Managerial Economics

EMBA Program

General course information and requirements

Semester: Spring 2010
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, 6th edition, by William F. Samuelson and Stephen G. Marks, Wiley, 2010. 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: 75%

You will have two exams. The exam with your higher score will count 40% and the one with your lower score will count 35%. Exam questions will emphasize material presented in class. Questions will involve mathematical problem solving, short written explanations of concepts and ideas, and graphical analysis.

Regression Project: 10%

Each student will complete a regression analysis project that will involve gathering data, estimating a regression relationship, and interpreting the results.

Step one will be to formulate some hypothesized relationship to estimate. It can be one that is explicitly economic: for example, the quantity of Pepsi Cola demanded = f(price of Pepsi). However, any causal relationship can be used: for example, a student GPA = f(number of hours studied per semester). You must submit your choice to me no later than Friday, February 19.

Step two will be to gather data and estimate the statistical relationships using Excel’s regression option.

Step three will be to write up your results. You must submit the Excel output, along with a short report (three pages at most) that describes the relationship you expected to find, lists your data source(s) and interprets the results. The report must explain if the estimate is "statistically significant" and discuss possible biases. The deadline for submitting this paper is Friday, April 9.

A completed project with no mistakes will earn an A. To be sure of getting an A, turn in your project on or before Friday, March 26, I will critique the work and return the papers by Saturday, April 3. This will give you an additional week to make any needed corrections.

Evaluation Assignment Presentation: 5%

Evaluation Assignment Paper: 10%

In evaluating these I will be concerned with the quality of your oral and written presentation and how effectively you have evaluated the relevant markets and firms.

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.

Conduct:

I expect adherence to Winthrop’s Code of Student Conduct.

Students with Disabilities:

Winthrop University is dedicated to providing access to education. If you have a disability and need classroom accommodations, please contact Gena Smith, Coordinator, Office of Disability Services, at 323-3290, as soon as possible. Once you have your Professor Notification Form, please tell me so that I am aware of your accommodations well before the first assignment.

Course Outline

I. Basic Decision-Making Tools: A. Introduction and supply and demand; chapter 1 and pp. 265-268 in chapter 7; 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.
: B. Optimization; 1. Marginal analysis; 2. Calculus and applications; chapter 2 and appendices (omit material on Lagrange multipliers on pp. 67-68); 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 and forecasting demand; chapter 4 and appendix; Interpreting Regression Data; Standard Errors

EXAM #1: Friday, February 27

III. Supply Analysis: A. Production analysis; chapter 5 (omit section on graphical approach in pp. 191-196); B. Cost analysis; chapter 6 (omit appendices); Transfer Pricing; C. Comparative advantage and international trade; pp. 229-231 in chapter 6 and pp. 286-289 in chapter 7; How to Produce; International Trade; Exchange Rates

IV. Competitive Strategies: A. Multi-product pricing strategies; appendix to chapter 9; B. Game theory; Arms Races; pp. 344-348 in chapter 9 and chapter 10 (omit appendix); C. Imperfect information issues; 1. Asymmetric information, moral hazard and principal-agent issues; pp. 544-554 in chapter 14; 2. Bidding strategies; pp. 623-641 in chapter 16

EXAM#2: Saturday, April 24

Last modified 07/11/11