University f Bahrain Cllege f Business Administratin Department f Ecnmics and Finance ECON 340: MANAGERIAL ECONOMICS Secnd Semester 2008/09 Instructr: Dr. Mhammed A. Alwsabi Office: 2 110 Phne: 17438656 E-mail: mwsabi@gmail.cm Office Hurs: UTH 9-10; and MW 9:30 10:30 Prerequisites: ECON 140 and QM 250 r QM 255 Educatinal Resurces: Required Textbk and References: i. Paul G. Keat and Philip K.Y. Yung. Managerial Ecnmics: Ecnmic Tls fr Tday s Decisin Makers, 5 th editin, Pearsn-Prentice Hall. ii. In-class handuts and nline ntes Recmmended i. Ecnmist, Business Week, MEED, GULF and any ther ecnmics and business magazines that cver current issues in GCC cuntries and Middle East regin Internet and Wrld Wide Web: i. http://www.prenhall.cm/keat (Textbk Website). It cntains an interactive study guide n-line and practice test questins. Be sure t select the fifth editin versin f the textbk, nt the furth r sixth editin). Curse Descriptin: In tday's dynamic ecnmic envirnment, effective managerial decisin making requires timely and efficient use f infrmatin. The purpse f this curse is t prvide students with a basic understanding f the ecnmic thery and analytical tls that can be applied in decisin making prblems faced by public, private and nt-fr-prfit rganizatins. The gal is t shw students hw t cmbine the scarce ecnmic resurces f a business s that these resurces are allcated in the mst efficient manner and t enable them t maximize the value f their enterprise. This curse will cver key issues in managerial ecnmics including demand analysis and estimatin, prductin and cst analysis under different market cnditins, frecasting and decisin making under uncertainty. Graphs, mathematics and statistics will be used t explain the managerial decisin making prcess. Curse Objectives: Page 1 f 6
Upn cmpletin f this curse, students shuld be able t: 1. Understand the interactin f basic frces f demand and supply that determine the quantity f gds traded in a market and the price paid fr thse gds. 2. Calculate and estimate elasticity empirically and predict the effect f a given change in price n revenue. 3. Use demand estimatin t frecast demand trends and change. 4. Describe the relatinship between prductin and csts in the shrt run and lng run. 5. Draw inferences regarding firm behavir and perfrmance at different market structures. 6. Apply techniques f ecnmic analysis t prblems facing business managers. 7. Be able t slve prblems mathematically and interpret the results ecnmically. 8. Use Excel t determine ptimal slutins t a wide variety f prblems. Teaching Methds: 1. Lectures and discussins 2. Prblem Slving 3. Case studies 4. Exercises and Assignments 5. Quizzes and Exams Skills t be develped: This curse helps students in develping the fllwing skills: 1. Oral and written Cmmunicatin skills that supprt and enhance managerial effectiveness thrugh discussin, class participatin, essay assignments, and case study prjects. 2. Analytical skills thrugh discussin, raising questins, exams, and assignments 3. Creative thinking skills thrugh encuraging students t slve prblems, identify pprtunities and make reliable decisins in rutine and unfamiliar r unpredictable dmestic and glbal envirnments, 4. Team wrk thrugh grup assignments, and term papers 5. Adaptability t changes thrugh bservatin f new and changes in the wrld financial system. Grading Scheme: Test 1 (TBA) 25 Test 2 (TBA) 25 Final Examinatin (15.06.2009 @2:30) 50 Ttal 100 Midterms and Final Exams Exams will be designed t test the students understanding f the curse material and issues, nt memrizatin. Students are expected t take the tests. There will be n make-up test given. Instead, that test s weight will be added t yur final examinatin. Page 2 f 6
Students wh receive excused absences fr midterm test will be given a special cmprehensive final examinatin that includes any material n which they were nt previusly tested. There are n exceptins t this plicy. Students wh arrive late fr any exam, fr any reasn, will nt be given additinal time. Plan ahead and arrive n time. Bring yur statinary with yu. Sharing f statinery and calculatrs is nt permitted during any test r exam. Bks, ntebks, file flders, r ntes are nt permitted in exam halls. Mbile phnes are nt allwed. Yu have t keep them utside exam halls. Instructrs will answer n questins in the examinatin hall. Attendance and class participatin: Attendance is an expectatin fr all students. Hence, cme n time, switch ff yur mbile, and be a gd participant in the class activities. There is a psitive relatinship between class attendance and perfrmance in