Instructor: Chris Susanto
Phone:
573-338-0977
Email:
psusanto@centralmethodist.edu
susantocp@gmail.com
Spring 2012 (16 Weeks)
Thursdays 4:00 to 6:45 p.m.
January 17 – May 11, 2011
SusantoCMU.yolasite.com
SYLLABUS
Economics 314: Managerial Economics
Section 2: Thursdays at 4 p.m.
MISSION AND CREED
CENTRAL METHODIST UNIVERSITY prepares students to make a difference in the world by emphasizing academic and
professional excellence, ethical leadership, and social responsibility.
The CENTRAL METHODIST UNIVERSITY community believes in:
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Seeking knowledge, truth, and wisdom;
Valuing freedom, honesty, civility, and diversity;
Living lives of service and leadership; and
Taking responsibility for ourselves and the communities in which we live.
COURSE OBJECTIVES
Upon the completion of this course the student should be able to:
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Explain in broad terms how economics can help managers to be effective decision-makers.
Understand cost-effective incentive systems for efficient allocation of scarce resources.
Use demand and supply analysis to predict the effects of changing conditions on market equilibrium and to
evaluate the market effects of changes in public policy.
Understand the importance of cost-benefit analysis and how the timing and riskiness of different choices
affect their present value.
Understand the challenges that the “principal-agent” problem raises for managers in firms and organizations.
Have an understanding of the circumstances in which markets perform well and the conditions that may lead
to market failures, and their implications.
Analyze the effects (both good and bad) of government attempts to correct for market failures.
Apply demand theory, including the concept of elasticity, to managerial decision-making.
Appreciate how a firm’s debt/equity structure may influence managerial incentives.
Explain how market structure influences firm behavior.
Explain the implications of different employee pay systems.
Understand the implications of the application of economic theory to the political process.
Understand the importance of observing and understanding current events.
PREREQUISITES
EC 201 (Macroeconomics) and EC 202 (Microeconomics).
TEXTS
Required:
McKenzie, R., & Lee, D. (2006) Microeconomics for MBAs. Cambridge University Press.
ISBN: 0521859816. [Companion website: http://www.cambridge.org/features/mckenzie].
Recommended: + Ariely, D. (2008). Predictably irrational: The hidden forces that shape our decisions. Harper Collins.
ISBN: 978-0061353239. [Companion Website: http://danariely.com/].
+ Ariely, D. (2010). The upside of irrationality: The unexpected benefits of defying logic at work and
at home. Harper Collins. ISBN: 978-0061995033. [Companion Website: http://danariely.com/].
+ Electronic copies of all three books will be made available on the instructor’s webpage.
Additional materials may be handed out in class or posted on the course’s webpage:
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susantoCMU.yolasite.com
ASSESSMENT AND GRADING
Grading. Grades will be determined by the student’s scores on the following assessments:
Proportion
Points Possible
My Score
Exam 1 (Midterm)
30%
150
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Exam 2 (Final)
30%
150
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McKenzie Chapter Reviews (2 x 30)
12%
60
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Ariely Chapter Reviews (4 x 15)
12%
60
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Quizzes and Activities
6%
30
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Attendance & Participation
10%
50
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Total
100%
500
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A
90 – 100%
450 – 500
B
80 – 89%
400 – 449
C
70 – 79%
350 – 399
D
60 – 69%
300 – 349
F
59% or less
299 or less
Scale.
Exams. There are two non-comprehensive exams, each of which is comprised of:
Multiple-choice (100 points): 50 questions worth 2 points each.
Essay (50 points): a combination of quantitative and critical thinking essays.
Study guides will be made available prior to the exams. You need to bring a calculator to the exams.
Make-up Exams. Arrangements for make-up exams must be made in advance and should be taken before it is
administered to the rest of the class. Exceptions may be made in case of unforeseen emergencies, but please note
that failure to adequately study are not emergencies. In such event, a make-up exam must be taken prior the next
class meeting after, at the instructor’s discretion. The last exam must be completed by May 11, 2012.
