Francis Marion University
School of Business
Economics 710 – Managerial Economics
Communication:
Professor
Office
Email
Phone:
Office hours
Dr. Johnathan Munn
Founder’s Hall 263B-1
jmunn@fmarion.edu
843-661-1496
Monday & Wednesday 1:30pm-3:30pm
Tuesday and Thursday 9:00am – 12:00pm
And by appointment
It is important to me that I am available to you. If you need to see me outside of class and aren’t able to
come by during office hours, please schedule an appointment. I usually check email several times a day.
It is always better to communicate with me about the things that you are having difficulty with sooner
rather than later. Do not wait until exam time to see me about questions you may have. This course will
builds on itself and if you do will find yourself further and further behind.
Texts:
Thomas, C., and S. C. Maurice. Managerial Economics. McGraw-Hill Irwin, 11th ed. 2012
Objective: To provide an understanding of the most important microeconomic concepts and illustrate
how they are applied to business and administrative decision-making. During this course we examine the
process of how individuals and firms optimize their resources in the face of binding constraints. We will
take an in-depth look at the managerial decision-making process and its tools, including such topics as
forecasting demand, cost analysis, and production and resource pricing. We will examine different types
of market structure and how they affect market outcomes. Throughout the course, our focus will be on
understanding microeconomic theory sufficiently and applying it to understand real world issues in order
to make economically sound decisions in a variety of business situations.
Prerequisite: Admission to the MBA program or approval of the Dean of the School of Business
Lecture Attendance: Strongly recommended. There is no substitute for regular class attendance. Poor
attendance will make it difficult for you to contribute to class discussions and will therefore prove costly
to you and to your classmates. Subject to the effect of absences on your class-participation grade, you
are free to choose the rate of attendance that suits you best.
Students are expected to arrive on time and to remain for the entire class. If you need to leave class
early, please let me know before the class starts and seat yourself close to the door. Enrollment in a
course obligates the student not only for prompt completion of all work assigned but also for punctual
and regular attendance and for participation in whatever class discussion may occur. It is the student's
responsibility to keep informed of all assignments made. Absences, whether excused or unexcused, do
not absolve the student from this responsibility.
Blackboard: Blackboard allows you to view course information, documents, and other related material
from the course. This syllabus has been posted on the website, as will homework assignments, readings,
and anything else I think will be helpful. It will be useful to check the blackboard page for this class often.
Any readings or assignments that I plan to hold you accountable for will be posted to blackboard by close
of business (5:00pm) the Friday before our next class.
Examination: You are responsible for all material covered in class lectures, the textbook, supplemental
readings and out of class assignments. There will be two exams in this course, which together will
account for 60% of your grade. The remaining portion of your final grade will be determined by takehome problems, other assignments, and class participation. The weights for your final grade are as
follows:
First Exam
30%
Second Exam
30%
Out of Class Assignments
30%
Class Participation
10%
Students are not permitted to leave the room during the exam. Please make sure you take restroom,
food, and water breaks before your arrive for the exam. Students who know that they will be unavailable
to take the in-term exam must information me at least ten days before the exam date.
Grading: Grades in this course will be awarded on a competitive basis, according to the criteria laid out in
the 2012-2013 course catalog. The following system will be employed: A (distinction), B+, B (acceptable),
C+, C (marginal), F (no credit).
Rule of Academic Responsibility: It is the responsibility of every student at Francis Marion University to
adhere steadfastly to truthfulness and to avoid dishonesty, fraud, or deceit of any type in connection with
any academic program. Any student who violates this rule or who knowingly assists another to violate this
rule shall be subject to discipline, as laid out in code of student conduct.
(http://www.fmarion.edu/students/handbook)
Class Conduct: Your instructor and classmates deserve courtesy. Please arrive on time and stay until
class ends. Disruptive behavior constitutes grounds for dismissal from the course.
Students with Disabilities: Students with disabilities that have been certified by the Office of Counseling
and Testing will be appropriately accommodated. I should have all needed documentation from the
Office of Counseling and Testing no later than one week before the accommodations requested by the
Director of Counseling and Testing are needed.
