Rose-Hulman Institute of Technology / Department of Humanities & Social Sciences / K. Christ

SL 351, Managerial Economics

Managerial economics is chiefly concerned with the application of economic tools of analysis to business management.  SL 351 is a self and society elective, and is a requirement for the Management Studies Certificate.  SL151, Principles of Economics (or its equivalent) is a prerequisite.  The course also assumes a basic understanding of fundamental statistical concepts.

Syllabus (Fall 2008)

Problem Sets / Assignments (Fall 2008): Part 1 Solutions
  Part 2 Solutions
  Part 3 Solutions
  Part 4 Solutions
  Part 5 Solutions

 

Data Sets (Fall 2008): Smyth Pies Baseball New Cars EDP Branded RHIT Pizza Export
               

Schedule for Fall 2008

Date Topics [Textbook Reading Assignments] Links
September 4 Introduction / Market valuations / Normal and "abnormal" returns [H1, 3 - 18] Lecture support for September 4 - 5

Here are some nice introductions to the topics to be covered in this class: 

Information on Porter's "Five Forces" framework.
September 5 Basic economic theory of the firm / applicable optimization techniques [H1, 19 - 22; H2, all]  
September 8 Fundamentals of demand and supply [H3] Lecture support for September 8 - 9
September 9 Firm and industry supply, short run and long run [H3, 107 - 109]  
September 11 Demand elasticity [H4, 134 - 149] Lecture support for September 11 - 12
September 12 Extensions of the elasticity concept  
September 15 Review  
September 16 Exam 1  
September 18 Introduction to demand estimation [H5] Lecture support for September 18 - 22
September 19 OLS estimation techniques using MS Excel or EViews A helpful page for using MS Excel "Linest" function to do OLS Regression.

 
September 22 Demand estimation cases  
September 23 Introduction to business forecasting / forecast evaluation [H6, 199 - 203, 220 - 229] Lecture support for September 23 - 26
September 25 Properties of time series /extrapolation and exponential smoothing [H6, 203 - 209, 217 - 220]  
September 26 Macroeconomic considerations relevant to business forecasting [H6, 210 - 217]  
September 29 Review  
September 30 Exam 2  
October 2 Production and cost theory [H7] Lecture support for October 2 - 7
October 3 Short-run production and cost behavior [H8, 293 - 303]  
October 6 Topics relevant to production and cost [H8, 289 - 293, 303 - 319]  
October 7 Market structure and competitive markets [H10] Lecture support for October 9 - 13
October 9 Competitive labor markets / Shareholder equity / Profit behavior in competitive markets [H11]  
October 10 Team project work day  
October 13 Review  
October 14 Exam 3  
October 16 Fall Break  
October 17 Fall Break  
October 20 Imperfect competition:  monopoly, monopsony, monopolistic competition [H12; H13, 501 - 510] Lecture support for October 20 - 21
October 21 Imperfect competition:  formal models of oligopoly [H13, 510 - 536]  
October 23 Game theory / applications to oligopoly [H14, 5549 - 561] Lecture support for October 23 - 24
October 24 Game theory and competitive strategy [H14, 563 - 574]  
October 27 Pricing with market power / price discrimination and two-part pricing [H15, 585 - 600] Lecture support for October 27 - 28
October 28 Topics related to pricing [H15, 600 - 610] Eugster, et al, "Bringing Discipline to Pricing", The McKinsey Quarterly, 2000 Number 1, 133 - 139.
October 30 Review  
October 31 Exam 4  
November 3 Economic treatment of risk / description and measurement / insurance [H16, 631 - 644] Lecture support for November 3 - 6.
November 4 Dealing with and managing risk [H16, 644 - 656] Buehler and Pritsch, "Running With Risk", The McKinsey Quarterly, 2003 Number 4, 40 - 49.
November 6 Capital budgeting - basic concepts [H17, 671 - 687] Lecture support for November 7 - 10.
November 7 Topics related to capital budgeting / business investment [H17, 687 - 696] Extra notes on cost of capital.
November 10 Corporate governance / transaction costs / agency problems [H18, 713 - 720] Lecture support for November 11.

Jonathon Day, "The New Economics of Organization", The McKinsey Quarterly, 1998 Number 1, 4 - 18.
November 11 Governance structure / legal and institutional considerations [H18, 720 - 737] Oliver Hart, "Corporate Governance:  Some Theory and Implications", The Economic Journal, Vol. 105, No. 430 (May 1995), pp. 678-689 (JSTOR).
November 13 Macroeconomics for managers [H19, and Handout] Lecture support for November 13 - 14.
November 14 Macroeconomics for managers