Chapter 1: Managers and Economics1CHAPTER 1: MANAGERS AND ECONOMICSOVERVIEWThis chapter introduces students to economics and how managerial decisions are affected by bothmicroeconomics and macroeconomic factors.Microeconomics is the study of how consumers,firms and industries makedecisionsregarding the products that they buy and sell. Macroeconomicsis the study of the overall level of economic activity, including topics such as changes in the pricelevel, unemployment and economic growth.The case study on the global automobile industrydemonstrates howmanagerialdecisions are influenced by changingmicroeconomic andmacroeconomic variables.Microeconomic influences include how consumer behavior affectsrevenues, and how technology and the market structure affect the costs of production.Macroeconomic influences include changes in aggregate spending in the economy, monetary andfiscal policies as well as outside influences in the rest of the world.OUTLINE OF TEXT MATERIALI.Managers and EconomicsA.Motivate why managers should study economics.B.Managers need to understand both microeconomics and macroeconomics as theymake decisions.C.The textbook presents both areas and integratesthemfrom a managerial standpoint.II.Case for Analysis:Micro-and Macroeconomic Influences on the Global AutomobileIndustry.The case illustrates howmicroeconomicand macroeconomic factors influencemanagerial decisions.A.Macroeconomic points:1.The case demonstrates how a manufacturing industry is influenced by thecurrency exchange rate(a)A strong Japanese yen and a weak US dollar motivate the Japaneseauto makers to shift their production to the US2.The case demonstrates the impact of foreign investment on the economyPreview Mode
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