Standardized Outline for Courses

Part A: Basic Details

Name of Course Managerial Economics

Course Instructor(s)
(please provide email id)
Academic Associate(s)
(please provide email id)

Area Economics

Program BM

Term 1

Type of Course
Core
(Core/Elective/Workshop)

Number of Credits 3

Number of Classroom
30
Contact Hours
Course Pre-requisites (if any,
including cut-off grades in None
specific core courses)

Course Textbook David Besanko, Ronald Braeutigam: Microeconomics

Course Handout to be
Provided Yes
(Yes/No)
No. of Sessions to be taken by
None
Guest Faculty
Name of Guest Faculty (if
Not Applicable
identified)

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 Standardized Outline for Courses

Part B: About the Course

Course Description This is the first course in Economics,

Course Learning Objectives
Who is the course suitable for? (for electives
only)
introducing students to microeconomic analysis
and its usefulness in decision making at the
individual, firm and government level.
The objective is to introduce students to
achieving the best possible use of available
resources. The course is centred on
achieving the same, namely, solving various
constrained optimization problems under
different scenarios and market
environments, from the perspective of
different economic agents. The course
enables future managers to solve complex
real life problems, and to make decisions,
knowing fully well the advantages and
disadvantages of the approach used for the
same.

Part C: AOL - Learning Goals Mapping at the Course Level*

AOL Learning Goal (PLO) Relevance for Course (put a tick)

Decision Making Yes

Quest for Excellence No

Sustainability No

Global Mindset No

Please indicate the rationale for choosing theResponse: The course teaches the students how
specific learning goal(s) for this course consumers, workers, firms and regulators can
make decisions using microeconomic theory
and associated techniques. A problem (for
example, how to price a product) is first
visualized in the context (say, the market
structure), then analysed using microeconomic
models (for example, the Bertrand model in an
oligopolistic market), and then arrived at the
decision (e.g., pricing) using the model. 
*Description appended at the end of the document

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Session
Session Topic
No(s)
Introduction: Importance of
marginal analysis in arriving at
Economic Decisions: Role of
1 incentives and the Concept of
Pareto Efficiency. The need for
government intervention in
markets.
Use of Opportunity Cost and its
2* application in International
Trade
Decision Making in the
Household: budget line, budget
set, and evaluating various deals.
Indifference Curves and its use
3-4
in arriving at the optimum
consumption bundle and
deriving the household and
market demand curve
Standardized Outline for Courses
Chapters from Pedagogy (Case Studies/in-class
Course Textbook exercise/questionnaire/presentations)
Course Learning Objectives and Reading
Material other
than Case Studies
Understand the difference in Instructors Concept development
approach by a layman and an reading material/
Economist in solving the same Specified chapter
problem. from a textbook
Understand the concept of recommended by
externalities, difference between instructor
public and private goods.
Understand the rationale of
government intervention in
monopolistic markets and markets
with decreasing average costs.
Understand the difference between do Concept development, problem solving
explicit and implicit costs and and numerical exercises.
understand the importance of
relative price as opposed to
absolute price in Economics.
Be able to rank choices available to do do
a person / household and come to
an optimal decision.
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Decision Making in the
Household: Revealed Preference
5*
and its use in evaluating price
indices
Decision Making in the
Household, Concept of Income
6 and Substitution effect, its use in
deciding how much to work and
enjoy and how much to save
Decision Making in a firm and
coming up with the market
supply curve. Equilibrium
analysis, Government
7-8** intervention with price floors
and price ceilings. The concept
of elasticity, its use in pricing
with fixed and variable cost with
one seller (monopoly).
Standardized Outline for Courses
Be able to rank commodity do do
bundles from market data.
Understand the theoretical do do
rationale of a downward sloping
demand curve. Understand how
savings and work hours are
decided by households.
Understand the variables affecting do do
the supply side of the market.
Understand the ill effects of
government intervention in
competitive markets. Understand
the optimal pricing decision in a
competitive and monopolistic
conditions.
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 Standardized Outline for Courses

Understand the difference in do do

pricing policies under different
Consumers Producers and market situations.
Efficiency of the Market: The
idea of consumer surplus, its use
in defining first, second and third
degree price discrimination in a
9-10**
monopoly, its applications in
defining social welfare and
differences in social welfare in
competitive and monopolistic
situations.

Firm Behaviour: Fixed Understand the derivation of an do do

coefficients technology and isoquant and the optimal input
derivation of isoquants with choice given various technologies.
availability of multiple
technologies, optimal input use
to minimize cost to produce a
11-12**
given output. Derivation of cost
functions with fixed coefficient
and linear technologies. Fixed
and variable costs and derivation
of the U-shaped average cost
curve.
Understand the optimal output do do
Firm Behaviour under produced under different market
13-14
competition and monopoly situations

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 Standardized Outline for Courses

Understand pricing strategy to

Price discrimination in appropriate consumers’ surplus, by
15
monopoly a firm with absolute market power
Introduction to Game Theory Understand situations where the do do
Strategic moves and decisions; outcome depends on actions taken
16-17 Simultaneous and Sequential by various players. This is required
Game move games and Nash to understand competition in
equilibrium oligopolistic markets.
Oligopoly - I Understand the difference between do do
Price competition: Bertrand price and quantity competition
model. under imperfect competition.
Repeated games and cartel
18-19 formation. Tacit collusions in
oligopoly
Capacity competition - Cournot
model; Cournot competition in
repeated game
Oligopoly - II Understand how product do do
Product differentiation; Price differentiation softens price
20*
competition in differentiated competition.
products market.
Sequential move entry decision – Understand first-mover’s do do
21* Stackelberg model; Entry advantage and strategic behavior of
deterrence by capacity expansion imperfectly competitive firms
Economics of asymmetric To understand market failure and do do
information the basis of contract designing in
Adverse selection and its presence of agency problem.
22*
application in "Markets for
Lemons“; Moral hazard and
Principal-Agent problems.

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 Standardized Outline for Courses

Note: * Coverage of these topics depends on faculty discretion. To make room for all possible topics, 3 additional sessions were given.
**The course instructor may modify the sequence of these topics or coverage.
For Attendance Norms please refer to section 10 of the Student’s Manual.
For Evaluation and Grading Norms refer to sections 20, 21 and 22 of the Student’s Manual.
For Disciplinary Action refer to sections 26 and 27 of the Student’s Manual.

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Evaluation Module
Mid-Term/Quizzes
End-Term
Others: Assignments, Class
Participation, Presentation
Standardized Outline for Courses
Details of Evaluation Components
Yes/No Weightage for the PLO sub-dimension measured Average Number of Hours of
Evaluation Component1 Work Outside Classroom2
Yes 40 (if there is non-exam Visualization and analysis 3-5 hours of self-study per week
component) throughout the term + 5-7 hours of
60 (if there are only exams) preparation time per exam.
Yes 40 All sub-dimensions of decision- In addition to the above, 10-15 hours
making of preparation time for the end-term
exam
Instructor’s 20 Decision Making 10 hours in total
Choice
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