Henry Rachllin Portfolio

Freberg Discovering Biological Psychology 2e 2010Cengage Learning

HENRY RACHLIN • BOOK DESIGN • 88 PARK AVENUE • ARLINGTON, MA • 02476 • [email protected]

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1Photo Title

Why is it that you can’t tickle yourself?

Researchers using a brain-imaging technique believe

they have the answer.

I N T R O D U C T I O N

YOU HAVE PROBABLY HEARD THE POPULAR EXPRESSION, “YOU ONLY use 10 percent of your brain.” This little bit of misinformation has become part

of our popular culture. It certainly would be nice to think that we all had a large chunk of brain awaiting more extensive use, perhaps for use in extrasensory per-ception (ESP) or in surviving those upcoming final exams.

We’re not really sure where the 10 percent myth originated. Some writers blame the work of Pierre Flourens, described later in this chapter. Perhaps by showing that animals could still perform many functions with large parts of their brains surgically removed, Flourens’s work may have led to the perception that all those parts really weren’t necessary after all. Other authors suggest that mis-quotes of statements made by Albert Einstein and the philosopher/psychologist William James may be the original source of the myth.

Regardless of the exact origin of the 10 percent myth, we know today that it is categorically false. Some of the new techniques discussed in this chapter for imaging the brain show that separate parts of the brain may become more active during different tasks but that each has its particular role to play. From an evolu

Introducing Biological Psychology

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L E A R N I N GO B J E C T I V E S

biological psychology An interdisciplinary area of study involving psychology, biology, physiology, biochemistry, the neural sciences, and related fields.

After reading this chapter, you should be able toLO1 Define biological psychology.

LO2 Trace the major histori-cal highlights in the study of the brain and nervous system.

LO3 Describe the major fea-tures of histological methods.

LO4 Distinguish between the imaging techniques of CT, PET, MRI, and fMRI.

LO5 Describe the use of EEG, MEG, evoked potentials, sin-gle-cell recording, and patch clamp methods.

LO6 Describe the use of stim-ulation and lesion methods.

LO7 Summarize the methods used to assess the biochemis-try of the nervous system.

LO8 Identify the contri-butions made by studies involving twins, adoptions, and genetically engineered research animals to our under-standing of the genetics of the nervous system and behavior.

LO9 Summarize the major ethical concerns regarding the use of human participants and animal subjects.

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tionary standpoint, it seems unlikely that we would bother to evolve structures that did not contribute directly to our chances of survival. The human brain con-tains 5 percent of the body’s mass, but it gobbles up 20 percent of its glucose and oxygen resources. It wouldn’t seem sensible to build such an expensive structure and then leave it virtually unused. Finally, observations of patients with brain dam-age show that even small injuries, such as those caused by a concussion, can have a detrimental effect on brain functioning. A person who experienced damage to 90 percent of the brain would likely be dead or, at a minimum, unable to emerge from a coma.

Although it may be disappointing to you to see the 10 percent myth debunked, we suspect that this course in biological psychology will leave you with an enormous amount of respect for the real, scientifically demonstrated capacities of this remark-able organ, the human brain.

Biological Psychology as an Interdisciplinary Field

Biological psychology is defined as an interdisciplinary area of study involving psychology, biology, physiology, biochemistry, the neural sciences, and related

fields (Online Medical Dictionary, 2000). Researchers are specifically interested in the relationships between the actions of the nervous system and observable behavior. In this text, the topics explored will range from sleep to sexuality, from emotions to learning, from hunger to psychopathology. In each of the topic areas, you will see that the relationship between biology and behavior is circu tha team) drives biology (testosterone levels).

Highlights in the Biological Psychology Timeline

In today’s world, we take for granted that the brain and nervous system are the sourc-es of intellect, reason, sensation, and movement. This disarmingly simple fact has

not been universally accepted throughout human history. Although some ancient observers came very close to the truth, periods of enlightenment were interspersed with periods of remarkable misunderstandings.

Our earliest ancestors apparently had at least a rudimentary understanding about the brain’s essential role in maintaining life. Archaeological evidence of brain surgery suggests that as long as 7,000 years ago, people tried to cure others by drilling holes in the skull. The results of one such operation are shown in Figure 1.1. Because some skulls have been located that show evidence of healing following the drilling procedure, known as trephining or trepanation, we can assume that the patient lived through the procedure and that this was not a postmortem ritual. What is less clear is the intent of such surgeries. Possibly, these early surgeons hoped to release demons or relieve feelings of pressure.

Based on Egyptian texts believed to be at least 5,000 years old, the Edwin Smith Surgical Papyrus represents the oldest known medical writing in history (Breasted, 1930). In general, the Egyptians did not seem to view the brain as an important structure. During mummification, the brain was removed through the nostrils and replaced with rosin. Nonetheless, the Edwin Smith Surgical Papyrus contains a num-ber of rather modern-sounding observations regarding the structure and function of of rather modern-sounding observations regarding the structure and function of the

Biological Psychology as an Interdisciplinary FieldHighlights in the Biological Psychology TimelineInterim Summary 1.1■ WHY DOES THIS MATTER?

New Ethical Challenges Regarding Stem Cell Research

Research Methods in Biological Psychology

HistologyAutopsyImagingRecordingStimulationLesionPharmacological MethodsGenetic Methods

Interim Summary 1.2Research Ethics

Human Participants GuidelinesThe Ethics of Research on the

InternetAnimal Subjects Guidelines

Interim Summary 1.3■ NEW DIRECTIONS

New Ethical Challenges Regarding Stem Cell Research

Thought Questions Key Terms

C H A P T E RO U T L I N E

Bernstein Psychology 8e 2009Cengage Learning


8 ● CHAPTER 1 Introducing Psychology

take advantage of analogies, we must first recognize the similarities between currentand previous problems and then recall the solution that worked before. Most peopleare surprisingly poor at recognizing such similarities (Anderson, 2000). They tend toconcentrate on the surface features that make problems appear different.

