginal utility
b. Cardinal measure of utility
c. The Indifference Curve
d. Budget line
2. Examination Paper of Managerial Economics
IIBM Institute of Business Management 2
6. Costs that are reasonably expected to be incurred in some future period or periods are:
a. Future costs
b. Past costs
c. Incremental costs
d. Sunk costs
7. Condition when the firm has no tendency either to increase or to contract its output:
a. Monopoly
b. Profit
c. Equilibrium
d. Market
8. Total market value of all finished goods & services produced in a year by a country’s residents is
known as:
a. National income
b. Gross national product
c. Gross domestic product
d. Real GDP
9. The sum of net value of goods & services produced at market prices:
a. Government expenditure
b. Product approach
c. Income approach
d. Expenditure approach
10. The market value of all the final goods & services made within the borders of a nation in an year.
a. Globalization
b. Subsidies
c. GDP
d. GNP
Part Two:
1. Define ‘Arc Elasticity’.
2. Explain the law of ‘Diminishing marginal returns’.
3. What is ‘Prisoner’s Dilemma’, of non cooperative game?
4. What is ‘Third degree Discrimination’?
END OF SECTION A
3. Examination Paper of Managerial Economics
IIBM Institute of Business Management 3
Section B: Case lets (40 marks)
This section consists of Case lets.
Answer all the questions.
Each Case let carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
Case let 1
The war on drugs is an expensive battle, as a great deal of resources go into catching those who buy or
sell illegal drugs on the black market, prosecuting them in court, and housing them in jail. These costs
seem particularly exorbitant when dealing with the drug marijuana, as it is widely used, and is likely no
more harmful than currently legal drugs such as tobacco and alcohol. There's another cost to the war on
drugs, however, which is the revenue lost by governments who cannot collect taxes on illegal drugs. In a
recent study for the Fraser Institute, Canada, Economist Stephen T. Easton attempted to calculate how
much tax revenue the government of the country could gain by legalizing marijuana. The study estimates
that the average price of 0.5 grams (a unit) of marijuana sold for $8.60 on the street, while its cost of
production was only $1.70. In a free market, a $6.90 profit for a unit of marijuana would not last for long.
Entrepreneurs noticing the great profits to be made in the marijuana market would start their own grow
operations, increasing the supply of marijuana on the street, which would cause the street price of the
drug to fall to a level much closer to the cost of production. Of course, this doesn't happen because the
product is illegal; the prospect of jail time deters many entrepreneurs and the occasional drug bust ensures
that the supply stays relatively low. We can consider much of this $6.90 per unit of marijuana profit a
risk-premium for participating in the underground economy. Unfortunately, this risk premium is making a
lot of criminals, many of whom have ties to organized crime, very wealthy. Stephen T. Easton argues that
if marijuana was legalized, we could transfer these excess profits caused by the risk premium from these
grow operations to the government: If we substitute a tax on marijuana cigarettes equal to the difference
between the local production cost and the street price people currently pay – that is, transfer the revenue
from the current producers and marketers (many of whom work with organized crime) to the government,
leaving all other marketing and transportation issues aside we would have revenue of (say) $7 per [unit].
If you could collect on every cigarette and ignore the transportation, marketing, and advertising costs, this
comes to over $2 billion on Canadian sales and substantially more from an export tax, and you forego the
costs of enforcement and deploy your policing assets elsewhere. One interesting thing to note from such a
scheme is that the street price of marijuana stays exactly the same, so the quantity demanded should
remain the same as the price is unchanged. However, it's quite likely that the demand for marijuana would
change from legalization. We saw that there was a risk in selling marijuana, but since drug laws often
target both the buyer and the seller, there is also a risk (albeit smaller) to the consumer interested in
buying marijuana. Legalization would eliminate this risk, causing the demand to rise. This is a mixed bag
from a public policy standpoint: Increased marijuana use can have ill effects on the health of the
population but the increased sales bring in more revenue for the government. However, if legalized,
governments can control how much marijuana is consumed by increasing or decreasing the taxes on the
product. There is a limit to this, however, as setting taxes too high will cause marijuana growers to sell on
the black market to avoid excessive taxation. When considering legalizing marijuana, there are many
economic, health, and social issues we must analyze. One economic study will not be the basis of
Canada's public policy decisions, but Easton's research does conclusively show that there are economic
benefits in the legalization of marijuana. With governments scrambling to find new sources of revenue to
pay for important social objectives such as health care and education expect to see the idea raised in
Parliament sooner rather than later.
