Managerial Economics BUAD 210 Summer 2003 Dr. Scott Niederjohn “The master economist... must be a mathematician, historian, statesman, philosopher... He must understand symbols and speak in words... He must study the present in the light of the past for the purposes of the future” (John Maynard Keynes)

BUAD 210: Managerial Economics Instructor Dr. Scott Niederjohn (cell phone) (home phone) Office Hours: By appointment Web Page: work/ - niederjohn folder work/

BUAD 210 Outline Course Introduction Discussion of Course Requirements Introductions Math Review and Economic Optimization (Chapter 2) Supply and Demand (Chapter 3) Detailed Project Description Group Formation and Meeting

What is Economics? Study of how economic agents choose to use their scarce resources. Scarcity Necessitates Choice Who are economic agents? We develop theories and models to explain their behavior. Thus, economics is the study of Human Behavior!

What is Managerial Economics? Application of economic theory and analytical tools to help managers make better decisions. Goal of this course is to show how these tools can be used. Draws primarily on applied microeconomics.

Approach to this class Review economic theory Add mathematical models to basic economic theory Apply empirical/statistical models to understand and predict firm demand Interpret and communicate results Goal is to apply economic theory and tools to business analysis

Managerial Economics and Other Fields of Study Economic Theory - Managerial Economics makes use of microeconomic theory in demand analysis. Statistics - Managerial Economics makes use of statistics in the estimation and empirical analysis of stochastic relations and forecasting. Business Administration - Managerial Economics provides the tools needed to solve important managerial problems across all functional areas of a firm.

Textbooks and Software: Managerial Economics, Mark Hirschey, Version 10E (2003) EViews statistical software (QMS Software) Student version available for purchase in the MU bookstore. Feel free to share this software in group.

Components of Course Grade  Noncumulative Exams (40%) Exam #1 (May 24th) (20%) Exam #2 (June 14th) (20%)  Homework (20%)  Term Project (40%) [more on this later] Formation of 4 person teams (5/10) Project Proposal (Due 5/17) Demand model estimation (Due 6/7) Final Submission (Due 6/21) Presentation (6/21)

Determination of Final Grade Take weighted sum of individual grades Use following conversion table: A: % AB: % B: % BC: % C: % D: % F: 0%-59.99%

Course Outline Math Review and Economic Optimization (5/10) Demand and Supply (5/10) Demand Analysis (5/17) Demand Estimation (5/17) Eviews and Demand Estimation (5/17) Forecasting (5/24)

Course Outline Continued Eviews and Forecasting (5/24) Perfect Competition and Monopoly (6/7) Monopolistic Competition and Oligopoly (6/7) Government Regulations and Market Economies (6/14)