MBA Graduate Program

Course Syllabus: BA620.13 Online

Managerial Economics
Spring 2011

Course Description

Introduces the economics of the firm including price theory, consumer behavior,
concepts of elasticity, equilibrium under different market conditions, demand and supply
factors of production, introduction to welfare economics and its effects on modern
organizations, game theory for decision-making, forecasting technique analysis,
production and cost analysis, pricing decisions in alternative market structures,
simulation in managerial decision making and applied agency theory in organizations.

Teaching Methods

Problem solving exercises; discussion forums; PowerPoint narratives; case studies;

streaming videos; excel worksheet applications; cooperative learning; internet
resources;

Course Objectives

To equip managers with an extensive set of analytical and applicable tools aimed at:

 Improving quantitative skills. The course takes a scientific approach to business

decisions, where optimal decisions are computed mathematically based on
formulas derived from firm level data. Thus the students will significantly enhance
their quantitative skills.
 Enhancing problem solving skills. Managers are decision makers. This course is
designed to make people better decision makers. Students learn how to
anticipate how other firms and consumers will respond to decisions they make,
and how to incorporate these responses into their own decisions. In doing so,
students significantly enhance their problem solving skills.
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 Assessing the profit maximizing course of action. Students will learn optimal
strategies for firm behavior under a variety of different market structures,
including markets where firms have little power over pricing decisions to markets
where firms are the dominant participant. The goal is to understand what makes
one market different from another from the perspective of an executive running a
business.
 Identifying the optimal input and output mix for a firm using production and cost
theory.
 Analyzing evidence pertinent to estimating demand pricing, elasticity and total
revenue. Students, given data on the firm’s sales price and amount sold, will be
able to derive the price to charge that maximizes revenue to the firm.
 Utilizing game theory to improve business strategies. Students will be able to use
game theory to make decisions in environments with a small group of people or
firms, including negotiation and price wars between two firms.
 Determining the existence of economies of scale and scope and evaluate their
impact on a firm's competitive position.

Prerequisites

A strong foundation in principles of microeconomics and macroeconomics is suggested.

Course Text and Readings

Baye, M., Managerial Economics and Business Strategy (7th Edition),

(Richard D. Irwin/McGraw-Hill, Inc., 2010).

MHID: 0-07-337-596-9; ISBN-13: 978-0-07-337596-0

Contact Information
email = dasarib@arcadia.edu

Email and Blackboard

We will be using Arcadia e-mail and Blackboard. Make certain your account is active
and accessible. Check it routinely for announcements, course information, etc.

Special Note: In the event that you have difficulty completing any of the assignments
for this course, please contact me immediately. Here is my email address
dasarib@arcadia.edu.
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Learning Outcomes Assessment

Learning Outcomes can be separated into are two significant areas:

1. Course Specific Knowledge of Techniques and Procedures:

 Optimization
 Demand and Supply
 Production Efficiency
 Strategic Market Analysis
2. Skill Building
 Problem Solving
 Quantitative

You will have several opportunities to demonstrate your competence in this course.
There will be one semester long case study with six memo style questions, two exams,
four discussion forums, five problem set assignments, and four additional case studies.
Every aspect of this course is focused on problem solving to enhance decision making.
All problem sets are quantitative. All exams are a mix of quantitative and course specific
material. Discussion forums allow a more in depth exchange of ideas involving ethics
and values. Additional case studies are introduced in the second half of the course to
assess a student’s integration of concepts and principles presented earlier in the
course.

Grade Components and Final Grade Calculation

Midterm Exam (1) 10%

Final Exam (1) 10%

Memos from Time Warner Case Study (6) 12%

Discussion Forum (4) 16%

Problem Sets 40%

Case Studies 12%

Final Grade Rubric

.Grade Range Grade Range Grade Range Grade Range

100-
A 95 B 86-84 C 76-74 D 66-64

A- 94-90 B- 83-80 C- 73-70 D- 63-60

B+ 89-87 C+ 79-77 D+ 69-67 F <59

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Discussion Board Rubric

A (90-100) B (80-89) C (70-79) D/F (0-69)

Criteria
Outstanding Proficient Basic Below Expectations

 substantial  generally  rudimentary

 rich in content
information competent and superficial
 full of thought,
Critical  thought, insight,  information is  no analysis or
insight, and
Thinking and analysis thin and insight is
analysis
has taken place commonplace displayed

Clear connections

 connections are  limited, if any

 to previous or  no connections
made, connections
current are made
Connections  not really clear  vague
content  off topic
or too obvious generalities
 to real-life
situations

 new ideas  few, if any new

 new  new ideas or ideas or
 no new ideas
connections connections connections
 “I agree with
Uniqueness  made with  lack depth  rehash or
…” statement
depth and and/or detail summarize
detail other postings

 all required
 all required  all required
postings
postings postings  some, or all,
 most at the
 early in  some not in required
last minute
Timeliness discussion time for others postings
without
 throughout the to read & missing
allowing for
discussion respond
response time

 obvious
 obvious
 few grammatical or
 several grammatical or
grammatical stylistic errors
grammatical or stylistic errors
Stylistics or stylistic  makes
stylistic errors  errors interfere
errors understanding
with content
impossible
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Course Schedule

Date Subject - Topics Assignments due

Week 1: Fundamentals of Managerial Read Chapters 1 & 2 and Case Study
Jan 2 – 9, Economics – Time Warner (p.546)
2011 Supply & Demand Problem Set # 1
The Land of the Margin Memo # 5
Week 2: Quantitative Demand Analysis Read Chapters 3 & 4
Jan 9 – 16, Theory of Individual Consumer Problem Set #2
2011 Behavior Discussion Forum # 1
Week 3: Production Process & Costs Read Chapters 5 & 6
Jan16 – 23, Profit Maximization Problem Set #3
2011 Organization of the Firm Discussion Forum #2
Intro to Agency Theory Memo # 2
Week 4: Industrial Organization Read Chapter 7
Jan 23 – 30, Market Structures Midterm Exam
2011 Memo # 11
Discussion Forum # 3
Week 5: Chapters 8, 9 (lightly) & 10 Read Chapters 8, 9 (lightly) & 10
Jan 30 – Feb Managing in Different Market Case Study #1
6, 2011 Structures Memo # 7
Basic Oligopoly Models Discussion Forum #4
Game Theory – The Real Deal
Week 6: Chapter 10 (again), 11 & 12 Read Chapters 10 (again), 11& 12
Feb 6 – 13, Pricing Strategies for Firms Problem Set #4
2011 with Market Power Case Study #2
Week 7: Economics of Information Read Chapter 12 (again) &13
Feb 13 – 20, Advanced Topics in Business Problem Set #5
2011 Strategy Memo # 14
Case Study #3
Case Study #4
Final Exam
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Class Policies

Code of Academic Responsibility:

Each student accepts the responsibility of maintaining high standards of integrity in
his/her academic performance. It is the responsibility of all students to uphold the code
through the procedures set forth by the University as outlined in the Student Handbook.

Other Business:
There will be no make-up exams or make-up quizzes; however, a work assignment will
be required in order that the student demonstrates ability in the area covered by the
test. (More as the situation warrants.)

Editorial Format for Written Papers:

All written assignments are to follow the APA writing style guidelines for grammar,
spelling, and punctuation. Visit the following websites to www.apastyle.org and
http://www.liunet.edu/cwis/cwp/library/workshop/citapa.htm for guidelines.

Student Handbook: Please refer to your student handbook for all university regulations.