4. Examination Paper of Managerial Economics
IIBM Institute of Business Management 4
Questions:
1. Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case
above.
2. On the basis of the analysis of the case above, what is your opinion about legalizing marijuana in
Canada?
Case let 2
Companies that attend to productivity and growth simultaneously manage cost reductions very differently
from companies that focus on cost cutting alone and they drive growth very differently from companies
that are obsessed with growth alone. It is the ability to cook sweet and sour that under grids the
remarkable performance of companies likes Intel, GE, ABB and Canon. In the slow growth electro-
technical business, ABB has doubled its revenues from $17 billion to $35 billion, largely by exploiting
new opportunities in emerging markets. For example, it has built up a 46,000 employee organization in
the Asia Pacific region, almost from scratch. But it has also reduced employment in North America and
Western Europe by 54,000 people. It is the hard squeeze in the north and the west that generated the
resources to support ABB's massive investments in the east and the south. Everyone knows about the
staggering ambition of the Ambanis, which has fuelled Reliance's evolution into the largest private
company in India. Reliance has built its spectacular rise on a similar ability to cook sweet and sour. What
people may not be equally familiar with is the relentless focus on cost reduction and productivity growth
that pervades the company. Reliance's employee cost is 4 per cent of revenues, against 15-20 per cent of
its competitors. Its sales and distribution cost, at 3 per cent of revenues, is about a third of global
standards. It has continuously pushed down its cost for energy and utilities to 3 per cent of revenues,
largely through 100 per cent captive power generation that costs the company 4.5 cents per kilowatt-hour;
well below Indian utility costs, and about 30 per cent lower than the global average. Similarly, its capital
cost is 25-30 per cent lower than its international peers due to its legendary speed in plant commissioning
and its relentless focus on reducing the weighted average cost of capital (WACC) that, at 13 per cent, is
the lowest of any major Indian firm.
A Bias for Growth
Comparing major Indian companies in key industries with their global competitors shows that Indian
companies are running a major risk. They suffer from a profound bias for growth. There is nothing wrong
with this bias, as Reliance has shown. The problem is most look more like Essar than Reliance. While
they love the sweet of growth, they are unwilling to face the sour of productivity improvement.
Nowhere is this more amply borne out than in the consumer goods industry where the Indian giant
Hindustan Lever has consolidated to grow at over 50 per cent while its labour productivity declined by
around 6 per cent per annum in the same period. Its strongest competitor, Nirma, also grew at over 25 per
cent per annum in revenues but maintained its labour productivity relatively stable. Unfortunately,
however, its return on capital employed (ROCE) suffered by over 17 per cent. In contrast, Coca Cola,
worldwide, grew at around 7 per cent, improved its labour productivity by 20 per cent and its return on
capital employed by 6.7 per cent. The story is very similar in the information technology sector where
Infosys, NIIT and HCL achieve rates of growth of over 50 per cent which compares favorably with the
world's best companies that grew at around 30 per cent between 1994-95. NIIT, for example, strongly
believes that growth is an impetus in itself. Its focus on growth has helped it double revenues every two
years. Sustaining profitability in the face of such expansion is an extremely challenging task. For now,
this is a challenge Indian InfoTech companies seem to be losing. The ROCE for three Indian majors fell
by 7 per cent annually over 1994-96. At the same time IBM Microsoft and SAP managed to improve this
ratio by 17 per cent. There are some exceptions, however. The cement industry, which has focused on
productivity rather than on growth, has done very well in this dimension when compared to their global
5. Examination Paper of Managerial Economics
IIBM Institute of Business Management 5
counterparts. While Mexico's Cemex has grown about three times fast as India's ACC, Indian cement
companies have consistently delivered better results, not only on absolute profitability ratios, but also on
absolute profitability growth. They show a growth of 24 per cent in return on capital employed while
international players show only 8.4 per cent. Labour productivity, which actually fell for most industries
over 1994-96, has improved at 2.5 per cent per annum for cement.
