University of the Immaculate Conception COLLEGE OF ACCOUNTANCY AND BUSINESS EDUCATION Course Code Course Title Credit units Class Schedule : : : : ECON002 Managerial Economics 3 M-F, 8:00-11:00am Course Description : This course focuses on the science of directing scarce resources to manage cost effectively. Its application to business covers managerial decisions in relation to customers including pricing and advertising, suppliers, competitors or the internal workings of the organization. It also deals with the new economy that emphasizes the importance of network effects, and scale and scope economies. COURSE OUTCOMES : CO 1. CO 2. Understand how the firm maximizes profit and understanding behavior in different type of market structure. Develop students’ capacity to analyze the economic environments in which business entities operate and understand how managerial decisions can vary under different constraints that each economic environment places on a manager’s pursuit of his/her goals. Its focus will be on analyzing the functioning of markets, the economic behavior of firms and other economic agents under various market structures, and the economic and social implications of the outcomes COURSE OUTLINE Section 1 Chapter 1 : Introduction 1.1 Using economics to solve problems 1.2 Problem-Solving Principles 1.4 Ethics and Economics Week 1 June 10-11, 2020 COURSE EVALUATION ∑ππ=1 πΆππ ππππππππ πΊππππ = 70% ( ) + 30%πΈπ₯ππ π CABE ECON002: Managerial Economics Summer 2020 Page 1 of 12 π π πΆππ = 70% ∑ π΄ππ + 30% ∑ ππΏπ΄π§ π=1 π§=1 Where 1. AT = Assessment Task 2. CO = Course Outcome 3. TLA = Teaching Learning Activities (e.g. Quiz, Recitation, Laboratory Activity, etc.) TOPIC 1 PROBLEM SOLVING LEARNING OBJECTIVES: At the end of the lesson, the student will be able to: a. Understand the definition of Managerial Economics b. Analyze the Problem-Solving Principles c. Apply rational-actor paradigm INTRODUCTION What is economics? Understanding the discipline ο· Why are some countries rich and some countries poor? ο· Why do women earn less than men? ο· How can data help us understand the world? ο· Why do we ignore information that could help us make better decisions? ο· What causes recessions? Economics can help us answer these questions. Below, we’ve provided links to short articles that illustrate what economics is and how it connects to our everyday lives. Economics can be defined in a few different ways. It’s the study of scarcity, the study of how people use resources and respond to incentives, or the study of decision-making. It often involves topics like wealth and finance, but it’s not all about money. Economics is a broad discipline that helps us understand historical trends, interpret today’s headlines, and make predictions about the coming years. Economics ranges from the very small to the very large. The study of individual decisions is called microeconomics. The study of the economy as a whole is called macroeconomics. A microeconomist might focus on families’ medical debt, whereas a macroeconomist might focus on sovereign debt. (https://www.aeaweb.org/resources/students/what-is-economics) Managerial Economics Managerial economics is about the application of economic theory and methods to business decision-making. Decision-making involves a number of steps: problem perception, definition of objectives, examination of constraints, identification of strategies, evaluation of strategies and determination of criteria for choosing among strategies. (9file:///D:/PDF%20Books/Managerial%20Economics%20A%20Problem%20Solving%20Approac h.pdf) Time allotment/ duration: 6 hours Core-Related values and Biblical Reflection: Excellence: Competence Matthew 7:7: Ask, and it will be given to you; seek and you will find; knock, and it be opened to you (ESV) LEARNING CONTENT CABE ECON002: Managerial Economics Summer 2020 Page 2 of 12 Introduction video Watch the Video from https://www.youtube.com/watch?v=CJOZn-MAx7w Ethics and Economics Rational Action Theory or Choice https://www.youtube.com/watch?v=JaKMimJPxyA LEARNING EVALUATION Teaching-Learning Activities TLA 1: CASE TLA 2: Online forum/ Recitation TLA 3: Individual Problem ASSESSMENTS AT1. Online Quiz on Chapter 1 through