Managerial Economics

General course information and requirements

Semester: Spring 2006
Course: ECON 415 (Managerial Economics)
Instructor: Robert J. Stonebraker
Office: 401 Thurmond
Office phone: 323-2488
E-mail address: stonebrakerr@winthrop.edu
Office hours: MW 10:30 - noon, TR 1:15 -3:15 p.m.
                       Other times are available by appointment.

Objectives:

The course builds upon the principles of microeconomic analysis you learned in ECON 215.  In this course you will learn to apply microeconomic principles to common decisions faced by businesses and non-profit organizations and to use relevant quantitative methods to estimate statistical patterns and make optimal choices.

Text:

Managerial Economics, 5th edition, by William F. Samuelson and Stephen G. Marks, Wiley, 2005. 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. 

Grades:

 

Grades will be determined by the following:

 

Regression project:                         10%

Exam with highest score:                 35%

Exam with 2nd highest score:          30%

Exam with lowest score:                 25%

 

The percent score needed to earn a specific grade will depend partly upon the difficulty of the exams.  When each exam is returned I will keep you apprised of the approximate grading scale to expect. If there is ever a question about what grade you are earning at a particular point in time, please ask.

Exams:

 

Exam questions will stress solving numerical problems and will be based on the material presented in class. You also will be expected to write short essay/explanation answers and to work with graphs. Students caught copying/cheating will be dealt with harshly.  The final exam will be given at 3 p.m. on Thursday, April 27 and will include some specified review material.

Homework:

 

The key to success in any problem-solving course is (duh) to practice solving problems.  The textbook includes many useful end-of-the-chapter problems that I will assign as homework.  Although I expect you to complete them, they will not be turned in and graded.  The best strategy is to work in small groups on a regular basis to complete the problems and then check the answers that will be provided on the course web page.  You will have opportunities in the next class period to clear up any confusion. Since I do not collect or grade these assignments, some students may choose to ignore them or try them the night before the test. This is an excellent strategy for those hoping to receive a failing grade.

Attendance Policy:

 

You are expected to attend every class on time and are responsible for all class material whether or not you attend.  Following  the Winthrop University Attendance Policy, students missing as many as 1/4 of the class meetings will receive a grade of N, F, or U, whichever is appropriate.

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, Services for Students with Disabilities, 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.

 

Expectations:

 

As a student you should expect me to take my class responsibilities seriously.  You should expect me to deliver quality instruction in each class, to start and end each class on time, to be responsive to student perspectives and questions, and to treat each of you with respect.  As an instructor, I expect similarly responsible behavior from you.  In particular, I expect that you will:

1.   Attend every class.   In addition to the obvious negative impact on your own learning, your absences can damage your classmates as well. Students that skip classes, ask questions that were answered last week, and then mooch missed notes and material from conscientious classmates who are trying to pay attention impede the learning of others and slow the pace at which material can be covered. 

2.   Come to class on time and stay until its conclusion.  Late arrivals and early departures are disruptive and inconsiderate of others. 

3.   Turn off and put away all cell phones and pagers.  I expect never to see these devices in class.

4.    Pay attention and participate.   While in class you should be concentrating on class.  That means no idle conversations with those around you, no attempts to complete work or study for other classes, and no other extraneous activities.

Course Outline

I. Basic Decision-Making Tools

A. Introduction

     chapter 1

B. Present value analysis

     chapter 19 (omit pp. 813-820)

C. Optimization

     1. Marginal analysis

     2. Calculus and applications

         chapter 2 and appendices

        Calculus Review

        Calculating Derivatives: Practice Exercises

        Partial Derivatives

        Calculating Partial Derivatives: Practice Exercises

        Lagrangian Multiplier Example

II. Demand Analysis

A. Theory of demand

      pp. 79-104 in chapter 3

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. Estimating cost functions

   

IV. Competitive Strategies

A. Market structures

     chapter 10, pp. 436-451 in chapter 11, pp. 104-113 in chapter 3, chapter 12 (omit sections

     on quantity competition and kinked demand on pp. 480-487) and appendix

               Arms Races

B. Game theory

     chapter 13 (omit appendix)

Homework