MGCR 293 Lecture Notes - Economic System, Demand Curve
21 Nov 2012
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Document Summary
Pv of all expected future profits = trt tct/ (1-i) ^t. Input constraints specialized eqp, skilled labor, essential materials. Legal constraints minimum wage, rates, health & safety standards, taxes, enviro laws. Owners want managers to maximize the value of the firm by maximizing the profits of the firm. Profit reducing objective of managers who are not owners but work as management in the company. Study of how scarce or limited resources are used to produce goods & services in order to satisfy needs & wants. Study of decision making in a world of scarcity. Wants: what people would buy if income was unlimited. Macro national level (health services, amusement parks, employment, roads) Economic system: how a society distributes its sources to produce goods & services (e. g. command, agrarian, command, mixed) Firms & individuals interacting to buy/sell goods & services. Market processes facilitated by market forces of supply & demand.