google forms ASSIGNMENTS Individual assignment. Short essay. Search about how economics useful in business. RUBRICS FOR GRADING A. Reflections 0 Student is unable to elicit the ideas and concepts from the readings and video indicating that s/he has not read the prescribed reading or watched the video 1 Student is able to elicit the ideas and concepts from the readings and video but shows erroneous understanding of these 2 Student is able to elicit the ideas and concepts from the readings and video and shows correct understanding of these 3 Student not only elicits the correct ideas and concepts from the readings and video but also shows evidence of internalizing these points 4 Student elicits the correct ideas and concepts from the readings and video shows evidence of internalizing these, and consistently contributes additional thoughts to the Core idea B. Quizzes: Use the numeric scores C. Problem Set 0 CABE 1 ECON002: Managerial Economics 2 3 Summer 2020 4 Page 3 of 12 Student did not make any attempt to solve any of the problems in the problem set or prove any of the statements in the quiz Student attempted to solve 50% of the problems in the problem set or displayed logical reasoning 50% of the time in attempting to prove the statement/s in the quiz Student attempted to solve all the problems in the problem set or displayed logical reasoning 75% of the time in attempting to prove the statement/s in the quiz Student is able to completely solve 50% of the problems in the problem set or completed 75% of the time in attempting to prove the statement/s in the quiz Student is able to completely solve 75% of the problems in the problem set or completed all the proof/s in the quiz REFERENCES Main Reference Book Froeb, L. Managerial Economics, Cengage Philippine Edition (2019) Online resources CABE ECON002: Managerial Economics Summer 2020 Page 4 of 12 TOPIC 2 The One Lesson in Business LEARNING OBJECTIVES: At the end of the lesson, the student will be able to: INTRODUCTION Time allotment/ duration: 15 hours Core-Related values and Biblical Reflection: Excellence: Competence Matthew 7:7: Ask, and it will be given to you; seek and you will find; knock, and it be opened to you (ESV) LEARNING CONTENT LEARNING EVALUATION Teaching-Learning Activities TLA 1: CASE TLA 2: Online forum/ Recitation TLA 3: Individual Problem ASSESSMENTS AT1. Online Quiz on Chapter 2 through google forms ASSIGNMENTS Individual assignment. Short essay. Research about Sunk-cost fallacy and hidden cost fallacy. RUBRICS FOR GRADING D. Reflections 0 Student is unable to elicit the ideas and concepts from the readings and video indicating that s/he has not read the CABE 1 Student is able to elicit the ideas and concepts from the readings and video but shows erroneous 2 Student is able to elicit the ideas and concepts from the readings and video and shows correct understanding of these ECON002: Managerial Economics 3 Student not only elicits the correct ideas and concepts from the readings and video but also shows evidence of Summer 2020 4 Student elicits the correct ideas and concepts from the readings and video shows evidence of internalizing these, and consistently Page 5 of 12 prescribed reading or watched the video understanding of these internalizing these points contributes additional thoughts to the Core idea E. Quizzes: Use the numeric scores F. Problem Set 0 Student did not make any attempt to solve any of the problems in the problem set or prove any of the statements in the quiz 1 Student attempted to solve 50% of the problems in the problem set or displayed logical reasoning 50% of the time in attempting to prove the statement/s in the quiz 2 Student attempted to solve all the problems in the problem set or displayed logical reasoning 75% of the time in attempting to prove the statement/s in the quiz 3 Student is able to completely solve 50% of the problems in the problem set or completed 75% of the time in attempting to prove the statement/s in the quiz 4 Student is able to completely solve 75% of the problems in the problem set or completed all the proof/s in the quiz REFERENCES Main Reference Book Froeb, L. Managerial Economics, Cengage Philippine Edition (2019) Online resources