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The Solow-Swan Model Consider an economy with the general Cobb-Douglas production function: Y, = AK, "Let-a. Answer the following questions, assuming that labour grows at the rate n = 0 and adopting the assumptions made in lecture. The equation describing capital dynamics is: KE+1= 66+16-dk1 where d is a constant parameter. a) Obtain the steady state levels of the capital stock (K), output (X), capital per worker (K), output per worker () and real interest rates (r). Make sure to show all your work. b) Using the help of the Solow-Swan diagram developed in lectures and tutorials, explain the effect of a decrease in the savings rate on the standard of living of the economy. Make sure to include: i) The economic explanation of why the economy experienced a change in the steady state level of capital per worker. ) A diagram illustrating what happened to the relevant curves. ili) Another diagram illustrating the dynamics of the stock of capital in the economy (before, at and after the change in savings). iv) What must have happened to the growth rate of output per worker in the transition between the initial equilibrium and the final one?

Scenario You own a bakery caf which has been successful ior the last 10 years. You have opened 3 branches in the Sydney metropolitan area. As your business gained a great reputation in the market, there were several approaches for franchise inquiries. However, you are concerned that the quality of products and services may be affected; therefore, you have decided not to consider the franchise option. Considering your business objective (to increase sales) and intense competition in the industry, you are looking for collaborative alliances with potential collaborators. As the current production capacity can meet up to 7 times greater than the current sales volume, you will need to find an appropriate collaborator to boost up your sales. The business has the following objectives for business expansion or sales increase:

The quality of the products must be managed and produced under the main branch supervision.

The products are in very high demand as the customers are satisfied with the quality.

The product know-how must be treated as intellectual property and is not an option to share.

The business considers collaborative alliances to expand its business. The partner business must meet the following selection criteria determined by the business:

- The partner business must have a good market reputation.

- The partner business has an annual turnover of at least $2 million.

- The partner business must be able to accelerate your business sales.

- The partner business must be able to support training for collaborative works.

- The partner business must have appropriate communication channels for collaborative alliances.

Question 1: (PC 1.1, PE 1, 2, KE 5)

a. Identify at least two opportunities for collaborative alliances (strategic alliance) and explain how the business can increase sales according to the organisational objectives.

b. Evaluate each opportunity identified in Question 1 for collaborative alliances.

Question 2: (KE 1)

List methods to identify and evaluate potential collaborators.

Question 3: (PC 1.2, PE 1, 2, 4, KE 5)

a. Based on your evaluation of opportunities for collaborative alliances in Question 1, which collaborator (out of your 2 suggestions) will you recommend? Provide your reasons.

b. Based on your recommendation in Part (a), evaluate the following companies according to the organisational policies and select the most appropriate collaborator with your reason.

Annual turnover A$ 10 million A$ 5 million

Training facilities Available Not Available

Communication channel Headquarters and branches Only headquarters

Question 4: (PC 1.3)

Developing relationships with the identified collaborators is important. Explain how you will initiate and develop a relationship with them.

Question 5: (PC 2.1) The partner business for the collaborative alliance has provided you with the following information:

The partner business requests to share the customer data.

The partner business requests to share the profits and a 50/50 partnership agreement.

The partner business wants to have training for baking products.

The partner business wants to learn how to operate a bakery and caf. Required: Analyse the partner's request for the collaborative alliance. Explain which requests can be accepted and which requests cannot be accepted. Provide your reasons.

Question 6: (PC 2.1, KE 3, 4)

You are required to negotiate with the partner about the requests provided in Question 5 and draw up an agreement.

a. Explain which options must be negotiated.

b. During the negotiation, list appropriate communication skills for effective negotiation.

c. Explain the steps in documenting the agreement for the collaborative alliance.

Question 7: (PC 2.2, PE 3, KE 7)

Once the agreement is finalised and is signed by both parties, explain why you should review the formal agreement once it is operating.

4. Suppose a doctor's visit actually costs $90. In other words, the marginal cost of seeing the doctor is constant at $90. Bob has demand for doctor's visits given by the following equation where is the quantity demanded and P is the price of a doctor's visit: = 100.5

e. Suppose Bob's insurance plan calls for a $50 co-pay. How many times will Bob go to the doctor? What is the dollar value of the moral hazard with the co-pay? Illustrate with a diagram and calculate.

f. Compare and contrast your analysis in part e. to the situation where the insurance company requires a 20% coinsurance rate instead of a co-pay.

g. Is it possible that the co-pay or coinsurance cold actually reduce social wellbeing? Explain.

Consider an oligopolistic market with N firms competing la Cournot.. Firm i's cost function is given by C (q ) cq (i 1,...N) i i = i =

. Show that the ratio between industry profits and revenue is given by H / , where H measures the Herfindahl index of concentration. How would this result change if you considered a conjectural variation model of oligopoly, assuming, for simplicity, symmetric firms?

Due to his long hours as a junior broker with Stampson, Clarke & Weinstein, a prestigious blue-chip brokerage firm on Wall Street, Mike Keaggy was put on some substantive accounts that pertained to the firm's top corporate clients. Just several weeks ago, Mike's boss, Harry Stampson, a named partner, approached Mike about taking on the Pfeifer account. The Pfeifer Corporation, a closely-held corporation of several brothers and sisters of a wealthy California family, had generated approximately $1.7 million in annual fees over the past ten years, and was an account that was assigned to promising your workers with an ability to run profit for the firm. Harry added, "I run a tight ship around here and look for only one thing: your ability to add value to our bottom line. I don't like creative-types. Everything we do here has a purpose and is tried-and-true."

Fred and Amy, two junior associates, were assigned to Mike's account. Amy, a Harvard grad, had already made a name for herself by being aggressive with numbers. Fred, a UCLA grad, was reserved and liked to proceed methodically through a project. He wasn't like around the firm but was loyal to his partners.

Fred had consulted the Codes of Conduct and Code of Ethics on other accounts, and wanted to know on what issues these documents related on the Pfeifer account. The brothers and sisters are directors and officers charged with fiduciary duties in running the corporation. One of the directors, Sue, had recently purchased some property worth $25 million without getting permission from the board. Mike read a note on the memo that read, "Hide this purchase--Pfeifer doesn't want this transaction to show on financials. We don't want other clients to know about this--could negatively impact investment advice. H.S." Mike showed Amy and Fred this note. Fred objected, saying that the Codes prohibit hiding such information. Amy said it probably will never be discovered. Answer the following questions:

1. What options do Mike, Amy, and Fred have in terms of the note? In your answer, discuss issue management theories and strategic management approaches.

2. What ethical system(s) describes the corporate culture at SC&W? Is this an example of Immoral Management, Moral Management, or Amoral Management, according to Lynn Sharp Paine's models? Explain.

Over the years, large business organizations have steadily reduced the number of layers in the organization structure. What purposes has this profound change in structure served? If you were the CEO of a large organization, would you want to share responsibility with a co-CEO? Why or why not? What can first-level and middle-level managers and team leaders to about shaping the culture of a firm? What can you tell about the organizational culture of a large retailer just by visiting a couple of the firm's stores? How can a manager tell whether an employee is resisting change? Describe how a business person could be an effective manager yet an ineffective leader. How would a leader know whether a given subordinate, or group of subordinates, is trustworthy enough to be empowered? Suppose that you as a manager found out that Jennifer, one of your team members, has a strong intrinsic motivation. What would you do with this information to motivate Jennifer to higher levels of performance? Some managers object to systematic approaches to motivating employees by expressing the thought, "Why should we go out of our way to motivate workers to do what they are paid to do?" What is your reaction to this objection?