Applied Problems from Chapters 8 and 9 Essays

Applied Problems from Chapters 8 and 9 Essays Applied Problems from Chapters 8 and 9 Essay Applied Problems from Chapters 8 and 9 Essay Applied Problems from Chapter 8 and 9 Marquita B. Mouton BUS 640 Managerial Economics Charles Fanning December 6, 2010 Applied Problems from Chapters 8 and 9 The application of material is the true test of knowledge. With the help of the concepts and theories learned from Chapter 8 and 9, this paper will answer the second applied problem from Chapter 8 and the second and fourth applied problems from Chapter 9. Chapter 8 At a management luncheon, two managers were overheard arguing about the following statement: â€Å"A manager should never hire another worker if the new person causes diminishing returns. † Is this statement correct? The scenario presented describes a question managers must face every day. It is not wise hire another workers solely due to them causing diminishing returns. According to the Law of Diminishing Marginal Product, as long as the marginal product does not become negative, it would be wise that a manager hire beyond the initial diminishing number (Thomas and Maurice, 2011). For example, if 1200 units need to be produced and the 11th person hired causes the returns to diminish, then it would be advantageous to the manager to hire enough employees to satisfy the output without causing the marginal product to drop below zero. Chapter 9 2. The Largo Publishing House uses 400 printers and 200 printing presses to produce books. A printer’s wage rate is $20, and the price of the printing press is $5,000. The last printer added 20 books to total output, while the last press added 1,000 books to total output. Is the publishing house making the optimal input choice? Why or why not? At the current input, Largo Publishing House is not making the optimal choice on input amounts. With the current inputs, they are underestimating the printers employed. Fifty printers could do the job of 1 printing press machine with a savings of $4,000. 2a. If not, how should the manager of Largo Publishing House adjust input usage? To maximize output on a fixed budget, Largo Publishing House should transfer some of the money spent on printing presses to the printers. At 1650 printers and 195 printing presses, combined they could produce 228,000 books for their limited budget. On the other hand, at 1900 printers and 190 printing presses, Largo Publishing could not only produce the same amount but also save $20,000 in the process. 4. The MorTex Company assembles garments entirely by hand even though a textile machine exists that can assemble garments faster than a human can. Workers cost $50 per day, and each additional laborer can produce 200 more units per day (i. e. , Marginal product is constant and equal to 200). Installation of the first textile machine on the assembly line will increase output by 1,800 units daily. Currently the firm assembles 5,400 units per day. 4a. The financial analysis department of MorTex estimates that the price of a textile machine is $600 per day. Can management reduce the cost of assembling 5,400 units per day purchasing a textile machine and using less labor? No it would not be possible to reduce the cost of assembling 5,400 units per day by purchasing a textile machine at the current worker wage of $50 per day. The cost of the total production would be $5,400 at any point where the amount if textile machines increased and the amount of workers decreased. For example, if three textile machines were bought and the amount of workers was decreased to 72, although totally they would produce 9000 units, it would still cost $5400. 4b. The Textile Workers of America is planning to strike for higher wages. Management predicts that if the strike is successful, the cost of labor will increase to $100 per day. If the strike is successful, how would this affect the decision in part a to purchase a textile machine? In part a, if more the amount of workers decreased and textile machines were purchased, MorTex would have been spending the same amount of money toward their production total. If the strike is successful and the workers’ wages increased from $50 to 100, it would be in the best interest of MorTex to purchase 9 textile machines and layoff all of their workers. If they pursued this option, they could produce 16,200 units with the same $5,400 they were already spending. References Thomas, C. and Maurice, S. , Managerial Economics: Foundations of Business Analysis and Strategy, Tenth Edition, Published by McGraw-Hill/Irwin, 2010.

