NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES

NMIMS University, Mumbai

Course outline for Micro Economics for Managers

MBA Capital Market
2007-08

Objective

The broad objectives of the course are:

 To identify the economic forces that affect business organizations
 To understand and apply the basic concepts & principles of managerial economics
that have implications for the decision making by the managers
 To understand elements of competition and its implications

Session Plan /Scope

Session Topic
1. Introduction
Micro & Macro- Economic Issues; Economic resources & problem of scarcity; Choice
problem in economics and optimization
2 & 3. Consumer Behaviour
Indifference Curve analysis; Demand analysis
4. Demand Forecasting
Demand forecasting, techniques, and applications

5. Production
Production functions, factors of production; Average product & marginal product; Law
of Diminishing Marginal Product;
6. Production
Concept of Isoquant, MRTS, Elasticity of substitution, returns to scale
7& 8. Cost of Production
Elementary concepts of various types of costs; concept of long run and
short run cost; expansion path
9. Issues in Producer Behaviour
Scale & Scope economies, Technological change & its effect, horizontal & Vertical
Integration, M&As
10. Interim Presentation
Progress in the Report

11. Market Structure

Various market structures and their characteristics; Introduction to Perfect competition
12. Market Structure
Various issues in Perfect competition
13. Market Structure
Monopoly, Market power & elasticity
14. Market Structure
Monopolistic competition
15. Market Structure
Oligopoly; Introduction to Game Theory and Applications
16. Market Structure & Competition
Analysis of market structure, Introduction to Porter’s theory, effect on competition,
Measures of concentration
17. Introduction to Pricing Strategies
Various methods and tactics, and applications

1
18. Market Failures
Reasons of market failures; private vs. public goods; Theory of public goods; Asymmetry
of information – Moral hazard and incomplete information
19. Revision & Recapitulation; Doubt clearing session
20. Presentations

ALL INSTRUCTIONS TO BE STRICTLY FOLLOWED

Evaluation Pattern

 Group Project 30%

Submission of Brief outline of the project (End of session 5)
Interim presentation (End of session 11)
Report Submission & presentation (End of session 19)

 Assignments 10%
 Short Quiz 10%
Up to session 13 (End of session 14)

 End-term Exam 50%

Entire syllabus

PROJECT

 Prepare Industry Report applying the concepts & tools of microeconomics. Your report
should broadly cover the following points:

o Choose a firm in operation in the Industry (given to you)

o Describe the market structure of the firm
o Analyze competitive position, its strategies and challenges facing the firm
o Apply various forecasting techniques to forecast demand for your industry and the
firm

 Report should be strictly less than 2500 words. Use 1.5 line-spacing with font size11.

References:

• Micro Economics, Pindyck & Rubinfeld

• Managerial Economics, Damodaran S
• Managerial Economics, Salvatore
• Paul Samuelson & Nordhaus: Economics
• Baumol, W J & Blinder, A: Economics: Principles & Policy
• Henderson & Quandt