The benefits of a free enterprise system.

Please select a topic from the list provided below or from the chapter readings.

 The benefits of a free enterprise system.

 Capitalism and free trade are crucial foundations for freedom from poverty.

 Voluntary transactions create wealth by moving assets from lower- to higher-valued uses.

 Anything that impedes the movement of assets to higher-valued uses, like taxes, subsidies, or price controls, destroys wealth.

 Each inefficiency implies a money-making opportunity.

 The art of business consists of finding an asset in lower-valued use and devising ways to profitably move it to higher-valued one.

 A company can be thought of as a series of transactions.

 Costs are associated with decisions.

 Opportunity cost

 These are the relevant costs and relevant benefits of a decision.

 Accounting profit does not necessarily correspond to economic profit.

 A good incentive compensation scheme links pay to performance measures that reflect effort.

 All investment decisions involve a trade-off between current sacrifice and future gain.

 Companies, like individuals, have different discount rates, determined by their cost of capital.

 Net Present Value (NPV)

 Sunk costs

 Post-investment hold-up

 Price elasticity of demand

 Law of diminishing marginal returns

 Increasing returns to scale

 Economies of scale

 Diseconomies of scale.

 Learning curves

 Market Equilibrium

 Competitive industry

 Mean reversion

 Compensating wage differentials

 Monopoly

 The industrial organization economics (IO) perspective assumes that the industry structure is the most important determinant of long-run profitability.

 The Five Forces model is a framework for analyzing the attractiveness of an industry.

 According to the resource-based view (RBV), individual firms may exhibit sustained performance advantages because of their superior resources.

 To stay one step ahead of the forces of competition, a firm can adopt one of three basic strategies: cost reduction, product differentiation, or reduction in the intensity of competition.

 Foreign exchange market

 Devaluations help domestic producers and foreign consumers, but hurt domestic consumers and foreign producers.

 Psychological biases suggest being aware of price expectations and “framing” price changes as gains rather than as losses.

 Price discrimination

 Arbitrage

 If a seller can identify two groups of consumers with different demand elasticities and can prevent arbitrage between the groups, it can increase profit by charging a higher price to the low-elasticity group.

 Game Theory

 Common-value auction,

 Winner’s curse

 Moral hazard

 Transfer Pricing

Students will be expected to research and write papers summarizing in their own words what they have found on current topics from the weekly readings. Research is a theoretical review of relevant literature and application of findings in the literature to a topic related to a specific industry, field, or business problem.

The research must be conducted using peer-reviewed trade or academic journals. While Blogs, Wikipedia, encyclopedias, course textbooks, popular magazines, newspaper articles, online websites, etc. are helpful for providing background information, these resources are NOT suitable resources for this research assignment.

Please Note: The UC Library staff are very helpful with assisting students in using the UC Online Library journal database. Please contact them if you have issues. In addition, the instructor has provided additional resources, including a research tutorial, in the “Course Resources” folder in the “Content” area of the course.

Assignment Requirements:

i. Choose a research topic from the chapter readings or from the list provided by your professor.

ii. Research/find a minimum at least four (4), preferably five (5) or more, different peer-reviewed articles on your topic from the University of the Cumberlands Library online business database. The article(s) must be relevant and from a peer-reviewed source. While you may use relevant articles from any time frame, current/published within the last five (5) years are preferred. Using literature that is irrelevant or unrelated to the chosen topic will result in a point reduction.

iii. Write a four (4) to five (5) page double spaced paper in APA format discussing the findings on your specific topic in your own words. Note – paper length does not include cover page, abstract, or references page(s).

iv. Structure your paper as follows:

a. Cover page

b. Overview describing the importance of the research topic to current business and professional practice in your own words.

c. Purpose of Research should reflect the potential benefit of the topic to the current business and professional practice and the larger body of research.

d. Review of the Literature summarized in your own words. Note that this should not be a “copy and paste” of literature content, nor should this section be substantially filled with direct quotes from the article. A literature review is a summary of the major points and findings of each of the selected articles (with appropriate citations). Direct quotations should be used sparingly. Normally, this will be the largest section of your paper (this is not a requirement; just a general observation).

e. Practical Application of the literature. Describe how your findings from the relevant research literature can shape, inform, and improve current business and professional practice related to your chosen topic.

f. Conclusion in your own words

g. References formatted according to APA style requirements

Grading Criteria:

 Content Knowledge & Structure (25 points): All of the requested components are completed as assigned; content is on topic and related to managerial economics, critical thinking is clearly demonstrated (few, if any, direct quotations from the source in the paper); scholarly research is demonstrated; topics and concepts gained from the assigned reading and/or from research is evident.

 Critical Thinking (15 points): Demonstrates substantial critical thinking about topics and solid interpretation of materials and reflection.

 Clarity & Effective Communication (15 points): Communication is clear, concise, and well presented; scholarly writing is demonstrated; grammar, sentence structure, writing in third person, and word choice is used correctly.

 Integration of Knowledge & Articles (15 points): Articles used are current and relevant (preferably published within last five (5) years and MUST be from peer-reviewed journal article publications. At least four (4) peer-reviewed journal articles are examined and analyzed in the paper.

 Presentation & Writing Mechanics (30 points): Cover page, headings, in-text citations, page citations (page number citations required for specific information such as dates, years, list of items from article, names, numbers, statistics, and other specific information), and references are properly formatted.