BROCK UNIVERSITY

Economics 2P23 - Managerial Economics

Winter Term 2017
Instructor
Office
E-mail
Phone
Office Hours
Course web-site

Professor J. Kushner
Plaza 425
jkushner@brocku.ca
905-688-5550,3165
Please feel free to drop in at any time, or by appointment.
Isaak / Sakai (https:/lms.brocku.ca/)

Lectures:

Mon., Wed., Fri. 10-11, Th.242

Mon., Wed., Fri. 11-12,
Th.242

Textbook: Optional

Baye, Michael R. and Jeffrey T. Prince, Eighth Edition, Managerial Economics and
Business Strategy, Customized version. The price of the version customized for this
course is $60.95 plus applicable taxes compared to the previous years full version
which was priced at approximately $215. Any prior edition will do.

Referenced Material: Thompson, A. A. and J. P. Formby, Economics of the Firm: Theory and Practice,
Sixth Edition (on reserve)
Pindyck and Rubinfeld, Microeconomics (on reserve)
Hirshleifer, Price Theory and Application (on reserve)
Prerequisites:

Econ 1P91 and one of Math 1P01, 1P05 or 1P97.

Please note you cannot receive credits for both ECON 2P21 and ECON 2P23.

Instructions:
1.
There will be three lecture hours per week, plus a tutorial hour devoted for the most part to
applications of the theory. Tutorials will begin January 16, 2017.
2.

A twenty minute test will be given every Wednesday in class. Tests will be returned in tutorials and
those not picked up will be placed in Plaza 421.

3.

Students are responsible for the assigned questions on the following page.

Breakdown of marks:
Tests (including classroom performance)*
Mid-term Exam**, Saturday, March 11, 8:30 A.M.

30%
30%

Final Examination***

40%

*If you miss a weekly test and have a medical certificate or obtained prior permission, your other work will
receive a higher weight.
** If you miss the mid-term, there is no make-up. If you have a medical certificate or obtained prior
permission, the final will be weighted at 70%.
*** If you miss the final and have a medical certificate, you will write the final in the following term when it
is scheduled.

Course Outline and Required Readings

1.

Review of Supply and Demand

Baye and Prince, Chapter 2, 3
Equilibrium of Supply and Demand
Applications
- Effect of Per Unit Taxes on Consumers and Producers
- Effect of Ad Valorem Tax on Consumers and Producers
- Introduction of an Import Supply and Export Demand; Hirshleifer, Chapter 2,
pp. 34-41 (on reserve)

2.

Demand: Indifference Curve Analysis and the Attribute Model

Baye and Prince, Chapter 4
Applications - Attribute Theory; Thompson, Chapter 4, pp. 88-94 (on reserve)
- Conditional versus Unconditional Grants; Pindyck and Rubinfeld, pp. 76-78 (on reserve)
- Marketing Strategies

3.

Supply: Production, Costs

Baye and Prince, Chapter 5

Returns to Scale, Pecuniary Economies, and Economies of Scale

4.

Markets and Firms: Prices and Quantities

a)
Perfect Competition: Baye and Prince, Chapter 8
b)
Monopoly: Baye and Prince, Chapter 8, Chapter 11, p. 404-17
c)
Monopolistic Competition, Baye and Prince, Chapter 8
d)
Oligopoly: Baye and Prince, Chapter 9
- Kinked Demand Curve
- Cartels
- Dominant Firm Price Leadership

5.

Pricing Strategies for Firms

Baye and Prince, Chapter 11

6.

Game Theory Applications (tentative)

Baye and Prince, Chapter 10
ASSIGNED QUESTIONS
Chapter

Baye and Prince Questions

Ch.2
Ch.3
Ch.4
Ch.5

2, 4,6,8,11,12
2, 3, 4 5, 11, 12
3,10,15
1, 13, 17

Ch.8
Ch.11,

2, 4,5,14
4, 9,16

Thomson questions

Thompson, Ch.3:5,6; Ch.4:1,3,5,8,9,13

Thompson, Ch.6:2, 3; Ch.7:2, 3, 4;
Ch.8:4, 6

Economics 2P23
All you need to know about calculus
Winter 2017
Rules of Differentiation
1.

If y = xn

dy/dx = nxn-1

2.

If y = x

3.

If y = axn

4.

