BUS 207: Managerial Economics

Section D100: Tuesday 11:30am-2:20pm Blusson Hall 9660

Peng Zhang
Office: WMC 4323
Office Hours: Tuesdays 10-11am, 5-6pm
Contact: peng_zhang_7@sfu.ca

Prerequisites
Econ 103, 105, MATH 157 and 15 units. Students with credit for ECON 301, ECON 201, or BUS 307 may not
take BUS 207 for further credit.

Course description
The purpose of this course is to introduce students to concepts and theories in microeconomics and their
application to real-life business problems, in particular managerial decision-making. The learning process
will be a combination of verbal, graphical and mathematical interpretation of these theories and practice.

After completing this course, students are expected to be able to: 1) understand and explain economic
concepts and models; 2) use proper economic concepts and models to solve real-life business problems.

Recommended Textbook
Managerial Economics (8th Edition). Authors: Samuelson and Marks. Publisher: Wiley, 2014.
• It will be available in hardcover or electronic form from the bookstore.
• You can use the earlier editions but the assigned page numbers may not be the same.
• You can also borrow from the library.

Structure of the course

Lectures. We have a 3 hour lecture every week. It is essential that you attend the lectures. All contents
mentioned in class will potentially appear in the exams, including those not written explicitly in the
lecture notes. Important: note that I will not mention every single page of the lecture notes. Instead, I
will pick up and explain in detail the most important concepts and theories, or the ones which are the
most relevant to your courses in senior years. Contents written in lecture notes that I do not mention in
class are relatively straightforward to understand and can also be part of the exams. The audio track
from the lectures can be found on your my.sfu.ca account or on the following link: www.sfu.ca/~lectures.

Class participation. Participation in class is necessary. There are generally two ways to participate. Firstly,
you can participate by answering multiple choice questions via Poll Everywhere during each lecture.
Secondly, right after I finish lecturing, I will run a Q&A session where you can ask me questions about the
lecture and in particular the contents on the lecture notes that I do not cover in class.

Office hours. I will hold two office hours per week to answer any questions or comments regarding the
lecture materials. The TAs will also hold office hours to answer any questions you may have pertaining to
the weekly examples and midterms. You may go to any TA’s office hours. I will post the office location and
hours of TAs’ office hours on the course webpage.
Emails. There is a folder on Canvas with most frequently asked questions. If you have any questions,
check the syllabus, lecture notes, this folder and the audio track of the lecture first. Email me or TAs only
when the answers are not there. We will not answer questions directly if it is easy to find answers in the
above materials. If you come to class late and miss the class announcements, listen to the recorded
lecture to get the information. Please use common courtesies when sending emails. Note that given the
large class size, you should expect to get a reply within 72 hours.

Grades
Midterm 1 25%
Midterm 2 25%
Final exam 50%

Exam policies. All exams will be closed book and closed notes. You will be allowed to use a simple non-
programmable calculator. University policies regarding exam procedure will apply. Only medical or family
emergencies will be accepted as reasons for missing an exam. You must notify me before the exam (or
right after the exam if it is unexpected) and documentation supporting your excuse must be provided to
me within 3 days of the exam, otherwise you will receive a zero grade. There will be no make-up midterm
exams. If you miss either of the midterm exams (for a valid reason), the weight of that exam will be added
to your final exam. You cannot transfer the weight of any midterm to the final exam for any other reason.

Midterm exam. There will be two midterm exams. Each will be two hours in length and will be comprised
of true/false and short written questions. The material covered includes anything discussed during the
lectures. I will not test you on textbook topics that I do not discuss in class.

Final exam. The final exam will be held in April. It will be 3 hours in length and a similar format to the
midterms. The material covered is cumulative.

How to succeed in this class

Lecture preparation: The number one way to succeed in this class is to be prepared for the lectures. To
properly prepare, read through the lecture notes posted on the class webpage and try to understand
them with the help of the textbook chapter assigned to the lecture. Take a look at the weekly examples
and try to work on them. Lecture materials will be uploaded on Canvas every Thursday before the next
lecture.

Note taking: I suggest that you print out the lecture notes and, while actively listening in class, take brief
notes right on the paper. Expand your notes using the audio track of the lecture. Do not spend too much
time taking notes in class at the sacrifice of listening and participating, otherwise you may find it difficult
to understand and follow the lecture.

Weekly examples: It is crucial that you are able to understand and solve all of the weekly examples on
your own after each lecture.

Regulations.
Mobile phones should be put in the silence mode. If your mobile phone rings, one point will be deducted
from your final grade each time.
Course outline.
Date Content Reading materials
January 7 Introduction Chap 2 (Marginal analysis)
and Chap 2 Appendix (up to
p.52) up to page 68
January 14 Demand analysis Chap 3 (Demand theory, up to
p.77) up to page 98
January 21 Productivity Chap 5 (Production)
January 28 Cost analysis Chap 6 (Costs)
Chap 14 (Asymmetric page 593-601
information) p.454-460
Coase, The Nature of the Firm
February 4 Perfect competition and market Chap 7 (Perfect competition),
failure Chap 11 (Regulation) up to
p.360 up to page 472
February 11 Mid-term 1
February 25 Monopoly Chap 8 (Monopoly)
March 3 Oligopoly Chap 9 (Oligopoly)
March 10 Game theory Chap 10 (Game theory)
March 17 Mid-term 2
March 24 Risk and uncertainty Chap 12 (Uncertainty),
Chap 14 (Asymmetric
beginning to 593 information) p.445-454 &
601 to end
p.460-end
March 31 Pricing Chap 17 (Auctions),
Chap 3 (Price discrimination
and customization): p.78-84
April 7 Course review