Question 9 Which of the following is not an aspect of an organization's microenvironment? O threat of new entrants Obuyer bargaining power Othreat of substitutes O employee loyalty

Why do employers have a natural advantage in bargaining with employees?

What are some of the most important laws that protect employee right?

HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the planes operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R, how much should the firm invest in R on top of the private return; that is, an R private return to HighFlyer Airlines would have a 9 social return. How much investment is socially optimal at the 6 interest rate?

Why does entry occur?

Name some factors that can cause a shift in the demand curve in labor markets.

Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as the incumbent tries to bleak into the market by selling 4,000 units of output. Estimate from the graph what the new firms average cost of producing output would be. If the incumbent continues. to produce 6,000 units, how much output would the two films supply to the market? Estimate what would happen to the market price as a result of the supply of both the incumbent firm and the new entrant. Approximately how much profit would each firm earn? Figure 9.2 Economics of Scale and Natural Monoploy

To ensure safety and efficacy, the Food and Drug Administration regulates the medicines that pharmacies are allowed to sell in the United States. Sometimes this means a company must test a drug for years before it can reach the market. We can easily identify the winners. in this system as those who are protected from unsafe drugs that might otherwise harm them. Who ate the more anonymous losers who suffer from strict medical regulations?

Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in the town of Unionville, where all the bus drivers belong to a union. What would the equilibrium wage and quantity be in this market if no union existed? Assume that the union has enough negotiating power to raise the wage to 4 per hour higher than it would otherwise be. Is there now excess demand or excess supply of labor?

What is the marginal cost of labor?