Electoral College Pros and Cons

Electoral College Pros and Cons The Electoral College system, long a source of controversy, came under especially heavy criticism after the 2016 presidential election when Republican Donald Trump lost the nationwide popular vote to Democrat Hillary Clinton by over 2.8 million votes but won the Electoral College- and thus the presidency- by 74 electoral votes. Electoral College Pros and Cons Pros:Gives the smaller states an equal voice.Prevents disputed outcomes ensuring a peaceful transition of powerReduces the costs of national presidential campaigns.Cons:Can disregard the will of the majority.Gives too few states too much electoral power.Reduces voter participation by creating a â€Å"my vote doesn’t matter† feeling. By its very nature, the Electoral College system is confusing. When you vote for a presidential candidate, you are actually voting for a group of electors from your state who have all â€Å"pledged† to vote for your candidate. Each state is allowed one elector for each of its Representatives and Senators in Congress. There are currently 538 electors, and to be elected, a candidate must get the votes of at least 270 electors. The Obsolescence Debate The Electoral College system was established by Article II of the U.S. Constitution in 1788. The Founding Fathers chose it as a compromise between allowing Congress to choose the president and having the president elected directly by the popular vote of the people. The Founders believed that most common citizens of the day were poorly educated and uninformed on political issues. Consequently, they decided that using the â€Å"proxy† votes of the well-informed electors would lessen the risk of â€Å"tyranny of the majority,† in which the voices of the minority are drowned out by those of the masses. Additionally, the Founders reasoned that the system would prevent states with larger populations from having an unequal influence on the election. Critics, however, argue that Founder’s reasoning is no longer relevant as today’s voters are better-educated and have virtually unlimited access to information and to the candidates’ stances on the issues. In addition, while the Founders considered the electors as being â€Å"free from any sinister bias† in 1788, electors today are selected by the political parties and are usually â€Å"pledged† to vote for the party’s candidate regardless of their own beliefs. Today, opinions on the future of the Electoral College range from protecting it as the basis of American democracy to abolishing it completely as an ineffective and obsolete system that may not accurately reflect the will of the people. What are some of the main advantages and disadvantages of the Electoral College? Advantages of the Electoral College   Promotes fair regional representation: The Electoral College gives the small states an equal voice. If the president was elected by the popular vote alone, candidates would mold their platforms to cater to the more populous states. Candidates would have no desire to consider, for example, the needs of farmers in Iowa or commercial fishermen in Maine.Provides a clean-cut outcome: Thanks to the Electoral College, presidential elections usually come to a clear and undisputed end. There is no need for wildly expensive nationwide vote recounts. If a state has significant voting irregularities, that state alone can do a recount. In addition, the fact that a candidate must gain the support of voters in several different geographic regions promotes the national cohesion needed to ensure a peaceful transfer of power.Makes campaigns less costly: Candidates rarely spend much time- or money- campaigning in states that traditionally vote for their party’s candidates. For example, Democrats rarely campaign in liberal-leaning California, just as Republicans tend to skip the more conservative Texas. Abolishing the Electoral College could make America’s many campaign financing problems even worse.  Ã‚   Disadvantages of the Electoral College   Can override the popular vote: In five presidential elections so far- 1824, 1876, 1888, 2000, and 2016- a candidate lost the nationwide popular vote but was elected president by winning the Electoral College vote. This potential to override the â€Å"will of the majority† is often cited as the main reason to abolish the Electoral College.Gives the swing states too much power: The needs and issues of voters in the 14 swing states- those that have historically voted for both Republican and Democratic presidential candidates- get a higher level of consideration than voters in other states. The candidates rarely visit the predictable non-swing states, like Texas or California. Voters in the non-swing states will see fewer campaign ads and be polled for their opinions less often voters in the swing states. As a result, the swing states, which may not necessarily represent the entire nation, hold too much electoral power.Makes people feel their vote doesn’t matter: Under the Electoral College system, while it counts, not every vote â€Å"matters.† For example, a Democrat’s vote in liberal-leaning California has far less effect on the election’s final outcome that it would in one of the less predictable swing states like Pennsylvania, Florida, and Ohio. The resulting lack of interest in non-swing states contributes to America’s traditionally low voter turnout rate. The Bottom Line Abolishing the Electoral College would require a constitutional amendment, a lengthy and often unsuccessful process. However, there are proposals to â€Å"reform† the Electoral College without abolishing it. One such movement, the National Popular Vote plan would ensure that the winner of the popular vote would also win at least enough Electoral College votes to be elected president. Another movement is attempting to convince states to split their electoral vote based on the percentage of the state’s popular vote for each candidate. Eliminating the winner-take-all requirement of the Electoral College at the state level would lessen the tendency for the swing states to dominate the electoral process. Sources and Further Reference â€Å"From Bullets to Ballots: The Election of 1800 and the First Peaceful Transfer of Political Power.† TeachingAmericanHistory.org.Hamilton, Alexander. â€Å".†The Federalist Papers: No. 68 (The Mode of Electing the President) congress.gov, Mar. 14, 1788Meko, Tim. â€Å".†How Trump won the presidency with razor-thin margins in swing states Washington Post (Nov. 11, 2016).