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This course equips students with the basic economic tools for successful development of business strategies.
This course will help the students to understand the theories behind the economic concepts and illustrate them with suitable examples. There will also be an emphasis on how microeconomic policies can be used to influence the economic performance of a firm. This course aims to develop a critical approach to analyze various business issues. The analytical tools that the students are supposed to acquire through this course are expected to help them to understand and solve business problems better.
Students are required to stay up-to-date with the topics being discussed, and clear any doubt as soon as they arise. It is a student’s responsibility to duty the assigned readings in advance. Students should maintain IIM Kashipur honor code and code of conduct at all times. Students should keep their phones and electronic items in silent mode. Kindly be considerate and respectful to your classmates. If any student faces any problem or difficulty during the course, please discuss it with the instructor as early as possible.
As a requirement for this course, students need to write an original research paper (not more than 10 pages, double-spaced) using the techniques learned in the course. The focus of the research paper should be on identifying a real life business problem/event in the Indian context, and application of economic principles to solve/analyze it. Students will be divided into groups during the first week of class. Each of these groups will be responsible to take up a current business problem/event and apply at least one or multiple topics learned in the class to solve/analyze the issue. Each student group should get the research topic approved well in advance (by no later than one month since the first class).
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Email: abhradeep.maiti@iimkashipur.ac.in
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Group project will be due one week before the final exam . Late submissions will not be accepted.
Student groups will also present their papers on the very last day of the course.
Plagiarism is a serious offense in academic circles and other professional areas. If you are not sure what plagiarism is, please consult these guidelines:
• http://www.plagiarism.org/plagiarism-101/what-is-plagiarism
• http://people.ucalgary.ca/˜hexham/content/articles/plague-of-plagiarism.html
Please ensure that your research paper is free of plagiarism related issues. Among other things, you should always cite any source from which an idea has been taken, even when paraphrasing. Plagiarism will have serious consequences on a scholar’s academic and professional career, and should be avoided at all costs.
If a student is found cheating or a group is found plagiarizing, then the most severe action will be taken as per the institute’s guidelines.
The course will be graded as per the following scheme.
Grading Scheme
Quizzes
Group Project
Final
10%
40%
50%
The exam will be closed books and closed notes. No rescheduling request will be entertained. Late submission of the course project will not be accepted either.
Textbook:
Png, Ivan. 2013.
Managerial Economics (4th ed.; Indian Edition). Routledge.
There is no scheduled office hour. Students can send email to schedule an appointment. Students can also come to the office any time (between 10 am - 5 pm) if they have questions.
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This course consists of sixteen 90 minutes long sessions.
1. Introduction- Economics is everywhere!
2. Demand and Supply
3. Demand and Supply (contd.)
4. Demand and Supply (contd.)
5. Demand and Supply (contd.)
6. Production and Costs
7. Production and Costs (contd.)
8. Organization of the Firm
9. Perfect Competition
10. Monopoly
11. Monopolistic Competition
12. Oligopoly
13. Pricing
14. Asymmetric Information
15. Government and the Market
16. Class Presentations
1. Introduction- Economics is everywhere!
(a) Learning Objectives i. Learn to decipher the economics behind everyday events ii. Understand how all economic agents are influenced by the decisions of others iii. Understand the importance of incentives iv. Trade offs v. Scarcity vi. Opportunity Cost vii. Optimization viii. Marginal Analysis ix. Externalities
(b) Readings i. Png: Ch 1 ii. Case: The Airbus Beluga
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iii. News: Judge Orders California Sriracha Factory to Halt Odor-Making Operations iv. News: Former Tobacco Fields Now Grow Chickpeas To Serve America’s Growing Hummus
Addiction v. News: The Wu-Tang Clan and The World’s Most Exclusive Album
2. Demand and Supply
(a) Learning Objectives i. “Law of Demand” ii. Difference between change in demand and quantity demand iii. Elasticity iv. Elasticity and Revenue v. Law of Supply vi. Supply versus quantity supplied vii. Equilibrium and market price viii. Price ceiling and Price Floor ix. Demand Estimation
(b) Readings i. Png: Ch 2, 3, 4, 5 ii. Case: The Petroleum Market: 1970-2001 iii. Case: Resolving China’s Power Shortage, 2004 iv. Case: StarHub: English Premier League, 2008 v. Case: Delhi Noida Direct Flyway, 2006 vi. News: Amazon to Publishers: Set Your Own E-Book Prices! Amazon to Customers: Not
Our Fault!
