Managerial Economics

EMBA Program

General course information and requirements

Semester: Spring 2008
Course: BADM 674B (Managerial Economics)
Instructor: Robert J. Stonebraker
Office: 401 Thurmond
Office phone: 323-2488
E-mail address: stonebrakerr@winthrop.edu
Office hours: I will be available over the lunch break on most class days.

Text:

Managerial Economics, 5th edition, by William F. Samuelson and Stephen G. Marks, Wiley, 2006. The most efficient way to use the text in this course is to skim the assigned material prior to class without worrying about details.  After class the text can be studied selectively to reinforce the material discussed and clear up questions.

 

Attendance policy

I expect you to attend and be prepared for every class.  If illness or other responsibilities preclude attendance, you are responsible for the material covered.

 

Grades:

Exams:   70%

You will have two exams, each worth 35% of your grade. Exam questions will emphasize material presented in class. Questions will involve mathematical problem solving, short written explanations of concepts and ideas, and graphical analysis.

Demand Analysis Project:   15%

Each student will complete a demand analysis that can be incorporated into the Integrated Research Project. The analysis will have two parts.

Part I is to collaboratively prepare an analysis of the demand facing the industry chosen by your group. As part of the analysis you should identify the relevant variables affecting demand, gather data, and statistically estimate and interpret some type of demand relationship.  Depending upon the quantity and quality of data available, you might estimate entire demand functions or demand elasticities.  If not, you might be able to estimate sales trend lines and use them to forecast demand in subsequent periods. 

Part I should be completed in time for your group to incorporate its findings into the Mid-Term Project Presentation on February 23. I will expect to have a six to eight page paper from each group by that date.  If you want feedback prior to the presentation, turn your papers in early.

For Part II, each group should submit a revised group paper.  In addition, each individual should submit a two to three page paper about demand issues facing the specific firms you have selected within the industry.  Your individual papers might discuss which factors determine the part of industry-wide demand that can be captured by your firm(s) and/or identify and discuss organization-specific strategies that might boost demand and market share.  The final group and individual papers are due Friday, April 11.

Mid-Term Presentation: 5%

Final Project and Presentation: 10%

In evaluating these presentations I will be most concerned with the quality of your analysis, the clarity of your explanations, and how effectively you have integrated the four courses.

Make-up policy:

Make-up exams or assignment extensions will be given to students with what I judge to be a valid excuse. Needing more time to study is not a valid excuse. If you can't make an exam or deadline I expect to be notified as quickly as possible, preferably before the exam or deadline. Students who do not notify me in a timely manner should not expect a make-up or extension.

 

Problem sets:

The key to success in a problem-solving course is practice. To encourage your practice, I will assign homework problems after every class and post the answers on-line for you to check your work. Although you will not be asked to turn these in for a grade, you should keep up with these assignments and understand how to solve the problems.  Many exam questions will be similar to those assigned for homework.

Course Outline

I. Basic Decision-Making Tools

A. Introduction

     chapter 1

B. Supply and demand

     pp. 399-404 in chapter 10

     Supply and Demand: An Overview

     Supply and Demand Review Questions

 

Note: The material in the sections above is review and I will not present it directly in class.  To test your understanding of supply and demand, try the supply and demand questions at the link above. 

 

C. Optimization

     1. Marginal analysis

     2. Calculus and applications

         chapter 2 and appendices (omit material on Lagrange multipliers on pp. 72-73)

        Calculus Basics

        Calculating Derivatives: Practice Exercises

        Partial Derivatives

        Calculating Partial Derivatives: Practice Exercises

 

II. Demand Analysis

A. Theory of demand

     1. Determinants of demand

     2. Elasticity of demand

     3. Pricing issues

         chapter 3 (omit appendix)

B. Estimating demand

     chapter 4 and appendix

     Interpreting Regression Data

     Standard Errors

C. Forecasting demand

     chapter 5

 

III. Supply Analysis

A. Production analysis

     chapter 6 (omit section on graphical approach in pp. 229-234)

B. Cost analysis

     chapter 7 (omit appendices)

     Transfer Pricing

C. Comparative advantage and international trade

     pp. 268-271 in chapter 7

     How to Produce

     International Trade

     Exchange Rates

 

   

IV. Competitive Strategies

A. Multi-product pricing strategies

     appendix to chapter 12

B. Game theory

     Arms Races

     pp. 487-491 in chapter 12 and chapter 13 (omit appendix)

C. Imperfect information issues

    1.   Asymmetric information, moral hazard and principal-agent issues

           pp. 629-640 in chapter 15

    2.   Bidding strategies

           pp. 716-734 in chapter 17

EXAM#2:  Friday, April 19