Rift Valley University

Bole campus

BADM 641: MANAGERIAL ECONOMICS

Credit Hours: 2 Pre-requisite: None

Course Description
The course is intended to provide participants with an understanding and interpretation skill of a
broad range of economic concepts and relate them with day to day business decision making
activities. It will try to addresses a range of economic concept such as the market models.
Elasticity and pricing decision, market structure and optimal managerial decision, strategies and
tactics in game theory, aggregate demand and aggregate supply models (IS-LM-BP model) . It
will also highlight the role of intellectual capital, the theory of outsourcing, the theory of
productivity, international regulations and constraints.

Course Objectives:
 To relate economic concepts with day to day business decisions
 To know different market models
 Elaborate Elasticity and pricing decisions
Course outline
Chapter- One: Introduction
 Concepts and definition of managerial economics
 An overview of Economic agents and the circular flow of economic activities
 Firms as economic agents
 The concept of profit
Chapter- Two: The concept of demand, elasticity of demand and price decision
2.1 The consumers’ preference and demand
2.2 Elasticity of demand and price decision
2.3 Estimating the demand function (Overview)
Chapter- Three: theory of the firm
3.1 theory of production and optimization decision
3.2 Theory of cost
Chapter- Four: market structure and optimization decision
4.1 competitive market structure
4.1 Monopoly
4.3 Monopolistic competition (reading assignment)
4.4 Oligopoly models
Chapter- Five: Strategies and Tactics in Game Theory
5.1 Dominant Strategy
5.2 Nash Equilibrium
5.3 Non –cooperative games
5.4 Cooperative games
5.5 Sequential games
Chapter- six: The National Income and Open Economy
 6.1 National Income Accounting
6.2 Aggregate demand and supply
6.3 Business Cycle and measuring Inflation
6.4 IS-LM-BP model

MODE OF TEACHING-LEARNING PROCESES

A combination of the following major methods of delivery will be used for each course of the
MBA programme:
 Lecture (for practically) all courses
 Individual &/ or group Assignment /projects / term papers,
 Class presentation and discussion by students.

ASSESSMENT SCHEME
 Assignments, group work and term paper --------------------------------------50%
 Final Exam --------------------------------------------------------------------------50%
 Total----------------------------------------------------------------------------------100%

Text
 Thomas J. Webster, Managerial Economics: Theory and Practice, 2003, Elsevier (USA).

References

 William F. Samuelson and Stephen G. Marks, Managerial Economics, 7th ed., 2012, John
Wiley & Sons, Inc.

 David M. Kreps (1998) A course in Micro economic theory. Prentice-hall of India pt. Itd,
1sted.
 Paul Samuelsson and W. D. Nordhaus (1989) Microeconomics: A version of economics,
13thed, McGraw-Hill book Co
 Craig Peterson, w. Cris Lewis, (1999) Managerial economics, 4th edition, Pearson
Education, Dell:
 D. N Dewivedi (1999) Managerial Economics- (McGraw-Hill) .US