CABE ECON002: Managerial Economics Summer 2020 Page 6 of 12 TOPIC 6 Economies of Scale and Scope LEARNING OBJECTIVES: At the end of the lesson, the student will be able to: a. Evaluate the effect of law of diminishing marginal returns to decision making b. Differentiate economies of scale vs economies of scope INTRODUCTION Economies of scale are cost advantages reaped by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. Costs can be both fixed and variable. The size of the business generally matters when it comes to economies of scale. The larger the business, the more the cost savings. Economies of scale can be both internal and external. Internal economies of scale are based on management decisions, while external ones have to do with outside factors. (https://www.investopedia.com/terms/e/economiesofscale.asp) Time allotment/ duration: 15 hours Core-Related values and Biblical Reflection: Excellence: Competence Matthew 7:7: Ask, and it will be given to you; seek and you will find; knock, and it be opened to you (ESV) LEARNING CONTENT A. B. C. D. Marginal cost (Law of diminishing marginal returns) Economies of scale Economies of scope Diseconomies of scope Read summaryofpoints.pdf https://sites.google.com/site/economicsbasics/economies-of-scale Watch Videos for the following topics: Law of diminishing marginal returns https://www.youtube.com/watch?v=xLSRMtwWAM Economies of scale https://www.youtube.com/watch?v=JY21EiHeWQs https://www.khanacademy.org/economics-finance-domain/microeconomics/firm-economicprofit/long-run-production-costs/v/economies-and-diseconomies-of-scale LEARNING EVALUATION CABE ECON002: Managerial Economics Summer 2020 Page 7 of 12 Teaching-Learning Activities TLA 1: CASE TLA 2: Online forum/ Recitation TLA 3: Individual Problem ASSESSMENTS AT1. Online Quiz on Chapter 6 through google forms ASSIGNMENTS Individual assignment. 1. What is equilibrium? 2. What is the benefit of market making? RUBRICS FOR GRADING G. Reflections 0 Student is unable to elicit the ideas and concepts from the readings and video indicating that s/he has not read the prescribed reading or watched the video 1 Student is able to elicit the ideas and concepts from the readings and video but shows erroneous understanding of these 2 Student is able to elicit the ideas and concepts from the readings and video and shows correct understanding of these 3 Student not only elicits the correct ideas and concepts from the readings and video but also shows evidence of internalizing these points 4 Student elicits the correct ideas and concepts from the readings and video shows evidence of internalizing these, and consistently contributes additional thoughts to the Core idea H. Quizzes: Use the numeric scores I. Problem Set 0 Student did not make any attempt to solve any of the problems in the problem set or prove any of the statements in the quiz CABE 1 Student attempted to solve 50% of the problems in the problem set or displayed logical reasoning 50% of the time in attempting to prove the statement/s in the quiz 2 Student attempted to solve all the problems in the problem set or displayed logical reasoning 75% of the time in attempting to prove the statement/s in the quiz ECON002: Managerial Economics 3 Student is able to completely solve 50% of the problems in the problem set or completed 75% of the time in attempting to prove the statement/s in the quiz Summer 2020 4 Student is able to completely solve 75% of the problems in the problem set or completed all the proof/s in the quiz Page 8 of 12 REFERENCES Main Reference Book Froeb, L. (2019) Managerial Economics, Cengage Philippine Edition Online resources Khan Academy Tutorial.2020, June 8. Economies and diseconomies of scale. [Video file]. Retrieved from https://www.khanacademy.org/economics-finance- domain/microeconomics/firm-economic-profit/long-run-production-costs/v/economies-anddiseconomies-of-scale LukeFroeb.2011, August 11. Economies of scale. [Video file]. Retrieved from https://www.youtube.com/watch?v=JY21EiHeWQs Diminishing Returns and Production Function-Micro. Topic1. 