Locating Analogical Thinking

The value of using analogies in problem solving was beautifully illustrated afterthe Hubble Space Telescope was placed in orbit around the Earth in 1990. It

was designed to take detailed photographs of distant galaxies, but because its mainmirror was not focusing light properly, the pictures were blurry. Then NASA engi-neer James Crocker happened to notice the way a hotel room showerhead pivoted,and it gave him the idea for a system of movable mirrors to correct for the flaw inthe Hubble’s mirror. When shuttle astronauts installed these mirrors in 1993, theproblem was solved (Stein, 1993).

� What was the researchers’ question?Charles Wharton and his colleagues wanted to know what goes on in the brainwhen people do this kind of analogical mapping—recognizing similarities betweenthings that appear to be different and even unrelated (Wharton et al., 2000).

� How did the researchers answer the question?The researchers knew that PET scan technology could show brain activity while par-ticipants performed an analogy task, but how could the researchers separate theactivity associated with analogical mapping from everything else going on in the brain at the same time? Their answer was to use a subtraction technique. Theyasked people to perform two tasks—one after the other—that involved makingcomparisons between patterns of rectangles, ovals, triangles, and other shapes. Bothtasks placed similar demands on the brain, but only one of them required the par-ticipants to make analogies between the patterns (see Figure 8.10). �

This time, Gatiss and his landlord called the Royal Society for thePrevention of Cruelty to Animals (RSPCA), whose inspectors heard the kittenin distress and asked the fire brigade to return. They spent the next three dayssearching for the cat. First, they tore down parts of the kitchen walls and rippedup the floorboards. Next, they called in plumbing and drainage specialists, whoused cables tipped with fiber-optic cameras to search remote cavities where a kit-ten might hide. Rescuers then brought in a disaster search team, which tried to findthe kitten using acoustic and ultrasonic equipment designed to locate victimstrapped in the debris of earthquakes and explosions. Not a sound could be heard.Increasingly concerned about how much longer the kitten could survive, the firebrigade tried to coax it from hiding with the finest-quality fish, but to no avail.Suddenly, there was a burst of “purring,” which to everyone’s surprise (and thelandlord’s dismay), the ultrasonic equipment traced to the clock in the electricoven! Later, the landlord commented that everyone had assumed that Gatiss’shypothesis was correct—that the meowing sound came from a cat trapped some-where in the kitchen. “I just let them carry on. If there is an animal in there, youhave to do what it takes. The funniest thing was that it seemed to reply when wecalled out to it” (London Daily Telegraph, 1998).

Often, people begin to solve a problem with only a vague notion of whichhypotheses to test. Suppose you heard a strange sound in your kitchen. It couldbe caused by several things, but which hypotheses should you test, and in whatorder?

FIGURE 8.10Comparing Stimulus Patterns

The top row shows an example of thestimulus patterns that were compared inan analogy task. Participants had to saywhether the pattern on the right is similar,or analogous, to the one on the left. (Inthis case it is, because even though thespecific shapes used in one pattern differfrom those in the other pattern, their shad-ing and physical arrangement are similar.)The bottom row shows an example of thepatterns that were compared in a “same-different” task. Here, participants wereasked only to decide whether the twopatterns are exactly the same (Whartonet al., 2000).

TRY THIS

FOCUS ON RESEARCH METHODS

Introducing Psychology

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.... Our goal in this opening chapter is to give you an overview of

psychology and its subfields and to show how psychology’s sub-fields are linked to one another and to other subjects, such as economicsand medicine. We then tell the story of how psychology came to be and thevarious ways in which psychologists approach their work. We have organizedthe chapter as follows:

Basic Functions of Thought000

The Circle of ThoughtMeasuring Information Processing

Mental Representations: TheIngredients of Thought 000ConceptsPropositionsSchemas, Scripts, and MentalModels

Images and Cognitive Maps

Thinking Strategies 000Formal ReasoningInformal Reasoning

Problem Solving 000Strategies for Problem Solving

FOCUS ON RESEARCH METHODS

Locating Analogical ThinkingObstacles to Problem SolvingBuilding Problem-Solving SkillsProblem Solving by Computer

Decision Making 000Evaluating OptionsBiases and Flaws in Decision MakingNaturalistic Decision Making

LINKAGES: Group Processes in Problem Solving and DecisionMaking

Language 000The Elements of LanguageUnderstanding SpeechThe Development of LanguageHow Is Language Acquired?

THINKING CRITICALLY: CanNonhumans Use Language?

Culture, Language, andThought 000LINKAGES

SUMMARY

1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rosenberg Introduction to General and Organic Chemistry ©2007Houghton Mifflin


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In this chapter, we will look at the elements that make up

matter, group them according to their reactivity, and arrange this

information in the periodic table. We will then examine the structure

of the atom to better understand the periodic table. The chapter

concludes with two important areas of medicine that are based on

the nucleus of the atom, magnetic resonance imaging (MRI) and

nuclear medicine.

2.1 Elements I. Definitions and Isolation (p. 000)

2.2 Elements II. Names and Symbols (p. 000)

2.3 Elements III. Properties and the Periodic Table (p. 000)

2.4 Atoms I. The Nucleus (p. 000)

2.5 Atoms II. The Electrons (p. 000)

2.6 The Periodic Table and ElectronConfiguration (p. 000)

2.7 Magnetic Resonance Imaging (p. 000)

2.8 Nuclear Chemistry (p. 000)

2.9 Nuclear Medicine (p. 000)

� HEALTH CONNEC T ION: Radon Gas (p. 000)

An MRI (magnetic resonance imag-ing) scan of the human cardio-pul-mony system. The Periodic Table,

Atomic Structure, andNuclear Chemistry

L E A R N I N G G OA L S

� To learn the difference between amixture and a pure substance.

� To learn the difference between acompound and an element.

� To learn the difference between amixture and a compound.

L E A R N I N G G OA L S

� To learn the names and symbols ofthe most common elements.

� To learn which elements areimportant in living systems.

