Министерство образования РФ
Камский государственный политехнический институт
Кафедра иностранных языков
Папка для сдачи кандидатского минимума
по иностранному (английскому) языку
Выполнила: соискатель от кафедры ММИТЭ,
Шибанова Елена Владимировна
Специальность 351400
«Прикладная информатика в экономике»
Научный руководитель: доцент, к. ф.-м.н.
Смирнов Юрий Николаевич
Проверила: старший преподаватель
Ишмурадова Альфия Мухтаровна
г. Набережные Челны
2003 год
Содержание:
Содержание: 2
1. Текст для перевода на языке-оригинале 3
2. Перевод текста с языка оригинала 10
3. Словарь экономических терминов по специальности 18
4. Сочинение «Моя будущая научная работа» 35
5. Библиография 36
1. Текст для перевода на языке-оригинале
The firm and its objectives
We have now discussed the data which the firm needs for its decision-
making—the demand for its products and the cost of supplying them. But,
even with this information, in order to determine what decisions are
optimal it is still necessary to find out the businessman's aims. The
decision which best serves one set of goals will not usually be appropriate
for some other set of aims.
1. Alternative Objectives of the Firm
There is no simple method for determining the goals of the firm (or of
its executives). One thing, however, is clear. Very often the last person
to ask about any individual's motivation is the person himself (as the
psychoanalysts have so clearly shown). In fact, it is common experience
when interviewing executives to find that they will agree to every
plausible goal about which they are asked. They say they want to maximize
sales and also to maximize profits; that they wish, in the bargain, to
minimize costs; and so on. Unfortunately, it is normally impossible to
serve all of such a multiplicity of goals at once.
For example, suppose an advertising outlay of half a million dollars
minimizes unit costs, an outlay of 1.2 million maximizes total profits,
whereas an outlay of 1.8 million maximizes the firm's sales volume. We
cannot have all three decisions at once. The firm must settle on one of the
three objectives or some compromise among them.
Of course, the businessman is not the only one who suffers from the
desire to pursue a number of incompatible objectives. It is all too easy to
try to embrace at one time all of the attractive-sounding goals one can
muster and difficult to reject any one of them. Even the most learned have
suffered from this difficulty. It is precisely on these grounds that one
great economist was led to remark that the much-discussed objective of the
greatest good for the greatest number contains one "greatest" too many.
It is most frequently assumed in economic analysis that the firm is
trying to maximize its total profits. However, there is no reason to
believe that all businessmen pursue the same objectives. For example, a
small firm which is run by its owner may seek to maximize the proprietor's
free time subject to the constraint that his earnings exceed some minimum
level, and, indeed, there have been cases of overworked businessmen who, on
medical advice, have turned down profitable business opportunities.
It has also been suggested, on the basis of some observation, that
firms often seek to maximize the money value of their sales (their total
revenue) subject to a constraint that their profits do not fall short of
some minimum level which is just on the borderline of acceptability. That
is, so long as profits are at a satisfactory level, management will devote
the bulk of its energy and resources to the expansion of sales. Such a goal
may, perhaps, be explained by the businessman's desire to maintain his
competitive position, which is partly dependent on the sheer size of his
enterprise, or it may be a matter of the interests of management (as
distinguished from shareholders), since management's salaries may be
related more closely to the size of the firm's operations than to its
profits, or it may simply be a matter of prestige.
In any event, though they may help him to formulate his own aims and
sometimes be able to show him that more ambitious goals are possible and
relevant, it is not the job of the operations researcher or the economist
to tell the businessman what his goals should be. Management's aims must be
taken to be whatever they are, and the job of the analyst is to find the
conclusions which follow from these objectives—that is, to describe what
businessmen do to achieve these goals, and perhaps to prescribe methods for
pursuing them more efficiently.
The major point, both in economic analysis and in operations-research
investigation of business problems, is that the nature of the firm's
objectives cannot be assumed in advance. It is important to determine the
nature of the firm's objectives before proceeding to the formal model-
building and the computations based on it. As is obviously to be expected,
many of the conclusions of the analysis will vary with the choice of
objective function. However, as some of the later discussion in this
chapter will show, a change in objectives can, sometimes surprisingly,
leave some significant relationships invariant. Where this is true, it is
very convenient to find it out in advance before embarking on the
investigation of a specific problem. For if there are some problems for
which the optimum decision will be the same, no matter which of a number of
objectives the firm happens to adopt, it is legitimate to avoid altogether
the difficult job of determining company goals before undertaking an
analysis.
