CASE STUDIES

ECON-5102 - CRN 10161

MANAGERIAL ECONOMICS
Fall Semester, 2022
December 4, 2022

STUDENT ID NO: 7540 NAME: Guliyeva

Nazrin

Case Study 1
Musk calls time on 'forever' with ban on Twitter staff working from home
Authors: JOHNSTON, IAN; CRIDDLE CRISTINA

Case Analysis

The author discusses Elon Musk’s decision to bring employees back to work at the office. Musk states
that the reasoning behinds his decision is his belief that workers will be more productive working from
office and revenues will thereby go up (marginal utility – additional worker at office equals additional
revenue dollar). However, he doesn’t take into account that most workers might work more efficiently
from home. Additionally, workers might lose motivation to work with this additional pressure put on
them by Elon Musk. Workers with decreasing motivation would get less satisfaction from work they do
and decrease their productivity. Therefore, forcibly bringing more and more workers to the office would
additional worker add less to the total product than the previous worker (diminishing marginal
product).

https://www.proquest.com/docview/2748910603/3DFC87F51EC54892PQ/7?
accountid=148209

Case Study 2
End of 'tampon tax' benefited retailers more than women: Sanitary products
Authors: MCDOUGALL, MARY

Case Analysis

The article explores the effects of scrapping the ‘tampon tax’ on both sellers and consumers. Since
tampons and other sanitary products are necessity goods (consumer needs) their demand is inelastic,
meaning that even if their price increases demand for these goods will not decrease. However, taxing
those items creates massive distress among female population. Therefore, to protect consumers from
increasing prices the British government decided to abolish ‘tampon tax’. Consequently, with 5%
decrease in value added tax on sanitary items, their price fell by 1%. The debate now is over whether
cutting on taxes benefited consumers or sellers the more. Since demand is more inelastic than supply
tax burden shifts from consumers to sellers. In this case, when tax is abolished sellers are free from
carrying the tax burden. Consequently, with 5% decrease in tax on sanitary products, consumers are
better-off by 1% (decrease in price) whereas sellers are better off by 5% (decrease in tax burden carried
by sellers).
 https://www.proquest.com/docview/2748910252/3DFC87F51EC54892PQ/10?
accountid=148209

Case Study 3
Helping hand: Amazon launches cutting-edge warehouse robot in race to slash logistics costs
Authors: LEE, DAVE

Case Analysis

According to the article, Amazon launched a handling robot that detects, selects, and handle small items
to optimize its inventory management. Introducing this robot is supposed to decrease the company’s
implicit costs by enabling its employees to focus on more complex tasks and be more productive. It also
is supposed to increase Amazon’s accounting profit by decreasing its capital expenditure in logistics. In
the long run, company expects to create a system capable of handling a large variety of shapes, sizes, and
weight. This way Amazon will be able to decrease not its variable costs (salaries and wages) it incurs
during logistics, thereby decreasing its average variable costs while increasing output, but also its
marginal costs (costs of delivering one more unit of package).

https://www.proquest.com/docview/2748909937/3DFC87F51EC54892PQ/35?
accountid=148209

Case Study 4
Inflation analysis fails to mention profiteering: Letters

Authors: Financial Times

Case Analysis

The article discusses reasons for inflation in the world markets nowadays. According to the author,
inflation nowadays is not a result of wages or commodity inputs but rather profiteering or profit-taking.
Profit-taking, on the other hand is driven by lack of competition in the market, mergers and
consolidation. High supply of money in the market, i.e., Central Banks printing high volumes of money
and increased consumer spending, causes inflation to rise.

https://www.proquest.com/docview/2748909940/3DFC87F51EC54892PQ/89?
accountid=148209

Case Study 5
IBM counters China with Japanese chip partnership: Technology

Authors: INAGAKI, KANA; SUGIURA, ERI; LIU, QIANER

Case Analysis

Authors of the article describe how IBM partners with Japanese company to import advanced chips as a
result of tech war between USA and Japan.