EC561 Managerial Economics
SOUTHEAST MISSOURI STATE UNIVERSITY
Department of Economics and Finance
COURSE SYLLABUS, EC561, Managerial Economics
Revised in October 1989
I. Catalog Description and Credit Hours of Course
Application of microeconomic theory to the practical problems faced by decision-makers in business environment. (3)
II. Prerequisite(s)
MA134 College Algebra
EC215 Principles of Microeconomics
III. Purposes or Objectives of the Course
A. To understand a variety of economic poblems faced by business organizations.
B. To analyze the process of managerial decision making.
C. To apply principles and techniques of economics in solving managerial problems.
IV. Expectations of Students
A. Regular class attendance and participation in class discussion.
B. Satisfactory performance on exams.
C. Satisfactory completion of assignments.
V. Course Outline
A. Introduction
1. Relationships between economics, business practice, and managerial economics
2. Role of the firm in society
3. Need for decision making techniques
4. Review of relevant terms
B. Analysis of Demand
1. Review of demand principles
2. Importance of demand to a firm
3. Price elasticity of demand
4. Income elasticity of demand
5. Cross price elasticity of demand
6. Business use of the concepts of demand and elasticity
C. Simple Forecasting
1. Sources and uses of macroforecasts
2. Microforecasting of demand, costs, sales
D. Production
1. Short run production and diminishing returns
2. Production in the long run
3. Optimal production decisions
E. Costs of Production 6
1. Review of costs for decision making purposes
2. Short run cost analysis
3. Long run cost analysis
4. Learning curves
F. Market Structure Analysis 10
1. Importance of market structure to a firm
2. Pure competition
3. Monopoly
4. Monopolistic competition
5. Oligopoly
G. Pricing Practices 5
1. Cost plus pricing
2. Incremental analysis and pricing
3. Price discrimination
4. Pricing strategies
H. Decision Making under Uncertainty
1. Risk analysis
2. Simple decision making under uncertainty
I. Capital Budgeting
1. Net present value of projects
2. Techniques for evaluating projects
VI. Textbook(s) and/or Other Required Materials or Equipment
Managerial Economics, Pappas, James L. & Hirschey, Mark, 8th edition, Chicago, Dryden Press, 1996.
VII. Basis of Student Evaluation
Satisfactory performance on regularly scheduled exams, quizzes, and homework assignments.
