Book contents
- Frontmatter
- Contents
- Preface
- How to use this book
- List of online perspectives
- List of further readings online
- List of online video modules
- Book I The market economy, overview and application
- 1 Microeconomics: a way of thinking about business
- 2 Principles of rational behavior in society and business
- 3 Competitive product markets and firm decisions
- 4 Applications of the economic way of thinking: domestic government and management policies
- 5 Applications of the economic way of thinking: international and environmental economics
- Book II Demand and production theory
- Book III Competitive and monopoly market structures
- References
- Index
4 - Applications of the economic way of thinking: domestic government and management policies
from Book I - The market economy, overview and application
- Frontmatter
- Contents
- Preface
- How to use this book
- List of online perspectives
- List of further readings online
- List of online video modules
- Book I The market economy, overview and application
- 1 Microeconomics: a way of thinking about business
- 2 Principles of rational behavior in society and business
- 3 Competitive product markets and firm decisions
- 4 Applications of the economic way of thinking: domestic government and management policies
- 5 Applications of the economic way of thinking: international and environmental economics
- Book II Demand and production theory
- Book III Competitive and monopoly market structures
- References
- Index
Summary
Without bandying jargon or exhibiting formulae, without being superficial or condescending, the scientist should be able to communicate to the public the nature and variety of consequences that can reasonably be expected to flow from a given action or sequence of actions. In the case of the economist, he can often reveal in an informal way, if not the detailed chain of reasoning by which he reaches his conclusions, at least the broad contours of the argument.
E. J. MishanChapters 1–3 showed how the models of competitive markets are fundamental to the economic way of thinking. With such models we can illuminate the economic effects of market changes, such as an increase in the price of oil. This chapter examines how domestic government policies and management practices can affect the operations of markets, product prices, and output levels, as well as worker wages and employment levels. In Part A, we apply supply-and-demand-curve analysis developed in the first three chapters to five types of government control: excise taxes, gasoline price controls, rent controls, minimum-wage laws, and mandated fringe benefits. As you will see, government controls imposed in competitive markets can inspire (if not force) management reactions that negate some of the expected effects of the controls. Along the way, we consider how management policies toward work demands, fringe benefits, and honest dealing affect wage rates and firms' efficient operations in competitive markets.
- Type
- Chapter
- Information
- Microeconomics for MBAsThe Economic Way of Thinking for Managers, pp. 127 - 162Publisher: Cambridge University PressPrint publication year: 2010