MBA - Semester I 2012 batch Section A Subject Outline

Subject Name Subject Code Subject Credits

Economic Analysis for Business Decisions (EABD)

MGT502 2 Credit Prof. Ramanna Shetty

080 - 30938172 , rshetty@allaince.edu.in

Instructor

Prof. Ramanna Shetty is a Post Graduate in Economics from Mangalore University and also obtained Post Graduate in Marketing Management from Pondicherry University. He has done M.Phil in Entrepreneurship from M K University. Currently pursuing PhD from NITK Surathkal, Mangalore. NF 003, Learning Centre, University Campus

Office Office Hours

4 - 5 PM
The primary objective of this course is to develop the abilities of students to apply fundamental principles of economics to a wide range of managerial decisions. The focus of this course will be on understanding the theory and principles of microeconomics for applying the same in the real world issues and to take managerial decisions. The students are expected to leave the course with a strong hold on how the tools of microeconomics can be applied to take appropriate managerial decision making. To help the students to understand the behavior of various economic agents and to analyze and explain the application of economic concepts like elasticity of demand, economies of scale and economies of scope in managerial decision making. To facilitate to recognize how economic forces affect organizations and to describe the economic consequences of managerial behavior. To help students to understand different market structures and to analyze how price and quantity are determined in various markets.

Summary/Overview

Aims

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Core Learning Outcomes Learning Outcomes Assessment Criteria

On completion of this unit you should be To achieve the learning outcome you must able to: demonstrate the ability to: 1.
For each presentation topic, case study, and in the Apply the economic way of thinking to business examinations critically analyse the role of economic decisions. factors in managerial decisions. For each presentation topic and in the examination Apply economic theory and methods to identify the importance of each economic agent understand the behavior of various economic (consumers, producers, etc.) to achieve optimum agents. business solution. Analyse and explain the application of economic In the presentation topics, in the case study discussions, concepts like elasticity of demand, economies of and in the examination the managerial applications of scale and economies of scope in managerial these fundamental economic concepts will be assessed. decision making. In the classroom discussions and examination critically Illustrate the equilibrium conditions for cost analyse the effectiveness of cost control strategy, minimization and profit maximization to arrive at including the factors that had an impact on the outcomes, optimum allocation of resources. and identify ways to achieve optimal allocation of resources through problem solving skills. In the presentations, case studies, and in the examination Describe and analyse how price and quantity are critically analyse the structure, conduct and performance determined in various market models like perfect analysis by using some economic indices and also competition, monopoly, monopolistic identify the relevant market structure and price-output competition, and oligopoly. determination in various markets. In case studies and examinations, apply the different Describe and analyze the various objectives of pricing strategies and their implications in various pricing and the pricing strategies. business environment.

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Approach to Learning

The teaching methods will consist of formal lectures, case study analysis, presentations and group discussions. Lectures will include presentation of key theories and concepts. Students will work at their own to identify the fundamental microeconomic concepts and the related theories. Students are expected to read beyond textbook assigned, and to identify on their own further sources of information for complementing their studies. Presentations will be student-driven offering the opportunity for further discussion and clarification of topics that are of special importance and difficulty. Students are encouraged to participate in presentations and class room discussions. Another key objective of the presentations is to develop students communication and presentation skills. The structure of the in-class test will cover the issues discussed in the lecture and presentations. Therefore, students need to show a high degree of dedication and commitment in order to get the maximum benefit from the discussions. Formative feedback will be offered after every presentations, discussions, and case studies to prepare students for the final examination.

Assessment Strategy

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No 1. 2. 3. 4.