McKenzie Chapter Reviews. You will review two chapters from the McKenzie textbook. Each chapter review will
consist of two parts: informal class discussion and a short (one-page) summary. Sign ups for the different dates and
the corresponding chapters will be made available. On your assigned date, you will summarize the main ideas of the
assigned chapter and discuss the relevance of the concepts presented in the chapter. You are required to turn in the
written summary prior to class time, so handouts can be made and distributed. Follow the APA citation guidelines;
use standard 1-inch margins and standard 10 to 12 size font. Each chapter review is worth 30 points.
Ariely Chapter Reviews. You will review four chapters from the either or both Ariely books. You will sign up for the
different dates and the corresponding chapters. On your assigned date, you will reflect upon the main ideas and
discuss the relevance of the concepts presented in the chapter. In addition, you are required to turn in a short (one to
two-page paragraphs), informal reflection. Each chapter review is worth 15 points.
Late Assignments. Assignments are due in class on the specified date. Due dates are firm unless I make changes,
which I will announce to the entire class. In the event of justifiable emergency situations, I will accept late
assignments with penalty as a courtesy to those who turn their materials on time.
Quizzes and Assignments. There will be various in-class quizzes and assignments throughout the semester. Quizzes
are worth 30 points total, though more points may be awarded. If by the end of the semester you accumulate more
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than 30 points, your points beyond that will be considered as extra credit. There are no make-up quizzes.
WRITING ASSIGNMENTS
The writing assignments in this course are not formal term papers, but I would like you to follow APA guidelines. Go
beyond just summarizing the subject; reflect, respond, and relate your reading to this course, your major, your
chosen/potential career, or your life in general. Make sure to put both your name and the assignment number on
your paper and as the filename (e.g., “LizLemonHW1.docx”). Also, if you are submitting anything via email, please
indicate your class name or code on your subject line of the correspondence (e.g., “EC201 Homework 1”).
ATTENDANCE
You are expected to attend class for the entire class period. Attendance will be taken for each meeting. If you come
in late, please ask me to correct the roll. Students who are habitually skip class or show up extremely late may be
penalized on their attendance points. You are responsible to request class materials and information that you miss.
You are expected to participate in class discussions. I will take your active participation into consideration. If more
than four class periods are missed, the instructor has the right to withdraw the student from the class.
ACADEMIC HONESTY
Central Methodist University’s mission is to “prepare students to make a difference in the world by emphasizing
academic and professional excellence, ethical leadership, and social responsibility.” While enrolled in this course, all
students will honor and uphold the University’s Mission, Values, and Creed. All cases will be reported to the Extended
Studies Coordinator and the Academic Dean. Further, all University and departmental policies regarding academic
honesty will be enforced. Central Methodist University believes that honesty throughout life is a significant
foundation of character and personal integrity. Any work that a student submits for a grade will be his/her own work
and will give credit to someone else’s work, thoughts, and statements by explicitly citing them. All assignments are
subject to the plagiarism-detection screening service of turnitin.com.
GENERAL POLICIES
Complaints/Concerns: If you have complaints or concerns about me or about this class, please follow accepted
protocol in seeking solutions and redress: discuss your concerns first and foremost with me. Then, if you feel I have
inadequately addressed your concerns, please contact the Extended Studies Coordinator.
Americans with Disabilities Act: Students with documentable disabilities as addressed by the Americans with
Disabilities Act may register with the Coordinator, upon which appropriate accommodations will be made. If you have
emergency medical information to share with me or if you need special, please inform me immediately. Please see
me privately after class, or send an email.
Use of Electronic and Communication Devices: Computing devices may be used during class to take notes, to follow
PowerPoint slides, and activities that contribute to classroom learning. [Tweeting, updating your Facebook profile, or
checking your Fantasy Football League does not contribute to classroom learning.] To maintain a positive learning
environment with a minimum number of distractions, turn off your communication devices during class. If you are
waiting for an emergency call, inform me ahead of time and excuse yourself when you receive such call. I have the
discretion to discourage or even prohibit the use of these devices if I find such usage to be disruptive.
Inclement Weather Policy: Refer to Central Methodist University’s inclement weather policy. If you have any
questions regarding cancellation, please email/call me or CMU Columbia at (573) 447-3311. In the event of class
cancellation, I will contact you via email and will provide an alternate (web-based) assignment in lieu of in-class
meeting. Anything assignments due on such date can be turned in electronically.