If y = a + bxn

dy/dx = bnxn-1

5.

If y = xn + xm

dy/dx = nxn-1 + mxm-1

6.

If y = (4x3 + 2x) x2

dy/dx = 1x1-1 = 1xo = 1

dy/dx = anxn-1

dy/dx = (4x3 + 2x) d(x2)/dx + x2 (d(4x3 + 2x)/dx) = (4x3 + 2x)2x2-1 + x2(12x2 +

2)
= = 8x 4 + 4x2 + 12x4 + 2x2 = 20x4 + 6x2

or multiply out and then differentiate

i.e. y = (4x3 + 2x) x2 = 4x5 + 2x3
dy/dx = 20x4 + 6x2
Partial Differentiation
When we have a function of more than one variable, for example TU = x2y + 2x 3 + 3y2 we might
want the derivative with respect to one variable only. For example, to obtain the partial derivative of TU
with respect to x, the rules are the same as above where all variables but one are constant. Examples:
1.

TU = x2y
TU / x = y 2x2-1 = 2yx
TU / y = x2 1y1-1 = x2

2.

TU = xy + x + y2
TU / x = y1x1-1 + 1x1-1 = y + 1
TU / y = x1y1-1 + 2y2-1 = x + 2y

Other Information
Accommodation Policy: As part of Brock's commitment to a respectful work and learning environment, the
University will make every reasonable effort to accommodate all members of the university community with
disabilities.If you require academic accommodations related to a documented disability, you are encouraged
to contact the Student Development Centre (4th floor Schmon Tower, ex. 3240). You are also encouraged
to discuss any accommodations with the instructor well in advance of due dates.
Academic Accommodation due to Religious Obligations: Brock University acknowledges the pluralistic
nature of the undergraduate and graduate communities such that accommodations will be made for students
who, by reason of religious obligation, must miss an examination, test, assignment deadline, laboratory or
other compulsory academic event. Students requesting academic accommodation on the basis of religious
obligation should make a formal, written request to their instructor(s) for alternative dates and/or means of
satisfying requirements.
Respect Policy: Brock University is committed to building and maintaining a diverse and inclusive
community where our students, staff, faculty, course participants, volunteers and visitors can work and learn
in an environment that respects the dignity and worth of members of the Brock Community. Each individual
has the right to participate, learn and work in an environment that promotes equal opportunities and
prohibits all forms of harassment and discrimination. Each individual has the responsibility for his/her own
behaviour and actions and for recognizing and supporting the right of all individuals to dignity at work and
study and to maintain an environment in which this can flourish.
Disruptive behavior such as talking or texting during class is disrespectful to other students and is not permitted.
Accordingly, if you feel obligated to text or talk in class, I would ask (and in fact insist) that you not attend
classes. Laptops are of course permitted for note taking.

Academic Integrity: Academic misconduct is a serious offence. The principle of academic integrity,
particularly of doing ones own work, documenting properly (including use of quotation marks, appropriate
paraphrasing and referencing/citation), collaborating appropriately, and avoiding misrepresentation, is a core
principle in university study. Students should consult Section VII, Academic Misconduct, in the
Academic Regulations and University Polices entry in the Undergraduate Calendar, available at
http://brocku.ca/webcal to view a fuller description of prohibited actions, and the procedures and penalties.
Intellectual Property Notice: All slides, presentations, handouts, tests, exams, and other course
materials created by the instructor in this course are the intellectual property of the instructor. A
student who publicly posts or sells an instructors work, without the instructors express consent,
may be charged with misconduct under Brocks Academic Integrity Policy and/or Code of Conduct,
and may also face adverse legal consequences for infringement of intellectual property rights.
Medical Exemption Policy: The University requires that a student be medically examined in Health
Services, or by an off-campus physician prior to an absence due to medical reasons from an exam, lab, test,
quiz, seminar, assignment, etc. The Medical Certificate can be found at: http://www.brocku.ca/healthservices/policies/exemption
Important Dates
Monday, January 9, 2017. First day of classes.
Monday, February 20-24, 2017. Reading week- no classes will be held.
Friday, April 7, 2017. Last day of classes.
Mon., April 10, 2017. Snow days - day of the week missed will determine the replacement date of classes
Friday, April 14, 2017. Good Friday- University closed.
Tuesday, April 11-26, 2017. Exam period.