session1to3 - Sanjay K Singh Course Outline and Session Plan Session(s Managerial Economics Dr Sanjay K Singh Indian Institute of Management Lucknow

session1to3 - Sanjay K Singh Course Outline and Session...

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Sanjay K. Singh Economics I 1 Managerial Economics - Dr. Sanjay K. Singh Indian Institute of Management Lucknow . Course Outline and Session Plan Session(s) Topics to be covered Readings and Book Chapter(s) 1 Managerial economics: an introduction PL: chapter 1 PRM: chapter 1 2-3 Demand, supply, price and elasticity PRM: chapter 2 4-5 Theory of consumer behavior PRM: chapters 3 & 4 6-7 Demand analysis PL: chapters 4 & 5 8-10 Theory of production and cost PRM: chapters 5 & 6 11-12 Market structures and price output determination – perfect competition and monopoly PRM: chapters 7 &9 PL: chapter 12 13-15 Market structures (contd.) monopolistic competition and Oligopoly PRM: chapters 11 & 12 16 Pricing of factors of production with particular reference to the labour market PRM: chapter 13 17 Economics of information asymmetry PRM: chapter 17 18 Competition policy and economic regulation From website 19-20 Project presentation and summing up - . Readings ° Textbooks: ± Microeconomics by Robert S. Pindyck, Daniel L. Rubinfeld, Prem L. Mehta, Pearson, Eighth Edition. ± Managerial Economics by H. C. Petersen, W.C. Lewis, and S.K. Jain, Pearson, Fifth Edition ° Reference Book: ± Microeconomics: Theory and Applications by D. Salvatore, Oxford University Press, Fourth edition. ° Polycopy containing few useful articles: . Evaluation (PGP) The course will be graded on the following components: Attendance, Class Participation, Assignments, and Quizzes: 25% Group Project: 15% Mid-term Examination: 25% End-term Examination: 35%
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Sanjay K. Singh Economics I 2 . Managerial Economics: An Introduction . Economics is the study of the allocation of scarce resources. . . . means that society has limited resources and therefore cannot produce all the goods and services people wish to have. Scarcity . . . . Economists study. . . ² How people make decisions? ² How people interact with each other? ² The forces and trends that affect the economy as a whole. . Ten Principles of Economics 1. People face tradeoffs. ³ Having more of one good means having less of another ³ Society faces tradeoffs in efficiency versus equity ³ You face tradeoffs in how best to allocate your time; the choice to attend B-School rather than being in labor force 2. People face opportunity cost (cost of something is what you give up to get it). ± What is the opportunity cost of your IIM education? ± What is the opportunity cost of attending this lecture? Undertake an activity if the benefit its opportunity cost How People Make Decisions?
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Sanjay K. Singh Economics I 3 . Ten Principles of Economics 3. Rational people think at the margin ( The Marginal Principle ) i.e., the relevant benefits and costs to consider are marginal . ± Marginal cost is the additional cost of one unit increase in an activity ( MC ) ± Marginal benefit is the extra benefit resulting from one unit increase in an activity ( MB ) ± If the marginal benefit of an activity exceeds its marginal cost, do it ± If the marginal benefit of an activity is less than its marginal cost, don’t do it ± Keep doing the activity until the marginal benefit just
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