Economics for Managers
Fall 2005


These assignments are subject to change up to one week in advance of each class.

August 18
Read chapter 2 of the text (skip section 6) before class. Also, please read the front page article in Tuesday's Raleigh News and Observer about gas prices, especially their box listing three supply factors and three demand factors.

August 25
Read the assigned material in the text, plus at least one of the two Wall Street Journal articles. Also take a look at problems 2, 6, and 10 in chapter 9 on pp. 333-5 of the text.

September 1
Think about the following questions when preparing the Merck case:
1. Should the performance appraisal and salary administration system be revised? Why?

2. What changes would you recommend? How should the changes be implemented? Carefully think about the potential side-effects.

The primary assignment for this case is to put yourself in the role of Steve Darien who must recommend changes (if any) to the existing performance appraisal and salary administration system. Come to class prepared to discuss and defend your proposal.

Consider all aspects of your proposal carefully. It's not enough to suggest an alternative without thinking about potential side-effects. How will you implement your program, and "sell" it to your employees?

September 8
Read the HBS case "Relevant Costs and Revenues" and focus on sections 7.1-7.2 of the text in preparing for class.

September 22
Read the HBS case "Global Climate Change (A)" and think about the following questions:
1. What steps should the federal government be taking about global climate change?
2. What role should business leaders play in this debate?
3. When does it make sense for a company to take steps on its own to deal with climate change issues?

Also be sure to read the article by Milton Friedman.

October 13
Please look at the assigned sections of the textbook before coming to class, especially sections 10.1 and 10.2.

October 20
Assignment questions for the EU antitrust and Microsoft case:

1. Does the EU complaint against Microsoft have merit?

2. Is forcing Microsoft to share information in software a good idea?

3. Hoes does the DG COMP's approach to Microsoft compare to the US DOJs?

4. Should Microsoft settle or fight?

Here are some links to information about the Microsoft case:

  1. Declaration by Professor Franklin Fisher, MIT, in the Microsoft trial
  2. Findings of Fact by Judge Jackson in the Microsoft trial
  3. Implications of the case by Professor Nicholas Economides, NYU

October 27
Assignment questions for the Coca-Cola case:

1. Is selling Coke through interactive vending machines a good or bad idea?

2. What is Coke? What does Coke mean to the average consumer?

3. Where, how, and for whom does this technology create/destroy value?

4. Are there any pricing related issues that can adversely affect the firm?

5. What did Coca-Cola do right? What did it do wrong? How would you have done it?

6. Does Coca-Cola engage in price discrimination in any other ways? In what circumstances will price discrimination be an effective practice for Coca-Cola?

November 3
Read the case "The Airline Industry and the World Trade Center Disaster" and think about the following questions:

1. What was the state of the airline industry before the September 11 disaster?

2. What impact has the September 11 disaster had on the industry? Compare the situation in the U.S. to the rest of the industry?

3. Why do you think some firms were hit harder than others?

4. What does the future hold for the industry?

5. How can airlines deal with the risks they face?

November 17
Read the two HBS cases "Market Failures" and "Coming Soon: A Theater Near You"
Assignment questions for the "Coming Soon: A Theatre Near You" case:
1. How does the discussion of organizational boundaries in today's class apply to this situation?

2. Suppose you were the owner of a movie studio. Would you want to own your own chain of movie theatres?

3. Suppose you were the owner of a chain of movie theatres. What steps would you take to increase your negotiating power with the movie studios?