2015, Nov. 12. [Video file]. Retrieved from https://www.youtube.com/watch?v=xLSRMt-wWAM TOPIC 7 Understanding Markets and Industry Changes LEARNING OBJECTIVES: At the end of the lesson, the student will be able to: a. Apply the concept of shift in demand, shift in supply and market equilibrium b. Explain industry changes using supply and demand c. Identify the benefits of market making INTRODUCTION A market is a set of buyers and sellers, commonly referred to as agents, who through their interaction, both real and potential, determine the price of a good, or a set of CABE ECON002: Managerial Economics Summer 2020 Page 9 of 12 goods. The concept of a market structure is therefore understood as those characteristics of a market that influence the behaviour and results of the firms working in that market. The main aspects that determine market structures are: the number of agents in the market, both sellers and buyers; their relative negotiation strength, in terms of ability to set prices; the degree of concentration among them; the degree of differentiation and uniqueness of products; and the ease, or not, of entering and exiting the market. (https://policonomics.com/lp-market-structures-market-structure/) Time allotment/ duration: 15 hours Core-Related values and Biblical Reflection: Excellence: Competence Matthew 7:7: Ask, and it will be given to you; seek and you will find; knock, and it be opened to you (ESV) LEARNING CONTENT 1. 2. 3. 4. 5. Shifts in demand Shifts in supply Market equilibrium Explaining industry changes using supply and demand Market making Online Discussion. Read google sites. Watch videos https://www.referenceforbusiness.com/encyclopedia/Man-Mix/Managerial-Economics.html https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/basic-economicsconcepts-macro/basic-economics-concepts-macro/market-equilibrium-disequilibrium-and-changesin-equilibrium/v/market-equilibrium?modal=1 LEARNING EVALUATION Teaching-Learning Activities TLA 1: CASE TLA 2: Online forum/ Recitation TLA 3: Individual Problem ASSESSMENTS AT1. Online Quiz through google forms CABE ECON002: Managerial Economics Summer 2020 Page 10 of 12 ASSIGNMENTS None RUBRICS FOR GRADING J. Reflections 0 Student is unable to elicit the ideas and concepts from the readings and video indicating that s/he has not read the prescribed reading or watched the video 1 Student is able to elicit the ideas and concepts from the readings and video but shows erroneous understanding of these 2 Student is able to elicit the ideas and concepts from the readings and video and shows correct understanding of these 3 Student not only elicits the correct ideas and concepts from the readings and video but also shows evidence of internalizing these points 4 Student elicits the correct ideas and concepts from the readings and video shows evidence of internalizing these, and consistently contributes additional thoughts to the Core idea K. Quizzes: Use the numeric scores L. Problem Set 0 Student did not make any attempt to solve any of the problems in the problem set or prove any of the statements in the quiz 1 Student attempted to solve 50% of the problems in the problem set or displayed logical reasoning 50% of the time in attempting to prove the statement/s in the quiz 2 Student attempted to solve all the problems in the problem set or displayed logical reasoning 75% of the time in attempting to prove the statement/s in the quiz 3 Student is able to completely solve 50% of the problems in the problem set or completed 75% of the time in attempting to prove the statement/s in the quiz 4 Student is able to completely solve 75% of the problems in the problem set or completed all the proof/s in the quiz REFERENCES Main Reference Book Froeb, L. (2019) Managerial Economics, Cengage Philippine Edition Online resources Khan Academy Tutorial.2020, June 8. Economies and diseconomies of scale. [Video file]. Retrieved from https://www.khanacademy.org/economics-finance-domain/ap- macroeconomics/basic-economics-concepts-macro/market-equilibrium-disequilibrium-andchanges-in-equilibrium/v/market-equilibrium?modal=1 CABE ECON002: Managerial Economics Summer 2020 Page 11 of 12 LukeFroeb.2011, May 3. Understanding Market and Industry Changes. [Video file]. Retrieved from https://www.youtube.com/watch?v=_u7yrtS3tGw CABE ECON002: Managerial Economics Summer 2020 Page 12 of 12