2. The Profit-Maximizing Firm
Let us first examine some of the conventional theory of the profit-
maximizing firm. In the chapter on the differential calculus, the basic
marginal condition for profit maximization was derived as an illustration.
Let us now rederive this marginal-cost-equals-marginal-revenue condition
with the aid of a verbal and a geometric argument.
The proposition is that no firm can be earning maximum profits unless
its marginal cost and its marginal revenue are (at least approximately)
equal, i.e., unless an additional unit of output will bring in as much
money as it costs to produce, so that its marginal profitability is zero.
It is easy to show why this must be so. Suppose a firm is producing
200,000 units of some item, x, and that at that output level, the marginal
revenue from x production is $1.10 whereas its marginal cost is only 96
cents. Additional units of x will, therefore, each bring the firm some 14
cents = $1.10 — 0.96 more than they cost, and so the firm cannot be
maximizing its profits by sticking to its 200,000 production level.
Similarly, if the marginal cost of x exceeds its marginal revenue, the firm
cannot be maximizing its profits, for it is neglecting to take advantage of
its opportunity to save money—by reducing its output it would reduce its
income, but it would reduce its costs by an even greater amount.
We can also derive the marginal-cost-equals-marginal-revenue
proposition with the aid of Figure 1. At any output, OQ, total revenue is
represented by the area OQPR under the marginal revenue curve (see Rule 9
of Chapter 3). Similarly, total cost is represented by the area OQKC
immediately below the marginal cost curve. Total profit, which is the
difference between total revenue and total cost is, therefore, represented
by the difference between the two areas—that is, total profits are given by
the lightly shaded area TKP minus the small, heavily shaded area, RTC. Now,
it is clear that from point Q a move to the right will increase the size of
the profit area TKP. In fact, only at output OQm will this area have
reached its maximum size—profits will encompass the entire area TKMP.
But at output OQm marginal cost equals marginal revenue—indeed, it is
the crossing of the marginal cost and marginal revenue curves at that point
which prevents further moves to the right (further output increases) from
adding still more to the total profit area. Thus, we have once again
established that at the point of maximum profits, marginal costs and
marginal revenues must be equal.
Before leaving the discussion of this proposition, it is well to
distinguish explicitly between it and its invalid converse. It is not
generally true that any output level at which marginal cost and marginal
revenue happen to be equal (i.e., where marginal profit is zero) will be a
profit-maximizing level. There may be several levels of production at which
marginal cost and marginal revenue are equal, and some of these output
quantities may be far from advantageous for the firm. In Figure 1 this
condition is satisfied at output OQt as well as at OQm. But at OQt the firm
obtains only the net loss (negative profit) represented by heavily shaded
area RTC. A move in either direction from point Qt will help the firm
either by reducing its costs more than it cuts its revenues (a move to the
left) or by adding to its revenues more than to its costs. Output OQt is
thus a point of minimum profits even though it meets the marginal profit-
maximization condition, "marginal revenue equals marginal cost."
This peculiar result is explained by recalling that the condition,
"marginal profitability equals zero," implies only that neither a small
increase nor a small decrease in quantity will add to profits. In other
words, it means that we are at an output at which the total profit curve
(not shown) is level—going neither uphill nor downhill. But while the top
of a hill (the maximum profit output) is such a level spot, plateaus and
valleys (minimum profit outputs) also have the same characteristic—they are
level. That is, they are points of zero marginal profit, where marginal
cost equals marginal revenue.
We conclude that while at a profit-maximizing output marginal cost
must equal marginal revenue, the converse is not correct—it is not true
that at an output at which marginal cost equals marginal revenue the firm
can be sure of maximizing its profits.
3. Application: Pricing and Cost Changes
The preceding theorem permits us to make a number of predictions about
the behavior of the profit-maximizing firm and to set up some normative
"operations research" rules for its operation. We can determine not only
the optimal output, but also the profit-maximizing price with the aid of
the demand curve for the product of the firm. For, given the optimal
output, we can find out from the demand curve what price will permit the
company to sell this quantity, and that is necessarily the optimal price.
In Figure 1, where the optimal output is OQm we see that the corresponding
price is QmPm where point Pm is the point on the demand curve above Qm
(note that Pm is not the point of intersection of the marginal cost and the
marginal revenue curves).