Grading Policy: Attendance and overall class performance will be taken into account in assigning final grades for
"borderline" students, at the instructor’s discretion.
Changes and Addendum: This syllabus is subject to change at the instructor's discretion. I will inform any changes in
class and will make such announcement on the course’s website.
Late assignments: Late assignments will be penalized, as a courtesy to other students who turn their assignments on
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time. At the end of this semester, all materials will be turned in for final grading by Sunday, May 13 at noon.
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TOPICAL OUTLINE/TENTATIVE SCHEDULE
Date Reading Assignment/Topic
1/19
1/26
2/2
2/9
2/16
2/23
3/1
3/8
3/15
3/22
3/29
4/5
4/12
4/19
4/26
5/3
5/10
UNIT 1
Introductions & Syllabus
LEC: Microeconomics: a way of thinking about business
CR: Managing through incentives
LEC: Principles of rational behavior
CR: The logic of group behavior
PI: The Truth about Relativity
LEC: Competitive product markets and firm decisions
CR: How honesty pays in business
PI: The Fallacy of Supply and Demand
LEC: Government controls
PI: The Cost of Zero Cost
PI: The Cost of Social Norms
PI: The Problem of Procrastination and Self-Control
LEC: Consumer choice and demand
Assignment: Lagged demand and Network effects
PI: The High Price of Ownership
PI: Keeping Doors Open
PI: The Effect of Expectations
LEC: Consumer choice (cont’d + Biases handout)
Exam 1 (Midterm)
PI: The Power of Price
PI: Beer and Free Lunches
LEC: Production costs and the theory of the firm
UNIT 2
CR: Reasons for firms and incentives
UI: Paying more for less
LEC: Production costs and the theory of the firm (cont’d)
UI: The Meaning of Labor
UI: The IKEA effect
LEC: Production costs in the short run and long run
No Class – Spring Break
CR: Firms’ debt/equity structures
UI: The-not-invented-here bias
LEC: Firm production under competitive conditions
CR: Team Production, Value of Teams
UI: The case for revenge
LEC: Monopoly power and firm pricing decisions
CR: Creative pricing, price discrimination, cartels
UI: On adaptation
LEC: Firm strategy/imperfectly competitive markets
CR: Hostile Takeovers
UI: When a market fails
LEC: Competitive and monopolistic labor markets
CR: Paying for performance
UI: On empathy and emotion
Exam 2 (Final) – Unit 2 Only (non-comprehensive)
McKenzie
1st ed.
McKenzie
2nd ed.
Ch 1 pt I
Ch 1 pt II
Ch 3 pt I
Ch 2 pt B
Ch 1 pt A
Ch 1 pt B
Ch 2 pt A
Predictably
Irrational
Upside of
Irrationality
Ch 4 pt I
Ch 1
Ch 3 pt A
Ch 4 pt B
Ch 2 pt I
Ch 5 pt II
Ch 4 pt A
Ch 5 pt I
Ch 2
Ch 3
Ch 4
Ch 6
Ch 7 pt I
Ch 7 pt I
Ch 6 pt A
Ch 6 pt B
Ch 7
Ch 8
Ch 9
Ch 7 pt I
Ch 6 pt A+B
Ch 10
Ch 11
Ch 8 part I
Ch 7 pt A
Ch 6 pt I
Ch 7 pt B
Ch 8 part I
Ch 7 pt A
Ch 1
Ch 2
Ch 3
Ch 9 pt I
Ch 8 pt A
Ch 9 pt II
Ch 8 pt B
Ch 10 pt I
Ch 10 pt II
Ch 9 pt A
Ch 9 pt B
Ch 11 pt I
Ch 11 pt II
Ch 10 pt A
Ch 10 pt B
Ch 4
Ch 5
Ch 6
Ch 12 pt I
Ch 12 pt II
Ch 11 pt A
Ch 11 pt B
Ch 13 pt I
Ch 13 pt II
Ch 12 pt A
Ch 12 pt B
Ch 8
Ch 9
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