2.1 Elements I. Definitions and Isolations

In chapter 1, we introduced the terms element and compound. In this section,we will see how these words can be related to common forms of matter such as

salt water, air, and blood. Not one of the examples listed above is an element or acompound. Instead, each one is a mixture, a blend of two or more substances. Amixture has the properties of its components. Salt water looks like water andtastes like salt. Importantly, the components of a mixture can be separated fromone another while maintaining their chemical identities. The salt and water in saltwater can be separated from each other by boiling. If a substance cannot be sep-arated into components without undergoing a chemical change, then it is said tobe pure. Salt and water are both pure substances.

Unlike a mixture, a pure substance has a uniform composition. This meansthat each microscopic drop of pure water is exactly the same. A pure substancealso has uniform properties. This means that every sample of pure water is thesame, whether it is from the US or Antarctica. In simpler terms, a pure substanceis just one thing.

A pure substance can be either an element or a compound, alternatives thatcannot be distinguished by PHYSICAL means. CHEMICALLY, compounds can beseparated into simpler substances known as elements. Unlike the separation ofa mixture into its components, the separation of a compound into elementsinvolves a change in chemical composition. For example, passing an electric cur-rent through the compound water yields hydrogen and oxygen. These two sub-stances have different chemical properties than water: Hydrogen is flammable.Oxygen tarnishes metals. Water is in-flammable. Hydrogen and oxygen are bothelements as they cannot be separated by chemical means into simpler sub-stances. Later in section 2.4, we will generate a more rigorous definition of theword element.

2.2 Elements II. Names and Symbols

As each new element was discovered it was given a name, usually by itsfounder. Elements were named after colors (rubidium-ruby, rhodium-rose),

planets (mercury, uranium, and plutonium), people (einsteinium, nobelium),places (germanium, francium, americium), mythological figures (thorium, prome-thium), and their chemical properties (hydrogen-water producing, oxygen-acidproducing).

For each element there is a corresponding one or two letter abbreviation knownas its chemical symbol. The first letter of a chemical symbol is always capitalized.Any subsequent letter is in lowercase. It is important to follow this notation to avoidconfusion: 1) while Co is the symbol for a metal, CO is the formula for a toxic gas, 2)No is a radioactive metal while NO is the formula for a common air pollutant.

It is worthwhile for students to learn the chemical symbols for the more com-mon and important elements. In many cases, this is straightforward, as the Englishname and the chemical symbol are based on the same word, such as O for oxygenand N for nitrogen. In a few select and well known exceptions, Latin names formthe basis of the abbreviations, including copper (Cu), gold (Au), iron (Fe), lead

2 CHAPTER 00 Chapter Title

A sapphire Impurities aren’t necessarily bad.

� FIGURE 2.1Mixture to Pure to Element to Compound

Several of the most recently produced arti-ficial elements have three letter symbols.

mixture a blend of two substances

pure characteristic of a substance thatcannot be divided into components with-out a chemical change

chemical symbol a one or two letterabbreviation for an element

FPO FPO FPO FPO

Koch So, You Want to Be a Teacher ©2007Houghton Mifflin


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FOCUSING QUESTIONS◗ Why do you think most teachers enter the field?

◗ What do you think ae the most exciting aspects of teaching?

◗ What might be the most difficult challenges for teachers?

◗ Who do you suppose offers teachers the most support?

This chapter gives you a glimpse at the ways in which teachers from

grades K–12 make their decisions to enter the field and what they

experience as the most exciting andchallenging aspects of teaching.

Their stories are designed to help you explore what Parker Palmer

(1998) calls the “inner landscape of a teacher’s life.”

CHAPTER 2Teaching Stories


■ Pearl, Amanda, and Jessica talk about the excitement of reaching the chil-dren and recognizing that they “got it” as it related to new knowledge con-struction. Pearl gets so immersed in the activities with her students that sheforgets to take a bathroom break.

■ These teachers, typical of most, work actively on their preparation forteaching and are constantly challenging themselves to come up with novelways to engage students in their own learning. They remind me that “toteach is to learn.” Pearl illustrates this idea when she explains her ownprocess in solving a difficult mathematics problem as a learner and thengoing through it again as a teacher.

WRITING and REFLECTION

How Do You Feel About Teaching and Learning?

� Why do you think that Amanda is not very excited when the students allget 100 percent on a test?

� When Jessica states that the best times are when students “uncover newmeaning” on their own, what do you think she means?

� Do you remember an “ah-hah” moment as a student? Can you describe it?

� What do you anticipate as the most exciting part of teaching?

The One-Room SchoolhouseOne-room schoolhouses dotted the American landscape for over a century.These early schools had one teacher for all the children, regardless of age.There is a wealth of knowledge about these early schools. You may be sur-prised to learn that some lasted well into the twentieth century, especiallyin more rural areas.

Explore and describe a one-room schoolhouse. Where was it? How manychildren did it serve? What is its history? What type of curriculum did ithave? Would you have liked to attend this school? Why or why not?

Early SchoolbooksGenerations of colonial students learned their alphabet from a device calleda hornbook. Older students used the New England Primer and theMcGuffey Readers, among other schoolbooks. Explore these early materialsand describe their uses for students and teachers.

Many of today’s educational practices began when the country wasyoung. For example, local control, compulsory education, and tax-support-ed schools are premises of today's public schools, and you have seen in thischapter how early they originated.

Then and NowMany of the early conflicts exist today as well. Issues concerning race, socialclass, and gender inequities are evident in the disparities between today’surban, suburban, and rural schools. Select one issue that dates back toAmerica’s early years and describe the ways in which it is reflected in the dif-ferences among modern-day urban, suburban, and rural schools.

LEARNING PROJECT

Kirk Educating Exceptional Children 12e ©2007Houghton Mifflin


F O C U S Q U E S T I O N S

How are learning disabilities,dyslexia, and attentionsdeficits defined?

What are the specific chal-lenges faced by individualswith learning disabilities and attention deficit hyper-activity disorders?

How does the InformationProcessing Model help us understand learning disabilities?

What teaching/learningstrategies work well for students with learning disabilities?

What technology is avail-able to support academiclearning?

