Eco320: Managerial Economics
Spring 2008
Professor Tae-Hee Jo
Class and
Office Hour
12:00 - 12:50 PM, MWF at BULG N002B.
MWF 10:00 - 11:30 and by appointment.
Contact
Information
Classroom Bd. B230
Economics & Finance Department
Buffalo State College
Prerequisite
Eco202: Principle of Microeconomics
Course
Objective
This course is designed to provide in-depth understanding of the business enterprise
and its activities with an emphasis on the business decision making process, the
organizational structure of the business enterprise and the market, and the macroeconomic outcomes of business activities. Both conventional approaches (so called,
‘neoclassical microeconomics’) and alternative approaches (or ‘heterodox microeconomics’) will be presented.
Required
Textbook
James A. Brickley, Clifford W. Smith, Jr., and Jerold L. Zimmerman (2007), Managerial Economics and Organizational Architecture, 4th edition, McGraw-Hill Irwin.
ISBN: 978-0-07-352-301-9.
Supplemental
Textbooks
Phone: (716) 878-6933
E-mail: joth@buffalostate.edu
Web: http://angel.buffalostate.edu
• Robert Heilbroner and Lester Thurow (1998), Economics Explained, New York:
Touchstone. ISBN: 978-0-684-84641-5: (BSC Library Reserve)
• D. Fireside, C, Tilly and Dollars & Sense eds. (2006) Real World Micro, Boston:
Dollars and Sense, 13th edition.
• D. Fireside, C, Tilly and Dollars & Sense eds. (2006) Real World Macro, Boston:
Dollars and Sense, 23rd edition.
• Thorstein Veblen (1904), The Theory of Business Enterprise, New York: Charles
Scribner’s Sons. Free on-line book:
http://de.geocities.com/veblenite/txt/tbe.txt or
http://cas.umkc.edu/econ/Institutional/Readings/Veblen/TBE/tbe.htm
• John K. Galbraith (1967), The New Industrial State, Boston: Houghton Mifflin:
(BSC Library Reserve)
• Alfred S. Eichner (1976), The Megacorp and Oligopoly, Cambridge: Cambridge
University Press: (BSC Library Reserve)
Grading Policy This course will be graded on the college’s approved A-E letter grading scale (e.g. A,
A-, B+, · · ·, E). Students will be assessed according to the following 4 assignments
listed below. (Regularly visit the ANGEL class page for course announcements and
materials).
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• Class Attendance 10%. Randomly taken. Attendance at 90% of lectures is
compulsory.
• Homework assignments 20%. Problem solving or writing a short essay. Late
homework is accepted with reduced grades. But no later than two days after the
deadline.
• Mid-term exam. 30%. March 7 (Friday). In class.
• Final exam 40%. May 7 (Wednesday). 9:40 - 11:30 AM. In class. No make up
exam (for both mid-term and final) unless an acceptable reason is provided in
advance (at least a week earlier to the exam).
Grading System
Grade
A
AB+
B
BC+
Percent Score
93-100
90-92
87-89
83-86
80-82
77-79
Grade
C
CD+
D
E
Percent Score
73-76
70-72
67-69
60-66
0-59
Academic
Dishonesty
Policy
Students who engage in plagiarism, cheating on examinations, multiple submission of
the same work, unauthorized collaboration, falsification and/or any other violation
of academic integrity will receive an “E” grade in the course. Read carefully the
official policy on academic misconduct at
http://www.buffalostate.edu/academicaffairs/x607.xml
Students with
Disabilities
“Any student who requires accommodations to complete the requirements and expectations of this course because of a disability is invited to make his or her needs
known to the instructor and to the director of the Disabilities Services Office, 120
South Wing, 878-4500.”
Course Schedule and Readings
Week 1
Jan. 23, 25: Economy, Economics, and Managerial Economics : Ch. 1
Readings:
• Heilbroner and Thurow. Economics Explained, Ch.1 (ANGEL)
• Thorstein Veblen (1898), “Why economics is not an evolutionary science”, Quarterly Journal of Economics 12(4), 379-397. (JSTOR: www.jstor.org)
• Ellen Frank. “The Ideology of the Free Market”, in Real World Micro, Ch.1.3
(ANGEL)
• Sashi Sivramkrisha (2003), “Towards a Post-Autistic Managerial Economics”,
Post-Autistic Economics Review, No. 20.