Assessment Description of Method* Assessment Method CS PR GA CP Case Study Presentation Group Assignments Quiz/Class participation

Weight % 05 10 05 05

Learning Outcomes Assessed 1 2 3 4 5 6

Submission day/week (assignments) or length (exam) Throughout the course Throughout the course

Dates will be intimated Throughout the course

Outline Teaching Schedule

Sl. No. 1. Chapter Name Introduction to Economics Utility Analysis Contents The Economic Problem Scarcity, Choice and Opportunity Cost Fundamental Problems of an Economy Alternative Economic Systems Cardinal Analysis Law of Diminishing Marginal Utility Ordinal Analysis Indifference Curve and Budget Line Consumers Equilibrium Consumer Surplus Managerial Applications of Utility Analysis. Demand Analysis Law of Demand Elasticity of Demand Demand Forecasting Supply Analysis Law of Supply Elasticity of Supply Market Equilibrium Price Controls. Factors of Production Production with one Variable Input Law of Diminishing Marginal Productivity Production with Two Variable Inputs Isoquants and Isocosts Optimum Combination of Inputs or Producers Equilibrium Returns to Scale. Basic Cost Concepts Short-Run and Long-Run Cost Functions Economies of Scale and Scope Break Even Analysis. Nature of Market Perfectly Competitive Market Environment Supply and Demand Curves Short Run and Long Run Equilibrium of the Competitive Firm Effects of Government Intervention on Price and Output in a Competitive Market. Monopoly Market Sources of Monopoly Price and Output Determination Price Discrimination Conditions for Price Discrimination Price and Output Determination under Discriminating Monopoly Applications for Business Decision Making Market Power. Monopolistic Competition Features Price and Output Determination Product Differentiation Types of Product Differentiation Comparison of Perfectly Competitive Market and Monopolistic Competition. Oligopoly Kinked Demand Curve Collusion and Cartels Price Leadership. Setting the Price Limit Pricing Cost-based Pricing Multi-product Pricing Peak Loads Pricing Transfer Pricing Market Skimming. Total Number of Sessions No. of Sessions 1

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Market Demand and Supply

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Production Analysis

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Cost Analysis

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Perfect Competition

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Monopoly

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Monopolistic Competition Oligopoly

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10. Pricing Strategy

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Recommended Resources Recommended Textbook:

Dominick Salvatore: Principles of Microeconomics, Oxford University Press.

Reference Books:
1. 2. 3. 4. 5. 6. William Boyes and Michael Melvin: Textbook of Economics; 6th e, Biztantra publications. Bobert S. Pindyck, Daniel L Rubinfeld: Microeconomics 6th Edition; Pearson Education Samuelson & Nordhaus, Economics, latest edition, Tata McGraw-Hill, India. John Sloman & Mark Sutcliffe: Economics for Business; Pearson Education, (Text Book). Mankiw: Economics Principles and Applications; Cengage Learning Dominick Salvatore & Ravikesh Srivastava: Managerial Economics, Oxford Higher Education.

Other books you may want to consider are:

Freakonomics, by Steven D. Levitt and Stephen J. Dubner. A. V. Banerjee and E. Duflo (2011) Poor Economics, Random House India. Economics: Private & Public Choice, 11th Edition by James D. Gwartney, Richard L. Stroup, Russell S. Sobel, and David Macpherson. An Enquiry into the Nature and Causes of Wealth of Nations by Adam Smith. The Strategy and Tactics of Pricing: A Guide to Profitable Decision Making, by Thomas Nagle, Reed Holden. Power Pricing: How Managing Price Transforms the Bottom Line, by Robert J. Dolan and Hermann Simon.

Recommended Journals: Economist Economic and Political Weekly The IUP Journal of Monetary Economics The IUP Journal of Public Finance

Useful research resources on internet: http://www.rbi.org.in/home.aspx http://www.worldbank.org/ http://finmin.nic.in/ http://search.ebscohost.com/ http://www.emeraldinsight.com

Database websites: http://www.capitaline.com/user/framepage.asp?id=1 http://www.indiastat.com/default.aspx

Other websites you may want to consider are: http://miltonfriedman.blogspot.com/ http://www.economist.com http://www.ft.com http://www.icrier.org/

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