How does having a child with learning disabilitiesimpact the family?

Children with Learning Disabilities1

C H A P T E R

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Defining Learning Disabilities

to use his strength in art to bolster his self-esteem and build more socialsupport his peers.

Both Jason and Ray have learning disabilities and yet each is unique intheir combination of strengths and challenges. Because of these differ-ences each student with learning disabilities will need an individualizededucational program, an IEP, to support his, or, her success in school.Later in the chapter we will explore how teachers and parents can worktogether with the child to promote success, but first we will take a look athow learning disabilities are defined by law.

IT has been over thirty years since Samuel Kirk used the term “LearningDisabilities” to describe children who despite average, or, above intelligence

seemed to be encountering problems with school (Coleman, Buysse, Neitzel2006). At that time Kirk believed that these children would likely be a verysmall subset of children with disabilities. Little did we know that childrenwith learning disabilities would become the largest group of students servedby our special education programs. Current estimations indicate that 48% ofthe school aged children who receive special education are labeled as “LD”(U.S. Department of Education, 2005).

One possible explanation for the expansion is the way we have de-fined learning disabilities. The Federal Register (2004) gives us the follow-ing definition:

SEC. 602. DEFINITIONS. 29) SPECIFIC LEARN-ING DISABILTIY.-

(A) IN GENERAL.- The term ‘specific learn-ing disability’ means a disorder in 1 or 2 moreof the basic psychological processes involvedin understanding or in using language, spoken,or written, which disorder may manifest itselfin the imperfect ability to listen, think, speak,write, spell, or do mathematical calculations.

(B) DISORDERS INCLUDE.- Such termincludes such conditions as perceptual disabil-ities, brain injury, minimal brain dysfunction,dyslexia, and developmental aphasia.

This is a theoretical definition and must be"operationalized" to help us actually identify stu-dents with learning disabilities. To operationalizethis definition most states developed formulas thathinged on the discrepancies between intellectualabilities (IQ) and achievement, and/or, perform-ance. The magnitude of these discrepancies wasthought to indicate the degree of underlying dis-

Families of exceptional children play an important role in

early intervention. Parents can teach their children some of

the skills and learning tools that will later be reinforced in a

school setting.

© Peter Hvizdak/The Image Work

C H A P T E R

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LEARNING OBJECTIVES

1. Compare and contrastjob costing and processcosting.

2. Identify how productcosts flow throughaccounts using processcosting.

3. Understand the conceptof an equivalent unit.

4. Use four steps to assigncosts to products usingthe weighted averagemethod.

5. Prepare a productioncost report for a processing departmentwith no transferred-incosts.

6. Prepare a productioncost report for a processing departmentwith transferred-incosts.

7. Assign costs to productsusing the first-in-first-out method (Appendix4.1).

ImplementingProcess Costing

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ANN WATKINS operates a company that produces wood desks usedin classrooms throughout the world. Ann’s company, Desk ProductsIncorporated, maintains a competitive advantage over other similar compa-nies by producing one particular desk in large quantities—4,000 to 8,000desks per month—using a design that is universally accepted. This enablesthe company to buy materials in bulk, often leading to volume price dis-counts from suppliers. Because the exact same desk is produced for all cus-tomers, wood materials are purchased pre-cut from suppliers. As a result,Desk Products can limit the production process to two processing depart-ments—Assembly and Finishing. The Assembly Department requisitionspre-cut materials and hardware from the raw materials storeroom, assem-bles each desk, and moves the assembled desks to the Finishing Department.The Finishing Department sands and paints each desk, and moves complet-ed desks to the finished goods warehouse.

A new competitor recently began production of a similar desk and Annis concerned about whether Desk Products’ pricing is reasonable. AlthoughAnn’s company has a strong record of profitability, she does not have a clear picture of how low prices can go before the desks become unprofitable. She talks with the accountant of Desk Products, JohnFuller, to investigate.

Ann: John, as you know, we have a new competitor that is aggressively going after our customers. It looks like we will have to lower prices to compete. It would help if I knew the cost of each desk produced.

John: Although we don’t track production costs for each individual desk, we do track costs for batches of desks as they go through the two production departments—Assembly and Finishing.

Ann: We are able to track costs for each department?

John: Yes!

Ann: This would really help in looking at our efficiency in each depart-ment, particularly if cost cuts are needed to remain competitive.

John: We use a process costing system that assigns costs to each batch of desks produced, and results in a cost per unit as the products move through the Assembly Department and Finishing Department.

Ann: Excellent! Can you get me this cost information for last month?

John: Sure, I’ll put together a production cost report for you by the end of the week.

Desk Products Inc. is used as an example throughout the chapter to explainhow process costing systems work.

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Heisinger Managerial Accounting ©2010Cengage Learning


Needles Financial Accounting ©2007Houghton Mifflin


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Kennedy The American Pageant 12e ©2009Cengage Learning


Embattled France, its hands full in Europe, wanted no war. An out-

witted Talleyrand realized that to fight the United States would merely add one more foe to his enemy roster. The British, who were lending the Ameri-cans cannon and other war supplies, were actually driven closer to their wayward cousins than they were to be again for many years. Talleyrand therefore let it be known, through roundabout channels, that if the Americans would send a new minister, he would be received with proper respect.

This French furor brought to Adams a degree of personal acclaim that he had never known before—and was never to know again. He doubtless perceived that a full-fledged war, crowned by the conquest of the Floridas and Louisiana, would bring new plaudits to the Federalist party—and perhaps a second term to himself. But the heady wine of popularity did not sway his final

judgment. He, like other Founding Fathers, realized full well that war must be avoided while the country was relatively weak.

Adams unexpectedly exploded a bombshell when, early in 1799, he submitted to the Senate the name of a new minister to France. Hamilton and his war-hawk faction were enraged. But public opinion—Jeffer-

sonian and reasonable Federalist alike—was favorable to one last try for peace. America’s envoys (now three) found the political skies brightening when they reached Paris early in 1800. The ambitious “Little Corporal,” the Corsican Napoleon Bonaparte, had recently seized dic-tatorial power. He was eager to free his hands of the American squabble so that he might continue to redraw the map of Europe and perhaps create a New World empire in Louisiana. The afflictions and ambitions of the Old World were again working to America’s advan-

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Republicanism Triumphant Artists often used classical motifs to celebrate the triumph

in America of republicanism—a form of government they traced back to ancient Greece and Rome.

