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3; Ethics and Evolution
How to Get Here from There
ith the possible exception of lane Goodall, Frans
de Waal has done more than any other primatolo
gist to change our understanding of th
may mew Morality and the Distinctiveness
of Human Action
CHRISTINE M. KORSGAARD
What is different about the way we act that makes us, and
not any other species, moral beings?
Frans de Waal1
A moral being is one who is capable of comparing his pa
Aggregate Demand and Aggregate Supply
According to classical macroeconomic theory, changes in the money supply change nominal but not real
LOC: Aggregate demand and aggregate supply
Production and Growth
If per capita real income grows by 2 percent per year, then it will double in approximately 20 years.
LOC: Productivity and growth TOP:
The Monetary System
In an economy that relies on barter, trade requires a double-coincidence of wants.
LOC: The role of money
Joe wants to trade eggs for sausa
The Costs of Production
The economic field of industrial organization examines how firms decisions about prices and quantities
depend on the market conditions they face.
LOC: Costs of producti
Income Inequality and Poverty
The poverty line is set by the government so that 10 percent of all families fall below that line and are thereby
classified as poor.
LOC: The study of economics,
Monopolists can achieve any level of profit they desire because they have unlimited market power.
Even with market power, monopolists
Earnings and Discrimination
A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.
LOC: Labor markets
TOP: Compensating differentials
Markets sometimes fail to allocate resources efficiently.
LOC: Markets, market failure, and externalities
TOP: Market failure
When a transaction between a bu
Elasticity and Its Application
Elasticity measures how responsive quantity is to changes in price.
TOP: Price elasticity of demand
Measures of elasticity enh
Application: the Costs of Taxation
Total surplus is always equal to the sum of consumer surplus and producer surplus.
LOC: Supply and demand
TOP: Total surplus
Supply, Demand, and Government Policies
Economic policies often have effects that their architects did not intend or anticipate.
LOC: The study of economics and definitions of economics
Stocks and Their Valuation
Features of common stock
Determining common stock
Facts about common stock
Ownership implies control
Stockholders elect directors
Directors elect management
Risk and Rates of Return
Risk & return: CAPM / SML
The rate of return on an investment can be
calculated as follows:
(Amount received Amount invested)
Bonds and Their Valuation
Key features of bonds
What is a bond?
A long-term debt instrument in
which a borrower agrees to make
payments of principal and
interest, on specific dates, to the
The Cost of Capital
Sources of capital
Adjusting for flotation costs
Adjusting for risk
What sources of long-term
capital do firms use?
Long-Term Debt Preferred Stock Common Stock
Time Value of Money
Rates of return
Show the timing of cash flows.
Tick marks occur at the end of periods,
so Time 0 is today; Time 1 is the end
of the f
Key Financial Statements
Cash Flow, and Taxes
Statement of retained earnings
Statement of cash flows
Accounting income vs. cash
The annual report
Balance sheet provides a snapshot of
Financial Markets and
The Capital Allocation Process
Stock Markets and Returns
Stock Market Efficiency
The Capital Allocation
In a well-functioning economy, capital flows
Analysis of Financial
Du Pont system
Effects of improving ratios
Limitations of ratio analysis
Balance Sheet: Assets
Introduction to Financial
Forms of Businesses
Goals of the Corporation
Stock Prices and Intrinsic Value
Some Recent Trends
Conflicts Between Managers
Alternative Forms of
Determinants of interest
The term structure and
What four factors affect the
level of interest rates?
Locke's Goal Setting Theory
Understanding SMART Goal Setting
Goal setting is a powerful way of motivating people, and of motivating yourself. The value of goal setting is so well
recognized that e