Fogelman College of Business and Economics
Econ 7110
Executive MBA Managerial Economics
Fall 2003
Prof. Cyril F. Chang
Business Admin 312
Phone: 678-3565
[email protected]
Course Description
Managerial economics is an applied branch of economics. It welds together economic theory and tools
and techniques of management science in a decision-making format. The main purpose is to apply
economics to practical problem solving for business firms, nonprofit organizations, and public agencies.
Textbook and Readings
We will use two textbooks. Our main textbook is Managerial Economics, 9th Edition, by James
McGuigan, R. C. Moyer, and Frederick H. DEB. Harris (See useful textbook website at ). The second book, Executive
Economics by Shlomo Maital of MIT, is an economics book written for executives. It provides
supplemental readings to accompany the main textbook. There will also be journal articles and handouts
to supplement the two textbooks. The articles and handouts will be copied for you in advance.
Course Coverage and Expectations
This course is designed to cover four major topic areas in applied business economics: (1) Theory of
demand and empirical estimation of demand; (2) Business forecasting; (3) Production and cost analysis
as they relate to planning and decision making; and (4) Theory of pricing and pricing practices. We may
not have sufficient time to cover all four topics equally thoroughly, and it will be our joint decision in
prioritizing and finalizing the topics and coverage. We will have fun learning practical applications of
economic theory from both the assigned readings and from each other.
Grading System
There will be a midterm and a final exam. There will also be a number of case reports assigned as
homework or team projects.
Your semester grade will rest on the following: Test scores (50%), case reports and homework
assignments (40%), and class participation (10%).
Your semester letter grade will be based on a curve and we will use the plus-minus grading system.
Academic Conduct Policy
The University of Memphis policy regarding Classroom Misconduct will be enforced. Details of the
policies can be found in the Student Handbook or at the Office of Judicial and Ethical Programs web site,'
Review of Optimization Techniques
We will hold a voluntary review session on Wed., August 27, 6-8pm in Room 381. The assignment is
McGuigan, Moyer, and Harris, Web Chapter A – Optimization Techniques (Downloadable at: ).
We’ll review differential calculus and its applications to optimization problems. Most of you took a generic
version of college calculus a while back. We’ll review the relevant basic concepts and emphasize their
applications to business decision making priori to the beginning of the fall semester.
Managerial Economics
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Course Outline
Week 1: Friday, August 29
McGuigan, Moyer, and Harris
Ch. 1 - Goals of the Firm
Ch. 2 - Fundamental Economic Concepts
Maital, Ch. 1 - Cost, Value, and Price: Three Pillars of Profit
Project 1: Economic Optimization Problem Set (Individual work and due Sept. 5, 2003)
Week 2: Friday, September 5
Presentations: Group 1: Maital, Ch. 10 - Competing by Cooperating
Group 2: Maital, Ch. 8 - Markets and Demand
McGuigan, Moyer, and Harris, Ch. 3 – Demand Analysis
Week 3: Saturday, September 13
Presentation: Group 3: Maital, Ch. 9 - Calculating Risks
McGuigan, Moyer, and Harris, Ch. 3 – Demand and the Concept of Elasticity
Project 2 - elasticity problems assigned (individual work and due Sept. 27)
Week 4: Friday, September 19
McGuigan, Moyer, and Harris, Ch. 4 - Demand Estimation
Project 3 (Group Work) assigned: Empirical Estimation of Demand (Due Oct. 3)
Week 5: Saturday, September 27
McGuigan, Moyer, and Harris, Ch. 5 - Business Forecasting
Week 6: Friday, October 3
Presentations: Group 4: Project 3 (Demand Estimation)
Week 7: Saturday, October 11 - Review for Midterm
Project 4 - Forecasting Project assigned (Due Oct. 31)
Week 8: Friday, October 17 - Midterm Exam
Week 9: Saturday, October 25
Guest Lecture by Dr. Gene Huang, Chief Economist, FedEx
Presentation of Forecasting Projects: Groups 1 – 4
Week 10: Friday, October 31
McGuigan, Moyer, and Harris, Ch. 7 – Production Economics
Week 11: Saturday, November 8
McGuigan, Moyer, and Harris, Ch. 8 and Ch. 9 - Cost Analysis and Applications
Maital, Chs. 2-7
Week 12: Friday, November 14
McGuigan, Moyer, and Harris, Chs. 10-13
Ch. 16 – Pricing Techniques and Analysis
Week 13: Saturday, November 22
Appendix 16A – Revenue Management (if time permits)
Final Exam: Friday, Dec. 5 or Sat., Dec. 5, 2003
Managerial Economics
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