The engineering industry also matches up to the performance standards of the best in the world.
Companies like Cummins India have always pushed for growth as is evidenced by its 27 per cent rate of
growth, but not at the cost of present and future profitability. The company shows a healthy excess of
almost 30 per cent over WACC, displaying great future promise. BHEL, the public sector giant, has seen
similar success and the share price rose by 25 per cent despite an indecisive sensex. The only note of
caution: Indian engineering companies have not been able to improve labour productivity over time,
while international engineering companies like ABB, Siemens and Cummins Engines have achieved
about 13.5 per cent growth in labour productivity, on an average, in the same period. The pharmaceuticals
industry is where the problems seem to be the worst, with growth emphasized at the cost of all other
performance. They have been growing at over 22 per cent, while their ROCE fell at 15.9 per cent per
annum and labour productivity at 7 per cent. Compare this with some of the best pharmaceutical
companies of the world – Glaxo Wellcome, SmithKline Beecham and Pfizer –who have consistently
achieved growth of 15-20 per cent, while improving returns on capital employed at about
25 per cent and labour productivity at 8 per cent. Ranbaxy is not an exception; the bias for growth at the
cost of labour and capital productivity is also manifest in the performance of other Indian Pharma
companies. What makes this even worse is the Indian companies barely manage to cover their cost of
capital, while their competitors worldwide such as Glaxo and Pfizer earn an average ROCE of 65 per
cent. In the Indian textile industry, Arvind Mills was once the shining star. Like Reliance, it had learnt to
cook sweet and sour. Between 1994 and 1996, it grew at an average of 30 per cent per annum to become
the world's largest denim producer. At the same time, it also operated a tight ship, improving labour
productivity by 20 per cent. Despite the excellent performance in the past, there are warning signals for
Arvind's future. The excess over the WACC is only 1.5 per cent, implying it barely manages to satisfy its
investor’s expectations of return and does not really have a surplus to re-invest in the business.
Apparently, investors also think so, for Arvind's stock price has been falling since Q4 1994 despite such
excellent results and, at the end of the first quarter of 1998, is less than Rs 70 compared to Rs 170 at the
end of 1994. Unfortunately, Arvind's deteriorating financial returns over the last few years is also typical
of the Indian textile industry. The top three Indian companies actually showed a decline in their return
ratios in contrast to the international majors. Nike, VF Corp and Coats Viyella showed a growth in their
returns on capital employed of 6.2 per cent, while the ROCE of Grasim and Coats Viyella (India) fell by
almost 2 per cent per annum. Even in absolute returns on assets or on capital employed, Indian companies
fare a lot worse. While Indian textile companies just about cover their WACC, their international rivals
earn about 8 per cent in excess of their cost of capital.
Questions:
1. Is Indian companies running a risk by not giving attention to cost cutting?
2. Discuss whether Indian Consumer goods industry is growing at the cost of future profitability.
3. Discuss capital and labour productivity in engineering context and pharmaceutical industries in
India.
4. Is textile industry in India performing better than its global competitors?
END OF SECTION B
6. Examination Paper of Managerial Economics
IIBM Institute of Business Management 6
Section C: Applied Theory (30 marks)
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. Free trade promotes a mutually profitable regional division of labour, greatly enhances the
potential real national product of all nations and makes possible higher standards of living all
over the globe.” Critically explain and examine the statement.
2. What role does a decision tree play in business decision-making? Illustrate the choice between
two investment projects with the help of a decision tree assuming hypothetical conditions about
the states of nature, probability distribution, and corresponding pay-offs.
S-2-301012
END OF SECTION C