vii. News: How to Get People to Pitch In viii. News: Want L.L. Bean Duck Boots Right Now? Head To eBay, Pay Double ix. News: Burger King Ending 15-Cent Nugget Deal as Supplies Wane x. News: Bah Humbug: Spirit Airlines Ups Baggage Fee $2 During Holiday Travel Season xi. News: Ebola themed toys selling like hot cakes, supplies finished xii. News: Bob Marley’s Ubiquitous Legend Finally Hits The Top 10 xiii. News: Almond Drought Boosting India Sweets to Australian Farms xiv. News: 8 Mind-Blowing Facts About Music Business In Japan xv. News: The Birth Of The Minimum Wage In America xvi. News: Stubble Is Cool Now. Pity The Razor Companies xvii. News: No Pecan Pie? Thank China, Rain and Pigs xviii. News: Cigarette tax hikes may lower drinking rates xix. News: Venezuela hopes to wipe out toilet paper shortage by importing 50m rolls xx. News: Comcast Doesn’t Want To Improve Its ‘Internet Essentials’ Program For Low-Income
Consumers xxi. News: Vodka prices: Putin calls for cap amid economic crisis
3. Demand and Supply (contd.)
4. Demand and Supply (contd.)
5. Demand and Supply (contd.)
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6. Production and Costs
(a) Learning Objectives i. Production Function ii. Marginal, Average, and Total Product iii. Returns to scale iv. Cost Function v. Marginal, Average, Total, Variable, and Fixed Costs vi. Sunk Costs vii. Short Run versus Long Run viii. Cost and Productivity
(b) Readings i. Png: Ch 7 ii. Case: Japan: HDTV, 2008 iii. Case: Gerbang Perdana, 2006 iv. Case: Eurotunnel v. Case: Pricing at Dell vi. Case: Airbus vs Boeing, 2006 vii. Case: Hanshin Electric Railway, 2007 viii. Case: Competition in the Wide-Body Aircraft Industry ix. News: Egg prices likely to rise amid laws mandating cage-free henhouses x. News: An Urban Farm Designed To Make One Thing: A Grilled Ham And Cheese Sandwich xi. News: Why gasoline is suddenly $3 a gallon — and could go lower
7. Production and Costs (contd.)
8. Organization of the Firm
(a) Learning Objectives i. Input Procurement ii. Transaction Costs iii. Principal-Agent Problem
(b) Readings i. Png: Ch 14 ii. Case: Jack Welch and General Electric iii. Case: Outsourcing at Ericsson iv. News: ATMs and a Rising Number of Bank Tellers?
9. Perfect Competition
(a) Learning Objectives i. Price Taker versus Price Maker ii. Profit maximization under perfect competition iii. Shut down iv. Supply curve of a firm and the industry v. Tax
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(b) Readings i. Png: Ch 5 ii. Case: VHS vs Betamax iii. News: Time Warner Boosts My Speed, Cuts My Bill: I Just Happen To Live Near Google
Fiber
10. Monopoly
(a) Learning Objectives i. Barriers to entry ii. Profit maximization under monopoly iii. Natural Monopoly iv. Social Welfare
(b) Readings i. Png: Ch 8 ii. Case: Entering the Aspartame Market iii. News: In Prisons, Sky-High Phone Rates and Money Transfer Fees iv. News: The Death of Google Reader Paves The Way For Real RSS Businesses v. News: Dollar Tree Crowned Victor In Battle For Family Dollar
11. Monopolistic Competition
(a) Learning Objectives i. Profit maximization under monopolistic competition ii. Short run versus long run iii. Positioning Strategy
(b) Readings i. Lecture Note ii. Case: Mixi vs Facebook, 2013 iii. News: Evil Ice Cream Truck Stalks Competition, Offers Customers Free Treats, Gets Arrested
12. Oligopoly
(a) Learning Objectives i. Profit maximization under oligopoly ii. Strategic interaction iii. Price versus output competition iv. Cartels
(b) Readings i. Png: Ch 11 ii. Case: Britannica vs Encarta iii. Case: De Beers and Beyond: The History of the International Diamond Cartel iv. Case: Airbus vs Boeing (B), 2006 v. News: The Envelope Cartel Has Finally, Finally Been Brought To Justice vi. News: OPEC: No cut in oil production and prices keep falling
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vii. News: How the Meat Industry Keeps Chicken Prices High
13. Pricing
(a) Learning Objectives i. Pricing strategies ii. Price discrimination iii. Price matching
(b) Readings i. Png: Ch 9 ii. Case: iii. Case: Christie’s and Sotheby’s iv. Case: Wednesdays at Cinemex v. News: Frequent Fliers, Prepare to Pay More vi. News: Target Still Doesn’t Understand Bulk Pricing, Or Maybe Charges For Boxes Now vii. News: Time To End The Senior Citizen Discount?
viii. News: Websites Vary Prices, Deals Based on Users’ Information
14. Asymmetric Information
(a) Learning Objectives i. Uncertainty ii. Moral hazard iii. Signaling iv. Adverse selection v. Auctions
(b) Readings i. Png: Ch 13 ii. Case: Auctioning IPOs at WR Hambrecht + Co iii. Case: Compensation and Governance at Worldcom iv. News: Amazon Prime members spend hundreds more than nonmembers
15. Government and the Market
(a) Learning Objectives i. Market Failure ii. Regulation
(b) Readings i. Png: Ch 15 ii. Case: The Ill-fated GE/Honeywell Merger iii. Case: Water, 2007 iv. Case: China’s Quiet Export: Children, 2004 v. News: Why Do We Eat Popcorn at the Movies?
vi. News: When your surgery goes wrong, hospitals profit
16. Class Presentations
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