NEW! Revised Chapter 15. Chapter 15 has a brand new in-depth case study regarding the Time Warner/America Online merger. The case includes Instructor CD data and serves as a capstone for the book, allowing instructors who want students to focus on real-world issues to do so once they've learned the theoretical tools presented earlier in the book. The chapter is Harvard case-like in its level of detail, but presents the material in a more directed manner. Chapter 15 includes numerous "business memos" that outline a problem or decision that must be made, and ask students to then make sound business choices based on the materials at hand. Such real-world emphasis on applying theory makes the 5th edition an even greater asset for students and instructors.
NEW! Expanded Website Content. Web quizzes, lecture PowerPoints, key terms, and additional Inside Business box materials can now be found on the free student book site. The website also continues to offer many retained features for both students and instructors, including custom-designed cases prepared by the author to bring the text to life. http://www.mhhe.com/economics/baye5e
NEW! More Internet-Relevant Issues in the text. The author has published well-quoted research regarding how businesses can run more effectively by taking advantage of technologies.
NEW! Expanded Coverage of Porter's Five Forces. Additional material regarding Porter's Five Forces is now available in Chapter 1 for those instructors that wish to cover this topic in more detail than previous editions allowed.
NEW! Updated Problem Material. Baye's Fifth Edition provides demonstration problems, global applications and issues material, and 20 percent of the problems in the book are new.
Focus on Business Strategy. Baye not only provides the Economic Foundations of Business Strategy, but also includes Advanced Topics in Business Strategy. Chapter 13, Advanced Topics in Business Strategy, covers such topics as the economics of networks, predatory pricing, new product pricing, limit pricing, and foreclosure. This chapter better prepares students by covering today's issues facing managers.
Full Coverage of the Economics of Information. Managers seldom have full information to guide their decisions. Chapter 12 equips managers with the tools needed to make decisions in environments of imperfect or asymmetric information. Material shows students how screening, signaling, self-selection devices, and incentive mechanisms can be used to mitigate problems caused by asymmetric information (such as moral hazard and adverse selection). The material on auctions also explains the optimal bidding strategies in auctions with both independent private values and affiliated (or correlated) value estimates. Auctions are important for managers to understand, as often firms participate either as the auctioneer or as a bidder.
Links to Other Business Disciplines. The text illustrates important links between managerial economics and other business disciplines. These links include Porter's Five Forces Model, pricing rules, advertising, and other concepts emphasized in courses in Corporate Strategy, Marketing, Managerial Accounting, and Management. These links allow the students to see how microeconomics and game theory are used to shape business strategy.
Data CD. Each textbook includes a Data CD that contains files to help students get hands-on experience at making economic decisions. These files include (1) new data for regression problems, (2) spread sheet versions of key tables in the book to enable students to see how key economic concepts - like marginal cost and profit-maximization - can be implemented on standard spreadsheets, and (3) spreadsheet macros that students can use to find the optimum price and quantity under a variety of market settings, including monopoly, Cournot oligopoly, and Stackelberg oligopoly, and (4) "Mini Cases" that outline real-world dilemmas that have been faced by firms such as Microsoft, NASDAQ, American Airlines, and Visa. This learning CD reinforces the empirical business decision making skills learned in the textbook.
Headlines begin each chapter with a real-world economic problem. These problems motivate students to better understand the chapter material. By consulting the end of chapter answers (Answering the Headline), they learn basic economic thinking.
Demonstration Problems are interspersed in each chapter with answers following the problem. Students enjoy the instant feedback gained from these problems and verification of material mastery.
Inside Business boxes illustrate real-world applications of theory developed in the chapter; these are drawn from both current economic literature and the popular press.
Calculus and Non-Calculus Alternatives. While Baye does not require calculus, the design allows the user to include some calculus based material if desired. Following each algebraic principle or formula is a clearly marked calculus alternative; these are labeled in the text margins. The calculus alternatives state the preceding principle or formula in calculus notation and explain the relation between the two formulas. There are also four calculus-based chapter appendices. Professors have the option to use more sophisticated mathematics should the students have the proper background.
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2006 McGraw-Hill Higher Education