Building theNew Nation

1776–1860

PART

TWO Mapping the New Continentassume the debts of the states, totaling some $21.5 mil-lion.The secretary made a convincing case for “assumption.” The state debts could be regarded as a proper national obligation, for they had been incurred in the war for independence. But foremost in Hamil-ton’s thinking was the belief that assumption would chain the states more tightly to the “federal chariot.” Thus the secretary’s maneuver would shift the attach-ment of wealthy creditors from the states to the fed-eral government. The support of the rich for the nationaladministration was a crucial link in Hamil-ton’s political strategy of strengthening the central government.

States burdened with heavy debts, like Massachu-setts, were delighted by Hamilton’s proposal. States with small debts, like Virginia, were less charmed. The stage was set for some old-fashioned horse trading. Virginia did not want the state debts assumed, but it did want the forthcoming federal district*—now the District of Columbia—to be located on the Potomac River.

The youthful financier’s first objective was to bolster the national credit. Without public con-

fidence in the government, Hamilton could not secure the funds with which to float his risky schemes. He therefore boldly urged Congress to “fund” the entire national debt “at par” and to assume completely the debts incurred by the states during the recent war.

“Funding at par” meant that the federal govern-ment would pay off its debts at face value, plus accu-mulated interest—a then-enormous total of more than $54 million. So many people believed the infant Trea-sury incapable of meeting those obligations that gov-ernment bonds had depreciated to ten or fifteen cents on the dollar. Yet speculators held fistfuls of them, and when Congress passed Hamilton’s measure in 1790, they grabbed for more. Some of them galloped into rural areas ahead of the news, buying for a song the depreciated paper holdings of farmers, war veterans, and widows.

Hamilton was willing, even eager, to have the new government shoulder additional obligations. While pushing the funding scheme, he urged Congress to

F PO

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Tognozzi Ponti ©2004Houghton Mifflin


Chapter Title ~ 11Cronache italiane?

Indirizzo: http://italian.college.hmco.com/studentsAttività: � S fogliando le pagine di un giornale�. In classe: Stampa il breve riassunto dell�articolo che hai letto e portalo in

classe. Presentalo, spiegando le ragioni per cui ti � sembrato interessante.

CommunicativeObjectives ¥ Narrate and describe

events in the past¥ Summarize and talk

about news events¥ Talk about Italian news-

papers and magazines

C A P I T O L O

Internet Café

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C A P I T O L O

Internet Café

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C A P I T O L O

Internet Café

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GRAMMATICA & CO.

Donna. . .Dillo ad alta voce!

* The verbs costare and durare are always conjugated with essere even though they can take adirect object. Ex: Comprare quella casa le è costato un occhio della testa. Quel discorso è dura-to un’ora.

Donna. . .Dillo ad alta voce!

I Il passato prossimoThe passato prossimo expresses a completed past action, usually an actionconcluded in a precise time frame. The passato prossimo is also used todescribe a past occurrence whose effects continue in the present.

Ho aspettato all’aeroporto per tre ore. I waited at the airport for three hours.

Ho sempre amato viaggiare. I’ve always loved to travel (and still do).

In English the passato prossimo can be expressed in three ways.

Abbiamo letto il giornale. We read the newspaper.We have read the newspaper.We did read the newspaper.

�A Formation1] The passato prossimo is formed with the present tense of the auxiliary

verb essere or avere plus the past participle of the action verb.

Aspettare Andare

ho sonohai sei + andato/aha èabbiamo + aspettato siamoavete siete + andati/ehanno sono

2] Regular past participles are formed by adding the participle ending (-ato, -uto, -ito) to the end of the verb.

Infinitive Ending Past Participle

appetare – ato aspettatoricevere –uto ricevutopartire –ito partito

Most first conjugation verbs (verbs ending in -are) are regular.

6 ~ Capitulo 00

Waner Applied Calculus 5e 2010Cengage Learning


117

2 Non–Linear ModelsCase Study Checking up on MalthusIn 1798 Thomas R. Malthus (1766–1834) published an influential pamphlet, later expanded into a book, titled An Essay on the Principle of Population as It Affects the Future Improvement of Society. One of his main contentions was that popula-tion grows geometrically (exponentially), while the supply of resources such as food grows only arithmetically (linearly). Some 200 years later, you have been asked to check the validity of Malthus’s contention. How do you go about doing so?

2.2 Exponential Functions and Models

2.3 Logarithmic Functions and Models

2.4 Logistic Functions and Models

KEY CONCEPTS

REVIEW EXERCISES

CASE STUDY EXERCISES

TECHNOLOGY GUIDES

Online you will find:Section by section tutorialsA detailed chapter summaryA true/false quizAdditional review exercisesGraphers, Excel tutorials, and other resourcesOptional sections:

Inverse Functions Using and Deriving Algebraic Properties of Logarithms

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to c

redi

t.