General Disclaimer: Life offers no warranties, expressed or implied, and neither do I. Although I try to
make the learning process fun and fair, remember that both are in the eye of the beholder. I reserve the
right to make changes to the syllabus at any time during the course, as circumstances warrant. Caveat
emptor.
"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but
from their regard to their own interest. We address ourselves, not to their humanity but to their self-love,
and never talk to them of our necessities but of their advantages."
~ Adam Smith
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TENTATIVE OUTLINE:
Part I: Some Preliminaries
Chapter 1: Managers, Profits, and Markets
 We will review basic economic concepts such as: opportunity cost, Economic cost, the
difference between implicit and explicit costs, and the difference between accounting profit
and economic profit.
Chapter 2: Demand, Supply, and Market Equilibrium
 We will review basic economic concepts such as: the basic model of supply and demand
 We will discuss the basic model of supply and demand. We examine how to interpret
demand and supply functions and how to find the market equilibrium.
Chapter 3: Marginal Analysis for Optimal Decisions
 In this section we discuss the importance of marginal analysis. We begin by examining
optimal decision making in an unconstrained setting. We then look at constrained
optimization (e.g. maximizing profit under a given set cost constraints). The importance of
understanding what are and are not relevant cost is stressed.
Chapter 4: Basic Estimation Techniques
 In this section we will review of linear regression and multiple regression techniques. We
will discuss how to properly built models that cover a variety of business applications within
Excel. We also discuss tests for significance such as: t-test, p-values, and F-statistics.
Part II: Demand Analysis
Chapter 5: Theory of Consumer Behavior
 In this section we discuss the basic assumptions underling the theory of consumer behavior.
We develop a model that illustrates how consumers maximize their utility based on their
preferences and the budget constraint they face.
Chapter 6: Elasticity and Demand
 In this section we discuss how to calculate and interpret various point elasticities such as:
price elasticity of demand, cross-price elasticity, and income elasticity. We will discuss how
each is used in real world applications.
Chapter 7: Demand Estimation and Forecasting
 Building on several previous sections, in this section we discuss various demand estimation
techniques. We begin by looking at how to estimate demand when firms have market
power. We then briefly discuss more advanced techniques that can be employed to
estimate demand in competitive markets.
Part III: Production and Cost Analysis
Chapter 8: Production and Cost in the Short Run
 In this section we discuss the difference between production in the short run and long run. I
will introduce the concept of cost curves and how to use them to analyze the relationship
between short run production and cost curves.
Chapter 9: Production and Cost in the Long Run
 We extend out discussion from chapter 8 (and chapter 3) to include the decision making in
the long run. Here we discuss the decision rule for finding the optimal combination of inputs
in the long run production process.
Chapter 10: Production and Cost Estimation
 We used tools developed in previous chapters to estimate short-run production function.
We also discuss issues that arise when measuring cost, correcting data for inflation, and cost
function estimation.
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Part IV: Profit-Maximization in Various Market Structures
Chapter 11: Managerial Decision in Competitive Markets
 In this section we use microeconomic concepts to examine profit maximization in a
competitive market. We find that the profit maximizing firm uses marginal analysis to set
production where marginal revenue equals marginal cost.
Chapter 12: Managerial Decisions for Firms with Market Power
 In this section we use microeconomic concepts to examine profit maximization for a firm
with market power. This market power allows the firm to manipulate the price and we find
that the market outcome is much different than under a competitive environment.
However, this difference is driven by the difference in market environment, not a difference
in firm behavior. The profit maximization decision rule remains the same whether a firm is
in a perfectly competitive market or a monopoly. The conditions of the market drive the
ultimate market outcome.
Part V: Advanced Managerial Decision Making
Chapter 14: Advanced Pricing Techniques
 Often firms attempt to increase profits by engaging in price discrimination. We will discuss
optimal pricing when a firm can engage in price discrimination. We will look at various forms
of price discrimination and examples of when they are beneficial and when they are not.
Chapter 16: Government Regulation of Business
 We conclude with a discussion of the relationship between market competition, economic
efficiency, and government intervention.
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