1. Introduction to Managerial Economics Economic concepts Economic tools Economic methodology

2. Using Economics in Managerial Decision Making What is economics? Economic rhetoric

3. The Economic Problem Questions Issues Managerial decisions

4. Decision Making Problems Product price and output Make or buy Production technique Inventory levels Foreign exchange

5. Economic Concepts Theory of consumer behavior Theory of the firm –Production and cost Theory of market structure –Competition, monopoly, oligopoly Terminology

6. Objectives of the Firm Profit maximization Cash flow Alternative objectives –Shareholder value

7. Defining Value Role of valuation Determinants of value Creating and capturing value

8. Nature of Profits Definition Sources Role –Incentives –Signal

9. Theories of Profit Risk-taking Frictional Monopoly rents Innovation Managerial efficiency

10. Principal-Agent Problem Conflicting motivations among groups Solutions

11. Goals in the Not-for-Profit Sector Maximize quantity s.t. breakeven constraint Maximize utility of stakeholders Maximize cash flows

12. Tools of Analysis Mathematics Statistical estimation Forecasting Linear programming Optimization

13. Methodology of Microeconomics Model building Scientific method –Framework –Theory –Hypothesis –Empirical test Neoclassical framework

14. Social Responsibility of Business Invisible hand Market imperfections Exploitation Government response