ECO 610: Managerial Economics
December 2013 Course for UK/TEI Piraeus Program
Professor:
Email:
Date:
Harvie Wilkinson
harviewilkinson@uky.edu
December 9 through 19; 6:00 pm to 10:00 pm
Course Description:
In this course we will apply economic theory to managerial decision making. We will
employ many of the traditional tools of microeconomics and see how they can be used to
analyze practical business problems. We will consider the basic tools of economic theory
used to study markets, consumer behavior and the behavior of firms. We will also study
what happens when markets fail and the role of government in market activity. The
economic tools acquired in this course can be applied by managers in the business sector
and policy makers. We will pay particular attention to the horizontal and vertical
dimensions of the firm and to market structure and the strategy of firms in the
marketplace. ECO 610 is a core course in the MBA program and is intended to
complement the other core courses.
Textbook
You will receive a number of detailed and extensive Power Point slides from various
sources which will provide you with the fundamental economic principles necessary to
apply economic theory to managerial decision making.
“Chapter 10 – Industry Analysis,” Besanko, Dranove, Shanley and Schaefer, Economics
of Strategy (4th edition), John Wiley and Sons, Inc., 2007. This will be provided to you.
There will also be assigned readings for each class taken from business periodicals such
as the Wall Street Journal, Harvard Business Review, Bloomberg Businessweek,
nytimes.com, cnn.com, and others.
Grading
Your grade in the course will be based on your performance on (1) in-class quizzes, (2) a
research memorandum, and (3) an in-class final exam. We will have a short quiz based
on the assigned outside readings toward the end of each evening’s class. There will be
eight quizzes in all. I will ask you to write a 8-10 page (12 point font, double-spaced)
memorandum, in which you analyze a particular industry of your choosing using the
“five-forces” approach as outlined in Chapter 10, Industry Analysis of the text,
Economics of Strategy. This memorandum must be e-mailed to me by Monday, January
13, 2014. Finally, we will have a comprehensive final exam, for which you will be able
to use the Power Point slides, articles and notes. The quizzes will count 25%, the
research memorandum will count 30%, class presentations will count 15%, and the final
exam will count 30% towards the determination of your letter grade in the course.
Class Structure
Since this course is so compact and concentrated, we have to be very efficient in our use
of class time. Also, I recognize that many students will have already put in a full day at
work before coming to class. We will typically break each evening into two or three
sessions. In the first session, from 6:00 p.m. until 7:30, I will introduce the evening’s
topic and review the Power Point slides covering the topic. The second session will
typically last from 7:45 until 8:30. During this time we will either go over certain articles
or review Power Points on selected topics. After another fifteen-minute break, we will
finish off the evening with an hour-long discussion of selected articles which you will
present to the class. Each evening’s short quiz will typically come at the end of the
second session.
Course Schedule:
Monday, Dec. 9
The Language of Economics
Understanding Economics and How It Affects Business
Review Articles.
Tuesday, Dec. 10
Graph Review
Production Possibility Frontiers, Trade, and Growth
Doing Business in Global Markets
Review Articles.
Wednesday, Dec. 11 Private Property Rights and Economic Organization
Demanding Ethical and Socially Responsible Behavior
Review Articles.
Thursday, Dec. 12
The Market Economy – Supply and Demand
Supply and Demand - Applications and Extensions
Review Articles.
Friday, Dec. 13
Markets and the Role of Government
Michael Porter’s Five Forces
Monday, Dec. 16
Elasticity of Supply and Demand
Taxation and Government Intervention
Review articles and work on selection of research topic.
Tuesday, Dec. 17
Consumer Choice: The Theory Behind Demand
Theory of the Firm: Supply, Production, and Costs
Production and Operations Management
Review articles and work on selection of research topic.
Wednesday, Dec. 18 Price Takers and Competition
Developing and Pricing Goods and Services
Distributing Products
Review article and work on selection of research topic.
Thursday, Dec. 19
Price Searchers and Monopoly
Monopolistic Competition, Oligopoly, and Strategic Pricing
Course review and work on outline of research topic.