(http://www.paecon.net/PAEReview/issue20/Sivramkrishna20.htm)
Week 2
Jan. 28, 30, Feb. 1: Behavior and Decision: Ch. 2
Readings:
2
• Gary Becker (1993), “Nobel Lecture: The Economic Way of Looking at Behavior”, Journal of Political Economy 101, 385-409. (JSTOR)
• Alan Durning. “Enough is Enough” in Real World Micro, Ch.3.3 (ANGEL)
• Thorstein Veblen (1909), The limitations of marginal utility, Journal of Political
Economy 17(9), 620-636. (JSTOR)
• Alfred Eichner (1976), The Megacorp and Oligopoly, Ch.1 (ANGEL)
Week 3
Feb. 4, 6, 8: The Firm, Market, and Industry: Ch. 3
Homework assignment #1 (Feb.4. Due on Feb. 11)
Readings:
• Real World Micro, Ch.4 (ANGEL)
• Economics Explained, Chs.12, 14 (ANGEL)
• Thorstein Veblen (1904), The Theory of Business Enterprise, Ch. 3 (web)
• John K. Galbraith (1967), The New Industrial State, Ch.7 (Res)
Week 4
Feb. 11, 13, 15: Demand and Consumption: Ch. 4
Readings:
• Veblen, T. (1898) The Theory of Leisure Class, Ch.4. “Conspicuous Consumption”. (web: http://cas.umkc.edu/econ/Institutional/Readings/Veblen/TLC/tlcchap04.html)
• Galbraith, J. K. (1967). The New Industrial State, Ch. 18. (Res)
Week 5
Feb. 20, 22 (Feb. 18: No class): Production and Costs: Ch. 5
Homework assignment #2 (Feb. 20. Due on Feb. 27)
Readings:
• Real World Micro, Ch.4 (ANGEL)
• Alfred Eichner (1976), The Megacorp and Oligopoly, Ch.2 (ANGEL)
• B. Gold (1981), “Changing Perspectives on Size, Scale, and Returns”, Journal of
Economic Literature 19 (March), 5 - 33. (ANGEL)
Week 6
Feb. 25, 27, 29: Market Structure: Ch. 6
Readings:
• Real World Micro, Ch.5 (ANGEL)
• Alfred Eichner (1976), The Megacorp and Oligopoly, Ch.2 (ANGEL)
• G.J. Stigler (1968), The Organization of Industry, Ch.9: “The Dominant Firm
and the Inverted Umbrella”. (ANGEL)
Week 7
Mar. 3, 5, 7
Review (3, 5) and Mid-term Exam (7)
Week 8
Mar. 10, 12, 14: Pricing, Investment, and Financing: Ch. 7
Readings:
• R.L. Hall and C.J. Hitch (1939), “Price Theory and Business Behaviour”, Oxford
Economic Papers 20, 12-45. (ANGEL)
• Tae-Hee Jo (2007), “Microfoundations of the Business Enterprise.” (ANGEL)
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Week 9
Mar. 17, 19, 21: Business Strategy: Ch. 8
Readings:
• K. Cowling and R. Sugden (1998), “The essence of the modern corporation:
markets, strategic decision-making and the theory of the firm”, The Manchester
School 66(1), 59-86. [ANGEL]
• Nina Shapiro (1991), “Firms, markets, and innovation”, Journal of Post Keynesian Economics 14(1), 49-60. (ANGEL)
Week 10
Spring Recess. No class.
Week 11
Mar. 31, April 2, 4: Corporate Governance: Ch. 18
Homework assignment #3 (April 2. Due on April 9)
Readings:
• Real World Micro, Ch.7 (ANGEL)
• M. Howe (1972-73), “A Study of Trade Association Price Fixing”, Journal of
Industrial Economics 21, 236-256. (ANGEL)
• J.K. Galbriath (1967), The New Industrial State, Ch.3 “The Nature of Industrial
Planning”. (Res)
Week 12
Apr. 7, 9, 11
Integration, Outsourcing, and Multi-national Corporations: Ch. 19
Readings:
• Dara O’Rourke, “Sweatshops 101”, in Real World Macro. (ANGEL)
• Scott Moss (1981), An Economic Theory of Business Strategy, Ch.7 “Uncertainty,
Exchange and Integration”, (ANGEL)
• W. Milberg (2006), “Pricing and Profits Under Globalized Competition: A Post
Keynesian Perspective on U.S. Economic Hegemony”, SCEPA Working Paper
2006-5. (ANGEL)
Week 13
Apr. 14, 16, 18: Regulation and Control: Ch. 21
Homework assignment #4 (Apr. 14. Due on Apr. 21)
Readings:
• Real World Micro, Ch.7 (ANGEL)
• Alfred Eichner (1976), The Megacorp and Oligopoly, Ch.8, “Toward social control”. (ANGEL)
Week 14
Apr. 21, 23, 25: Business Enterprises and Business Cycles:
Readings:
• Thorstein Veblen (1904), The Theory of Business Enterprise, Ch. 7 (web)
• Hyman Minsky (1992), “The Financial Instability Hypothesis”, Working paper
#72, The Jerome Levy Economics Institute of Bard College. (ANGEL)
Week 15
Apr. 28, 30: Review of weeks 8-14
May 2: Study day (no class).
Week 16
May 7 (Wed), 9:40-11:30 AM: Final Exam.
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