It was shown in the last section of Chapter 4 how our theorem can also
enable us to predict the effect of a change in tax rates or some other
change in cost on the firm's output and pricing. We need merely determine
how this change shifts the marginal cost curve to find the new profit-
maximizing price-output combination by finding the new point of
intersection of the marginal cost and marginal revenue curves. Let us
recall one particular result for use later in this chapter—the theorem
about the effects of a change in fixed costs. It will be remembered that a
change in fixed costs never has any effect on the firm's marginal cost
curve because marginal fixed cost is always zero (by definition, an
additional unit of output adds nothing to fixed costs). Hence, if the
profit-maximizing firm's rents, its total assessed taxes, or some other
fixed cost increases, there will be no change in the output-price level at
which its marginal cost equals its marginal revenue. In other words, the
profit-maximizing firm will make no price or output changes in response to
any increase or decrease in its fixed costs! This rather unexpected result
is certainly not in accord with common business practice and requires some
further comment which will be supplied presently.
4. Extension: Multiple Products and Inputs
The firm's output decisions- are normally more complicated, even in
principle, than the preceding decisions suggest. Almost all companies
produce a variety of products and these various commodities typically
compete for the firm's investment funds and its productive capacity. At any
given time there are limits to what the company can produce, and often, if
it decides to increase its production of product x, this must be done at
the expense of product y. In other words, such a company cannot simply
expand the output of x to its optimum level without taking into account the
effects of this decision on the output of y.
For a profit-maximizing decision which takes both commodities into
account we have a marginal rule which is a special case of Rule 2 of
Chapter 3:
Any limited input (including investment funds) should be allocated
between the two outputs x and у in such a way that the marginal profit
yield of the input, i, in the production of x equals the marginal profit
yield of the input in the production of y.
If the condition is violated the firm cannot be maximizing its
profits, because the firm can add to its earnings simply by shifting some
of г out of the product where it obtains the lower return and into the
manufacture of the other.
Stated another way, this last theorem asserts that if the firm is
maximizing its profits, a reduction in its output of x by an amount which
is worth, say, $5, should release just exactly enough productive capacity,
C, to permit the output of у to be increased $5 worth. For this means that
the marginal return of the released capacity is exactly the same in the
production of either x or y, which is what the previous version of this
rule asserted.3
Still another version of this result is worth describing: Suppose the
price of each product is fixed and independent of output levels. Then we
require that the marginal cost of each output be proportionate to its
price, i.e., that [pic]where Px and MCX are, respectively, the price and
the marginal cost of x, etc.
In this discussion we have considered only the output decisions of a
profit-maximizing firm. Of course, the firm has other decisions to make. In
particular, it must decide on the amounts of its inputs including its
marketing inputs (advertising, sales force, etc.). There are similar rules
for these decisions, as discussed in Chapter 11 and in Chapter 17, Section
6. The main result here is that profit maximization requires for any inputs
г and j
[pic]where MPt represents the marginal profit contribution of input г
and Pi is its price, etc.
Having discussed the consequences of profit maximization, let us see
now what difference it makes if the firm adopts an alternative objective,
one to which we have already alluded — the maximization of the value of its
sales (total revenue) under the requirement that the firm's profits not
fall short of some given minimum level.
5. Price-Output Determination: Sales Maximization
Saks maximization under a profit constraint does not mean an attempt
to obtain the largest possible physical volume (which is hardly easy to
define in the modern multi-product firm). Rather, it refers to maximization
of total revenue (dollar sales) which, to the businessman, is the obvious
measure of the amount he has sold. Maximum sales in this sense need not
require very large physical outputs. To take an extreme case, at a zero
price physical volume may be high but dollar sales volume will be zero.
There will normally be a well-determined output level which maximizes
dollar sales. This level can ordinarily be fixed with the aid of the well-
known rule that maximum revenue will be obtained only at an output at which
the elasticity of demand is unity, i.e., at which marginal revenue is zero.
This is the condition which replaces the "marginal cost equals marginal
revenue" profit-maximizing rule.
But this rule does not take into account the profit constraint. That
is, if at the revenue-maximizing output the firm does, in fact, earn enough
or more than enough profits to keep its stockholders satisfied then it will
want to produce the sales-maximizing quantity. But if at this output
profits are too low, the firm's output must be changed to a level which,
though it fails to maximize sales, .does meet the profit requirement.
We see, then, that two types of equilibrium appear to be possible: one
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