126 Chapter 2 Nonlinear ModelsCHAPTER 2 REVIEW

2.1 Quadratic Functions and ModelsA quadratic function has the form p. 114The graph of is a parabola p. 115The x-coordinate of the vertex is . The y-coordinate is p. 115x-intercepts (if any) occur at p. 115The y-intercept occurs at p. 115The parabola is symmetric with respect to the vertical line

through the vertex. p. 115Sketching the graph of a quadratic function p. 116Application to maximizing revenue p. 117Application to maximizing profit p. 118Finding the quadratic regression curve p. 120

2.2 Exponential Functions and ModelsAn exponential function has the form p. 126Recognizing exponential data p. 127Roles of the constants A and b in an exponential function p. 128Finding the exponential curve through two points p. 130Application to exponential growth (epidemics) p. 130Application to compound interest p. 132Application to exponential decay (carbon dating) p. 133The number e and continuous compounding p. 134

Alternative form of an exponential function: p. 137Finding the exponential regression curve p. 137

2.3 Logarithmic Functions and ModelsThe base b logarithm of x: means p. 143Common logarithm, , and natural logarithm, p. 144Change of base formula p. 144Solving equations with unknowns in the exponent p. 145A logarithmic function has the form p. 145Graphs of logarithmic functions p. 146Logarithm identities p. 147Application to investments (how long?) p. 147Application to half-life p. 148Exponential growth and decay models and half-life p. 150Finding the logarithmic regression curve p. 150

2.4 Logistic Functions and ModelsA logistic function has the form p. 156Properties of the logistic curve p. 157Logistic function for small x, and the role of b p. 158Application to epidemics p. 158Finding the logistic regression curve p. 159

KEY CONCEPTS

REVIEW EXERCISEST indicates exercises that should be solved using technologyIn Exercises 1–10, sketch the graphs of the quadratic functions, indicating the coordinates of the vertex, the y-intercept, and the x-intercepts (if any). HINT [see Example 1].

1. f (x) = 4x2 – 12x + 9 2. f (x) = 4x2 – 12x + 9

3. f (x) = –x2 – 4x + 9 4. f (x) = 4x2 – 12x + 9

5. f (x) = 4x2 – 40x + 50 6. f (x) = 4x2 – 10x + 100

7. f (x) = 4x2 – 12x + 9 8. f (x) = 4x2 – 12x + 9

9. f (x) = 4x2 – 12x + 9 10. f (x) = 4x2 – 12x + 9

In Exercises 11–14, for each demand equation, express the total revenue R as a function of the price p per item, sketch the graph of the resulting function, and determine the price p that maxi-mizes total revenue in each case.

11. f (x) = 4x2 – 12x + 9 12. f (x) = 4x2 – 12x + 9

13. f (x) = 4x2 – 12x + 9 14. f (x) = 4x2 – 12x + 9

T In Exercises 15–18, use technology to find the quadratic re-gression curve through the given points. (Round all coefficients to four decimal places.) HINT [see Example 5]

15. T (1, 2), (3, 4), (4, 3), (5, 1)

16. T (1, 2), (3, 4), (4, 3), (5, 1)

17. T (1, 2), (3, 4), (4, 3), (5, 1)

18. T (1, 2), (3, 4), (4, 3), (5, 1)

19. Trade with China The following chart shows the value of U.S. trade with China for the period 1994–2004 ( represents 1994). HINT [see "Features of a Parabola", p. 115]

a. If you want to model the trade figures with a function of the form

f (x) = 4x2 – 12x + 9

would you expect the coefficient to be positive or nega-tive?

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Boyer Management ©2009Cengage Learning


CHAPTER 00 � Chapter Title 1716 PART XX � Part Title

The Wal-Mart Effect

Wal-Mart became the world’s largestretailer in large part because of its

excellent management of inventory. Thecompany has annual sales of over $300billion and operates more than 3,500stores in the U.S. and more than 2,500stores in 15 other countries, includingJapan, Nicaragua, the United Kingdom,and Brazil. Wal-Mart employs over 1.3 mil-lion people in the U.S. and an additionalhalf million in other countries, and thecompany is the largest employer in boththe U.S. and Mexico. The scale of Wal-Mart’s operations and the number ofinventory decisions made on a daily basisare astounding. With over 6,000 storesand at least 10,000 SKUs at each store,Wal-Mart manages at least 60 million individual stocking locations— which leads to atleast a quarter of a million line item orders per day.

The tremendous impact Wal-Mart has on its suppliers via its inventory decisions hasbeen dubbed “the Wal-Mart Effect.” When Wal-Mart announced a major effort toreduce its inventory costs by $6 billion in 2006, or 20% of its yearly total, supplierstook notice. Wal-Mart accounts for 10% to 30% of many suppliers’ sales, includinggiants like Kellogg’s, Procter & Gamble, and SaraLee. Battery maker Spectrum BrandsInc. suffered a 28% drop in stock market value on April 6 after blaming inventoryreductions tied to Wal-Mart’s cutbacks. Wal-Mart accounts for 18% of Spectrum’s totalsales and 16% of P&G’s. The correction of Wal-Mart’s inventory also affects shippers,with estimates of a $300 to $400 million reduction in freight revenue. Swift

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L E A R N I N G O B J E C T I V E S

� Learn reasons for/against having inventory.� Learn basic inventory types.� Understand and calculate the Economic Order Quantity.� Apply Continuous Review and Periodic Review Systems.

Independent Demand Inventory

C H A P T E R 6

Wal-Mart’s inventoryreduction reflects its strate-gy of cutting costs andimproving margins bypruning the range of itemsoffer-ed in stores. Stepstaken to reduce inventoryinclude revising its distri-bution system to facilitatemore frequent delivery.

Wal-Mart’s inventory reduction reflects its strategy of cutting costs and improvingmargins by pruning the range of items offered in stores. Steps taken to reduce inven-tory include revising its distribution system to facilitate more frequent delivery tostores of fast-moving items such as toilet paper, light bulbs, and garbage bags. Thecompany also seeks to reduce store inventory that isn’t on shelves, including backroom stock, stock on overhead shelves, and stock in off-site warehouses. The link-age between Wal-Mart’s actions and those of its many suppliers provides an excel-lent illustration of the bullwhip effect where decisions of one part of the supplychain ripple through the entire system. �

Inventory is the physical store of any item or resources used in an organization.The policies and procedures that monitor levels of inventory and determinewhen to place an order make up the inventory management system.The objective of an inventory system is to specify:

1 When items should be ordered.

2 When quantity of the item should be ordered.

These two decisions need to be made both for manufacturing and services.In manufacturing, types of inventory include raw materials, work-in-process,finished goods, component parts, and supplies. In services, inventory refers totangible goods that are sold as part of the service and maintenance, repair, andoperating (MRO) supplies that are necessary to keep the business running.

