Managerial Economics (Eco 685)

Learning Objectives: Managerial Economics (Eco 685)

Learning Objectives

  1. Course-specific knowledge.
    1. Production and Cost Theory. Students, given data on production and input usage will be able to derive the combination of inputs (machines, unskilled labor, skilled labor, etc.) which maximizes profits. Students, given data on prices and costs, should be able to derive the optimal quantity of goods to produce.
    2. Pricing. Students, given data on the firms costs, sales price, and sales, will be able to derive the price to charge that maximizes profits under a variety of circumstances, including perfect and imperfect competition and when the firm can identify groups of consumers who are willing to pay different amounts.
    3. Business Strategy. Students will be able to use game theory to make decisions in environments with a small group of people or firms, including negotiation and price wars between two firms.
  2. Skill enhancement.
    1. Quantitative Skills. The course takes a scientific approach to business decisions, where optimal decisions are computed mathematically based on formulas derived from firm level data. Thus the students will significantly enhance their quantitative skills.
    2. Problem Solving Skills. Students learn how to anticipate how other firms and consumers will respond to decisions they make, and how to encorporate these responses into their own decisions. In doing so, students significantly enhance their problem solving skills.

Measurement of Outcomes

  1. Course-specific knowledge.
    1. Production and Cost Theory. Outcomes are assessed using one homework and one exam.
    2. Pricing. Outcomes are assessed using one homework and one exam.
    3. Business Strategy. Outcomes are assessed using one homework and one exam.
  2. Skill enhancement.
    1. Quantitative Skills. All homeworks and exams are quantitative in nature. Students are given formulas on exams, but must do the calculus themselves.
    2. Problem Solving Skills. Almost all homeworks and exam questions are problems. No multiple choice (or similar) questions are assigned. In addition, at least one homework question is a case-study whereby students take an actual problem faced by a firm, formulate the problem, and solve it using the methods derived in class. Finally, most problems are of the type where students must apply what they know to new and unfamiliar problems.