Instructions for Industry Analysis Assignment
A major (30%) portion of your grade in this course will come from your analysis of a
particular industry of your choosing. Your assignment is to select an industry that you
have some interest in, and to research that industry so that you become something of an
expert. Sources that you might use for your research include library and internet
resources, as well as discussions with persons knowledgeable about the industry.
Your research should follow the outline of an industry study discussed in Chapter 10 of
Economics of Strategy by Besanko, Dranove, Shanley, and Schaefer. In other words, you
should do a five-forces analysis of your industry. The types of questions you should
consider in analyzing your industry are outlined in Appendix 10.1 of the chapter. Your
challenge is to figure out which questions are most relevant to your chosen industry and
hence deserving of your attention, and which ones are not particularly important.
You should convey your research findings in a business-style memorandum. Imagine
that you have been given the assignment to research a particular industry because a large
corporation (your client or employer) is thinking about investing in this industry. You
should write a eight to ten page memorandum (12 pt. font, double-spaced, one-inch
margins) addressed to the executive committee. Make sure that you appropriately cite all
of the outside references that you use, because the company will not want to make an
important decision based on unreliable sources or flimsy evidence and research.
It is very important that you attach as an appendix to your memorandum a copy of each
of the sources that you use. If you cite a book or long article, only include the title page
and the pages you refer to in your report. For short articles from periodicals, newspapers,
and internet sources, include the entire piece. If you interview a person knowledgeable
about the industry, explain who the person is and include a summary of your notes from
the interview. Then in writing your memo you can use very brief citations to your
sources, e.g. see Appendix, Reference A-1, A-2, etc.
This assignment is due Monday, January 13, 2014. That means that you should e-mail it
on or before that date to:
Harvie Wilkinson
harviewilkinson@uky.edu
Office phone: 859-257-1924
Returning Exams and Appeal Procedure
The graded final exam will be returned two weeks after the scheduled day of the exam.
This amount of time is necessary since the exams will include short answer and essay
questions in addition to multiple choice questions. Anyone feeling that a dispute exists
after the grading of an exam may submit a written grievance. This grievance should
identify the item in dispute and arguments supporting the student's position. The appeal
should be stapled to your exam and must be submitted within one week following the
return of the assignment. The instructor agrees to return a written response to the student's
grievance within two weeks after the exam or from receipt of the grievance.
Policy on Academic Accommodations Due to Disability
If you have a documented disability that requires academic accommodations, please see
me as soon as possible during scheduled office hours.
Cheating
Cheating is in no way tolerated at The University of Kentucky. Anyone caught cheating
will be penalized severely. The full penalty will be determined in consultation with the
Chairman of the Department of Economics. The minimum penalty is an "E" for the
course. I require two stipulations to reduce the potential for cheating.
Course Expectations
Being Prepared: Students are expected to read assigned material prior to class and
participate in class discussion and activities. Do not be afraid to participate because of the
size of the class and if you have a question, never let it go unanswered. If you do not get an
opportunity to ask your question during class, to talk to me either before or after class or
feel free to contact me via email. Being prepared also means going through the notes from
one class period before coming to the next class period.
Being in Class: I will not take attendance, however, consistent attendance is essential for
acceptable performance in the course. Many students find economic concepts difficult to
grasp. Missing class will only make the process of absorbing this material more difficult. I
will also present material in class that may not be found in the text. If you find yourself
falling behind or you are having problems with the material, I encourage you to come to me
for assistance.
Being Courteous:
 If you do plan to attend class, be on time and do not leave until class is dismissed.
Late arrivals and early departures are very disruptive to your fellow students and to
me!! If you have a long walk to get to this class from another, let me know in
advance. If you need to step out of the room for a bit, please leave and return to the
classroom as quietly as possible.
 Please avoid carrying on private conversations during class. This behavior shows
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disrespect for your classmates who would like to hear the lecture and it can have a
negative impact on the learning experience of the entire class.
Please turn off all cell phones. If you are unable to turn off these electronic devices,
please have them on mute or leave them at home. It is very disruptive to your peers
and to me to have a cell phone ring during class. It is also distracting if you text
message during class.
You may use laptops only for purposes of note-taking. If you are caught using your
laptop for any purpose other than note-taking you will no longer be permitted to use
your laptop in class.