REASONS TO CARRY INVENTORYALL organizations (including companies that utilize lean production and com-panies like Google that sell “virtual” products) carry some inventory, for the fol-lowing reasons:

1 Setup and Ordering Cost Producing an item involves two steps: setting upthe materials and resources necessary to produce the item and doing theactual processing or transformation of the item. Setup or Ordering Cost isthe cost in time or money to prepare all necessary materials and resourcesfor production. Processing cost is the cost in time or money to machine,assemble, or transform an item. As an example, if you want to change onelight bulb in the chandelier in your foyer, the setup time (cost) might be 5minutes – this is the time involved in getting out a ladder, finding a lightbulb, and preparing any necessary tools. The processing time for actuallychanging the light bulb might then be 10 seconds. The time(cost) tochange one light bulb is 5.16 minutes (5 minutes setup + 10 seconds pro-cessing). To change all 10 light bulbs would require a total of only 6.67minutes (5 minutes setup plus 10*10 seconds processing). This is one of thereasons that maintenance people in office buildings often change all lightbulbs at once—the other is that it increases reliability in terms of when thelights work. In general, the higher the demand for a good or service, thegreater the incentive to increase order size to spread order/setup cost overmore units. Setup cost is generally used in manufacturing situations wherephysical steps need to be taken to prepare for an order. Ordering cost is usedwhen purchasing items from a supplier or retailer because of the time orcost necessary to initiate and process the order when received.

CHAPTER 00 � Chapter Title 17

Eiteman Multinational Business Finance 11e ©2007Pearson/Addison-Wesley


1. The official terminology used throughout this chapter is that of the International Monetary Fund (IMF). Because the IMF is the primarysource of similar statistics for balance of payments and economic performance by nations worldwide, its language is more generalthan other terminology such as that employed by the United States Department of Commerce.

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The Balance of Payments

International business transactions occur in many different forms over the courseof a year. The measurement of all international economic transactions between

the residents of a country and foreign residents is called the balance of payments(BOP).1 Government policymakers need such measures of economic activity inorder to evaluate the general competitiveness of domestic industry, to set exchangerate or interest rate policies or goals, and for many other purposes. Multinationalbusinesses use various BOP measures to gauge the growth and health of specifictypes of foreign trade or financial transactions against the home country.

Home-country and host-country BOP data are important to business man-agers, investors, consumers, and government officials because the data influenceand are influenced by other key macroeconomic variables such as gross domesticproduct, employment, price levels, exchange rates, and interest rates. Monetaryand fiscal policy must take the BOP into account at the national level. Businessmanagers and investors need BOP data to anticipate changes in host country eco-nomic policies that might be driven by BOP events. BOP data might be importantfor any of the following reasons:

• The BOP is an important indicator of pressure on a country’s foreign exchangerate and thus on the potential for a firm trading with or investing in that coun-try to experience foreign exchange gains or losses. Changes in the BOP maypredict the imposition or removal of foreign exchange controls.

• Changes in a country’s BOP may signal the imposition or removal of controlsover payment of dividends and interest, license fees, royalty fees, or other cashdisbursements to foreign firms or investors.

• The BOP helps to forecast a country’s market potential, especially in the shortrun. A country experiencing a serious trade deficit is not as likely to expandimports as it would if it were running a surplus. It may, however, welcomeinvestments that increase its exports.

CHAPTER

48 Chapter 3 The Balance of Payments

Typical BOP Transactions

International transactions take many forms. Each of the following examples is an interna-tional economic transaction that is counted and captured in the U.S. balance of payments:

Honda U.S. is the U.S. distributor of automobiles manufactured in Japan by its parentcompany, Honda of Japan.

A U.S.-based firm, Fluor Corporation, manages the construction of a major water treat-ment facility in Bangkok, Thailand.

The U.S. subsidiary of a French firm, Saint Gobain, pays profits (dividends) back to itsparent firm in Paris.

Daimler-Chrysler, the well-known German/American automobile manufacturer, pur-chases a small automotive parts manufacturer outside Chicago, Illinois.

An American tourist purchases a small Lapponia necklace in Finland.

The U.S. government finances the purchase of military equipment for its NATO (NorthAtlantic Treaty Organization) military ally, Norway.

A Mexican lawyer purchases a U.S. corporate bond through an investment broker inCleveland.

This is a small sample of the hundreds of thousands of international transactions thatoccur each year. The balance of payments provides a systematic method for classifying thesetransactions. One rule of thumb always aids the understanding of BOP accounting: “Followthe cash flow.”

The BOP is composed of a number of subaccounts that are watched quite closely bygroups as diverse as investment bankers, farmers, politicians, and corporate executives. Thesegroups track and analyze the two major subaccounts, the Current Account and theCapital/Financial Account, on a continuing basis. Exhibit 3.1 provides an overview of thesemajor subaccounts of the BOP.

Fundamentals of Balance of PaymentsAccounting

The BOP must balance. If it does not, something has not been counted or has been countedimproperly. It is therefore incorrect to state that the BOP is in disequilibrium. It cannot be.The supply and demand for a country’s currency may be imbalanced, but supply anddemand are not the same thing as the BOP. A subaccount of the BOP, such as the mer-chandise trade balance, may be imbalanced, but the entire BOP of a single country is alwaysbalanced.

There are three main elements of the actual process of measuring international eco-nomic activity: 1) identifying what is and is not an international economic transaction; 2)understanding how the flow of goods, services, assets, and money create debits and creditsto the overall BOP; and 3) understanding the bookkeeping procedures for BOP accounting.

Waldman Industrial Management 3e ©2007Pearson/Addison-Wesley


Throughout this book we will spend much time analyzing the actions of firms inoligopolistic industries and examining the consequences of those actions for mar-

ket behavior and performance. How is price set in an oligopoly? What factors deter-mine expenditures on advertising? Do firms in an oligopoly spend propor-tionatelymore or less on research and development than firms in a competitive industry?Before considering these questions, it is necessary to examine the structure of a mod-ern firm and look carefully at the important assumption of profit maximization.Throughout the review of the economics of perfect competition and monopoly inChapter 2, we assumed that firms maximized profits. Now it’s time to questionwhether this assumption makes sense for real-world firms.