the curse. It is expected that all students present n a given day be attentive, plite, and nt a surce f disturbance t the instructr r any student. Questins and cmments, f curse, are always encuraged. If yu miss a class it is yur respnsibility t find ut what material r assignments were presented in class. Office hurs are devted nly t clarify unclear pints nt t repeat class lectures. Please g ver the material t be cvered in a particular lecture befre cming t class. It is very imprtant that yu keep up with the material and take part in class discussin. I want this t be a semester lng dialgue between us. Even thugh a student s grade is nt dependent n class attendance and participatin, they will becme a factr when making decisin n brderline cases. Academic Dishnesty: All students are expected t maintain a high standard f ethics in their academic activities. Hence, any frm f academic dishnesty is cnsidered a serius matter. Academic dishnesty such as cheating, plagiarism, fabricatin, and frgery will nt be tlerated and will be dealt with in accrdance with the university regulatins. Respnsibilities: I believe the main purpse f educatin is t teach students t think effectively. As yu interact with the curse cntents, yu shuld learn general intellectual skills, such as bserving, classifying, analyzing, and synthesizing. I see my primary respnsibility t guide, and mtivate yu as a grup f cmmitted and dedicated students in this learning prcess, and t determine the extent t which yu have mastered the material cvered in this curse. I am cmmitted t this task. By signing up fr this curse, yu have accepted the respnsibility f being an active learner and f participating in the classrm discussin. If yu are nt cmmitted expect yur grade t reflect this. Hwever, I want t see everyne des well. I expect yu t wrk hard in this class and every class. That s part f the reasn why yu are here. Page 3 f 6
Dn't miss an exam. D yur hmewrk. Read the assigned chapter befre yu d the hmewrk. Dn't cram all yur studying in the night befre the exam, fr yu will nt nly be t tired t think, yu will nt be able t prcess all the infrmatin. TENTATIVE COURSE OUTLINE Tpic # Tpics Cvered Chapters 1 1. Intrductin t Managerial Ecnmics What is managerial ecnmics? Firms and their gals (Ecnmics and nnecnmics) Review f mathematical cncepts Chap. 1 and Chap. 2 Nte: Fr review f mathematical cncepts visit www.prenhall.cm/keat 2 2. Demand and Supply Analysis frm Thery t Practice Market demand and supply Determinants f Demand & Supply Market equilibrium & cmparative statics The mathematics f supply and Demand Deriving demand curve frm demand functins Chap. 3 & Appendix 3A 3 3. Demand Analysis: Elasticity Price elasticity f demand Mathematical examples & prblems The determinants f elasticity Demand elasticity and revenue Other elasticities f demand Net r cmbined effect f elasticities Elasticity f supply Mathematical examples and prblems Chap. 4 Page 4 f 6
4 4. Demand Estimatin Overview f regressin analysis Interpretatin f regressin results (simple and multiple regressin R-squared, Tw-tailed t-tests The F-test Mathematical examples and prblems Prblems in use f regressin analysis Chap. 5 5 5. The Thery and Estimatin f Prductin Prductin functins Ttal, average, and marginal prduct Law f diminishing returns Three stages f prductin Optimal input use (single & multiple) The lng run and returns t scale Estimatin f prductin functin Functinal Frms, Cbb-Duglas Prductin functin Prblems and Examples Chap. 6 & Appendix 6A Appendix 6B 6 6. Cst Analysis Definitins and examples f explicit, implicit and pprtunity csts, ecnmic csts and prfits Relatinship between prductin & csts Shrt-Run Cst Functins & Frms Lng run cst functins, Scale ecnmies Prblems and Examples Mathematics f shrt-run cst functins Chap. 7 & Appendix: 7A Page 5 f 6
7 7. Market Structure: Perfect Cmpetitin & Mnply Market structures and characteristics Firm behavir in cmpetitive markets Nrmal & ecnmic prfit Pricing and utput decisins in cmpetitin Cmpetitin prblems and examples Overview f mnply markets Pricing and utput decisins in mnply Prblems and examples: mnply Break-Even analysis Chap. 8 & Appendix 8A 8 8. Market Structure: Mnplistic Cmpetitin and Oligply Overview f mnplistic cmpetitin Pricing and utput decisins in mnplistically cmpetitive markets Overview f ligplistic markets. Market rivalry and mutual interdependence Cmpeting in imperfectly cmpetitive markets Chap. 9 9 9. Special Pricing Practices: Cartel arrangements Price leadership Price discriminatin Nn- marginal pricing Multi-prduct pricing Chap. 10 GOOD LUCK Page 6 f 6