TEST BANK
, CHAPTER 1: MANAGERS AND ECONOMICS
OVERVIEW
This chapter introduces students to economics and how managerial decisions are affected by both
microeconomics and macroeconomic factors. Microeconomics is the study of how consumers,
firms and industries make decisions regarding the products that they buy and sell. Macroeconomics
is the study of the overall level of economic activity, including topics such as changes in the price
level, unemployment and economic growth. The case study on the global automobile industry
demonstrates how managerial decisions are influenced by changing microeconomic and
macroeconomic variables. Microeconomic influences include how consumer behavior affects
revenues, and how technology and the market structure affect the costs of production.
Macroeconomic influences include changes in aggregate spending in the economy, monetary and
fiscal policies as well as outside influences in the rest of the world.
OUTLINE OF TEXT MATERIAL
I. Managers and Economics
A. Motivate why managers should study economics.
B. Managers need to understand both microeconomics and macroeconomics as they
make decisions.
C. The textbook presents both areas and integrates them from a managerial standpoint.
II. Case for Analysis: Micro- and Macroeconomic Influences on the Global Automobile
Industry. The case illustrates how microeconomic and macroeconomic factors influence
managerial decisions.
A. Macroeconomic points:
1. The case demonstrates how a manufacturing industry is influenced by the
currency exchange rate
(a) A strong Japanese yen and a weak US dollar motivate the Japanese
auto makers to shift their production to the US
2. The case demonstrates the impact of foreign investment on the economy
, CHAPTER 1: MANAGERS AND ECONOMICS
OVERVIEW
This chapter introduces students to economics and how managerial decisions are affected by both
microeconomics and macroeconomic factors. Microeconomics is the study of how consumers,
firms and industries make decisions regarding the products that they buy and sell. Macroeconomics
is the study of the overall level of economic activity, including topics such as changes in the price
level, unemployment and economic growth. The case study on the global automobile industry
demonstrates how managerial decisions are influenced by changing microeconomic and
macroeconomic variables. Microeconomic influences include how consumer behavior affects
revenues, and how technology and the market structure affect the costs of production.
Macroeconomic influences include changes in aggregate spending in the economy, monetary and
fiscal policies as well as outside influences in the rest of the world.
OUTLINE OF TEXT MATERIAL
I. Managers and Economics
A. Motivate why managers should study economics.
B. Managers need to understand both microeconomics and macroeconomics as they
make decisions.
C. The textbook presents both areas and integrates them from a managerial standpoint.
II. Case for Analysis: Micro- and Macroeconomic Influences on the Global Automobile
Industry. The case illustrates how microeconomic and macroeconomic factors influence
managerial decisions.
A. Macroeconomic points:
1. The case demonstrates how a manufacturing industry is influenced by the
currency exchange rate
(a) A strong Japanese yen and a weak US dollar motivate the Japanese
auto makers to shift their production to the US
2. The case demonstrates the impact of foreign investment on the economy
