Managerial Economics

Teacher

Dr. Anjali Dash

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Course Name : Managerial Economics

Code(Credit) : CUTM1212(4-0-2)

Course Objectives

To apply micro economic concepts and techniques in evaluating business decisions taken by firms
How tools of standard price theory can be employed to formulate a decision problem, evaluate alternative courses of action and finally choose among alternatives
Acquire conceptual and theoretical knowledge of microeconomics in management perspective;
Understand and appreciate the tools of microeconomics and their applications;
Develop the ability to evolve business/management strategy using economic reasoning;
Appreciate the new challenges to business management in the internet age
Appreciate the linkages between economics and the functional areas of business

Course Outcomes

COS	COURSE OUTCOMES	MAPPING COS WITH POS (High-3; Medium-2; Low-1)
CO1	Acquire the conceptual and theoretical knowledge of microeconomics which is relevant for evaluating economic behavior of an individual economic agent.	PO1(3)
CO2	Demonstrate the use of microeconomic concepts like utility satisfying and maximizing traits of consumers, elasticity and opportunity cost in strategic planning; develop an economic perspective of business problems being a leader in future in digital economy	PO2(3) PO5(2) PO9(3)
CO3	Evaluate and compare the various types of market structures and use them when planning price policy of a firm and industry and communicate ideas with the policy maker	PO3(3) PO4(1)
CO4	Understand and appreciate the production dynamics – including cost, revenue and profit considerations and according frame policy to remove disequilibrium in market structure	PO6(3) PO7(2)
CO5	Learn the optimization functions for both consumer and producer equilibrium; help to the students how to sustainable resources and utilised economic theory on their day to day life	PO8(3) PO10(3)

Course Syllabus

Module I: Economics: Central problem of an economy. Theory of consumer behaviour: cardinal utility theory, ordinal utility theory(indifference curves, budget line, consumer choice, price effect, substitution effect, income effect for normal, inferior and giffen goods). Demand, Supply and Market equilibrium: individual demand, market demand, individual supply, market supply, market equilibrium; Elasticity of demand and supply.

Module II:Producer and optimal production choice: optimizing behaviour in short run (geometry of product curves, law of diminishing marginal productivity, three stages of production), optimizing behaviour in long run (isoquants, isocost line, optimal combination of resources) Costs and scale: traditional theory of cost (short run and long run, geometry of cost curves, envelope curves), modern theory of cost (short run and long run), economies of scale.

Module III: Theory of firm and market organization: perfect competition (basic features, short run equilibrium of firm/industry, long run equilibrium of firm/industry, effect of changes in demand, cost and imposition of taxes) ; monopoly (basic features, short run equilibrium, long run equilibrium, effect of changes in demand, cost and imposition of taxes, comparison with perfect competition, welfare cost of monopoly), price discrimination; monopolistic competition (basic features, demand and cost, short run equilibrium, long run equilibrium, excess capacity)

Module IV: Factor market: demand for a factor by a firm under marginal productivity theory (perfect competition in the product market, monopoly in the product market), market demand for a factor, supply of labour, market supply of labour, factor market equilibrium.

Readings:

Dominick Salvatore (2009). Principles of Microeconomics (5th ed.) Oxford

University Press

Lipsey and Chrystal. (2008). Economics. ( 11th ed.) Oxford University Press
Koutosyannis (1979). Modern Micro Economics. Palgrave Macmillan
Pindyck, Rubinfeld and Mehta. (2009). Micro Economics. (7th ed. ). Pearson

Session Plan

Session 1

Introducing Managerial Economics Introduction ME

What is Economics https://www.youtube.com/watch?v=2YULdjmg3o0

https://www.youtube.com/watch?v=bZr2VTLQE9U

Session Plan

Session 2

Introduction to economic problem Central problem ME

https://www.youtube.com/watch?v=2YULdjmg3o0

https://www.youtube.com/watch?v=bZr2VTLQE9U

Session 3

Demand: Individual and Market Demand

Law of Demand

https://www.youtube.com/watch?v=QvGLcCTXk9o

Demand

Session 4

Elasticities of demand and its types Different-Degrees-of-Price-Elasticity-of-Demand AD

https://www.youtube.com/watch?v=zpRhdwlr1m0

https://www.youtube.com/watch?v=dc7ZQwv-xLQ

https://www.youtube.com/watch?v=FgSSLAWq_nE

Session 5

Point elasticity and determinants of price elasticity

https://www.youtube.com/watch?v=zpRhdwlr1m0

https://www.youtube.com/watch?v=eo7bMHDwZiA

Different Degrees of Price Elasticity of Demand

Session 6

Elasticity of Supply

https://www.youtube.com/watch?v=4bDIm3j-7is

Supply

Session 7

Cardinal utility theory- Law of diminishing marginal utility

https://www.youtube.com/watch?v=YhqqWKw_OGs

https://www.youtube.com/watch?v=wFrGhooQheU

Utility

Session 8

Cardinal utility theory- Law of equi-marginal utility

https://www.youtube.com/watch?v=LOjyVoGTGj8

Allocating Income to Maximize Utilty

Session 9

Introduction to ordinal utility theory

https://www.youtube.com/watch?v=wrdib31J7wg

Ordinal Utility Theory

Session 10

Indifference curve analysis Indifference-Curve-and-its-Properties

https://www.youtube.com/watch?v=i6RPEjpOCVI

Session 11

Budget Constraints Budget line

Session 12

Consumer's equilibrium through Indifference Curve

Session 13

Project 1 - Impact of Covid 19 on Street Vendors

Session 14

Introduction to Production- Optimal production choice

Session 15

Law of Diminishing Marginal Productivity/Law of Variable Proportion

https://www.youtube.com/watch?v=lt6LpwBNSlM

Session 16

Project 1- Discussion and Review

Session 17

Project 1- Discussion and Review

Session 18

Project 1

Session 19

Project 1

Session 20

Laws of Returns to Scale/ Production function in the long run

Session 21

Introduction to Costs Diminishing-Returns-and-U-Shaped-Cost-Curves

Traditional Theory of Costs

Session 22

Short-run Cost Functions

Session 23

Economies of Scale

https://www.youtube.com/watch?v=6ihehRMtRWc

https://www.youtube.com/watch?v=rYvzM_tayY4

Session 24

Presentation on Project 1

Session 25

Presentation on Project 1

Session 26

Presentation on Project 1

Session 27

Theory of Firm and Market- Market structure

https://www.youtube.com/watch?v=QJnP8jzBjvk

https://www.youtube.com/watch?v=z7g6rFjvvkU