3.1 The Neoclassical FirmSuppose that at the beginning of your first microeconomics course, your professor hadasked you to name some firms. Your list might have included General Motors, Kodak,Microsoft, Xerox, Coca-Cola, and Procter & Gamble. All of these firms are among thelargest U.S. Industrial Corporations as ranked by Fortune. You probably noticed in yourmicroeconomics course that a “firm” in economic theory appeared to be quite differ-ent from these real-world large corporations.

Microeconomists usually model a firm as a single entity with a clear goal that itpursues without any wasted effort. The traditional neoclassical firm is represented bya production function that summarizes the relationship between inputs and outputgiven the current technology. Regardless of industry structure, each firm is assumed tomaximize profits, making it possible to precisely predict its output and pricing deci-sions. Because all firms are assumed to maximize profits, any differences in perform-ance—such as across industries or over time within the same industry—must be theresult of factors external to the firm, such as the structure of the market or technolo-gy. As we saw in Chapter 2, for example, economic theory predicted that the price setby a monopolist would be above the perfectly compet-itive price for that same indus-try. The higher monopoly price resulted from the difference in industry structure

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Alternate Theories of Firm Behavior

SC = C(q1,0) + C(0,q2) – (Cq1,q2)

C(q1,q2)

32 CHAPTER 3 Alternate Theories of Firm Behavior

APPLICATION 3.4

A Measure of Economies of Scope

Economists have developed a measure of the degree of economies of scope analogous to

the measure of economies of scale, S. Call this measure SC:

What SC measures is the relative increase in costs that would result from producing particu-

lar quantities of two goods separately rather than together. Larger economies of scope

result in larger values of SC.

✱

group attempting a takeover, keeping in mind that the group has an incentive toreveal only information favor-able to their attempt.

Because of these costs, the threat of takeover is unlikely to be a completely effec-tive constraint on managers.� Exactly how much room managers have for non–profit-maximizing behavior is an empirical question. We will examine the evidence shortly.

The product market may also constrain managers’ behavior. A firm that is notmaximizing profits faces the possibility of being forced out of a competitive market aslong as at least some other firms in the industry are striving for the highest possibleprofits. A highly competitive market, therefore, disciplines a firm to mini-mize costsand pick the profit-maximizing output level.

Finally, we note that in addition to the “sticks” of stockholder revolt and take-overthreats, “carrots” may also encourage managers to maximize profits. One such incen-tive is to tie executive compensation to profits through bonuses or stock options. Astudy of compensation and stock holdings of 461 top executives in U.S. corporationsfound that executives’ stock holdings averaged thirteen times their annual salary plusbonus.35 Presumably, these executives are well aware of the link between the value oftheir companies’ stock and their own wealth.

Theory cannot tell us conclusively whether an assumption of profit maximiza-tion is realistic. It is necessary, therefore, to turn to a consideration of the vast quan-tity of empirical work on managerial incentives and performance.

3.4 Empirical EvidenceDespite the voluminous empirical evidence on the issues discussed in this chapter, themajor issues remain unsettled. In this survey of the empirical literature, we ex-plorethe testable hypotheses that emerge from the theoretical literature and at-tempt tosummarize the current “bottom line” on each issue.

In part there is a lack of consensus because the issues are difficult to test. Most ofthe available evidence comes from statistical tests. The data are often poor and a care-ful test requires many explanatory variables. For example, the list of ex-planatory vari-ables in one comprehensive study on profitability includes the pro-portion of com-mon shares held by the top five managers, the control position of outside owners, the

SC = C(q1,0) + C(0,q2) – (Cq1,q2)

C(q1,q2)

32 CHAPTER 3 Alternate Theories of Firm Behavior

APPLICATION 3.4

A Measure of Economies of Scope

Economists have developed a measure of the degree of economies of scope analogous to

the measure of economies of scale, S. Call this measure SC:

What SC measures is the relative increase in costs that would result from producing particu-

lar quantities of two goods separately rather than together. Larger economies of scope

result in larger values of SC.

✱

group attempting a takeover, keeping in mind that the group has an incentive toreveal only information favor-able to their attempt.

Because of these costs, the threat of takeover is unlikely to be a completely effec-tive constraint on managers.� Exactly how much room managers have for non–profit-maximizing behavior is an empirical question. We will examine the evidence shortly.

The product market may also constrain managers’ behavior. A firm that is notmaximizing profits faces the possibility of being forced out of a competitive market aslong as at least some other firms in the industry are striving for the highest possibleprofits. A highly competitive market, therefore, disciplines a firm to mini-mize costsand pick the profit-maximizing output level.

Finally, we note that in addition to the “sticks” of stockholder revolt and take-overthreats, “carrots” may also encourage managers to maximize profits. One such incen-tive is to tie executive compensation to profits through bonuses or stock options. Astudy of compensation and stock holdings of 461 top executives in U.S. corporationsfound that executives’ stock holdings averaged thirteen times their annual salary plusbonus.35 Presumably, these executives are well aware of the link between the value oftheir companies’ stock and their own wealth.

Theory cannot tell us conclusively whether an assumption of profit maximiza-tion is realistic. It is necessary, therefore, to turn to a consideration of the vast quan-tity of empirical work on managerial incentives and performance.

3.4 Empirical EvidenceDespite the voluminous empirical evidence on the issues discussed in this chapter, themajor issues remain unsettled. In this survey of the empirical literature, we ex-plorethe testable hypotheses that emerge from the theoretical literature and at-tempt tosummarize the current “bottom line” on each issue.

In part there is a lack of consensus because the issues are difficult to test. Most ofthe available evidence comes from statistical tests. The data are often poor and a care-ful test requires many explanatory variables. For example, the list of ex-planatory vari-ables in one comprehensive study on profitability includes the pro-portion of com-mon shares held by the top five managers, the control position of outside owners, the

Henry Rachllin Portfolio

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