I.T.S-MANAGEMENT & I.T.

INSTITUTE
MOHAN NAGAR, GHAZIABAD
Course: PGDM (2013-15)
Name of Faculty: Dr. Pankaj Kumar

Trimester: I
Subject: Managerial Economics

PART 1: Learning Objectives

The objective of this course is to familiarize the students with the concepts and applications of managerial
economic tools in context of business. Attention will be more on the key variables of managerial economics
and its uses in functional & social aspects of business such as marketing, finance, human resource,
operation, information system, public welfare and social responsibilities. After completion of this course the
student will be able to apply the concept in business decisions in different & complex situations. The course
can help managers in derivation of decision under risk and uncertainty conditions particularly for
investment, demand, pricing of product, cost and production and distribution of resources.
COURSE CONTENTS
Unit I : Introduction :
Basic principles of economics; micro, macro and managerial economics. Introduction of managerial
economic tools in functional area of business. Objectives of a firm, opportunity cost and economic profit.
Basics of Functions & Calculus. Reading of Graph and Tables.
Unit II : Consumer Behaviour Demand & Supply Analysis:
Law, Function, Determinants (factors), Types, Movement, Shift and Exception of demand & Supply.
Measurement of demand. Market Equilibrium.
Unit III: Consumer Behaviour - Utility Theory & Demand Analysis:
Concept and Types of Utility. Function and Measurement of Utility. Equi-Marginal Utility. Derivation of
consumers demand from utility. Uses of Utility theory in decision of individual and market demand.
Unit IV: Consumer Behaviour - Indifference, Preference and Modern Theory of Demand:
Indifference Curve analysis - characteristics and assumptions. Marginal Rate of Substitution, Budget Line &
Consumer Equilibrium. Revealed Preference theory of Demand.
Unit V: Elasticity of Demand and Revenue Decision:
Concept of elasticity of demand. Forms and Degree of elasticity of demand. Concepts of Elasticity of supply.
Demand elasticity and revenue Decisions.
Unit VI: Demand Forecasting:
Quantitative and qualitative methods of demand forecasting. Methods of demand forecasting for new
product and established product. Demand forecasting and business decisions.
Unit VII : Production Analysis:
Concepts of production function, production with one and two variables, law of return, Marginal Rate of
Technical Substitutions, Return to Scale, Economies of Scale & Scope.
Unit VIII: Cost Analysis:
Concept of Cost, Cost Function, Types of cost, Short & Long run cost. Iso-quant, Iso-cost, Iso-revenue,
Rigid Line, Budget Line and BEP.
Unit IX : Structure of Market:
Nature and characteristics of perfect competitive, monopoly, monopolistic and oligopoly market. Conditions
of firms equilibrium in different form of market. Determination of product price & profit in different forms
of market. Short run and long run price and output determination.

PART 2: LESSON PLAN

Subject Matter
Introduction: Basic principles of economics; micro, macro and
managerial economics. Introduction of managerial economic tools in
functional area of business. Objectives of a firm, opportunity cost and
economic profit. Basics of Functions & Calculus. Reading of Graph
and Tables.
Consumer Behaviour- Demand, Supply Analysis : Law, Function,
Determinants (factors), Types, Movement, Shift and Exception of
demand & Supply. Measurement of demand. Market Equilibrium.
1. Numerical & Decision Types Problems
Consumer Behaviour - Utility Theory & Demand Analysis:
Concept and Types of Utility. Function and Measurement of Utility.
Equi-Marginal Utility. Derivation of consumers demand from utility.
Uses of Utility theory in decision of individual and market demand.
2. Numerical & Decision Types Problems
Consumer Behaviour - Indifference, Preference and Modern
Theory of Demand: Indifference Curve analysis - characteristics and
assumptions. Marginal Rate of Substitution, Budget Line & Consumer
Equilibrium. Revealed Preference theory of Demand.

Hours
1, 2

3, 4
5
6, 7
8
9, 10, 11

3. Numerical & Decision Types Problems

12

Elasticity of Demand and Revenue Decision: Concept of elasticity of

demand. Forms and Degree of elasticity of demand. Concepts of
Elasticity of supply. Elasticity and revenue Decisions.

13

4. Numerical & Decision Types Problems

14

Case Analysis
1. Price Elasticity of demand in Real World.
2. Income Elasticity of demand in Real World.
3. Cross-Price Elasticity of Demand in Real the Real World.
4. Substitution between domestic & foreign goods from text
Demand Forecasting: Quantitative and qualitative methods of
demand forecasting. Methods of demand forecasting for new product
and established product. Demand forecasting and business decisions.
Case Analysis
5. Forecasting the demand of air travel over the North Atlantic
Mid Term Class Test
Production Analysis: Concepts of production function, production
with one and two variables, Law of return, MRTS, Return to Scale,
Economies of Scale & Scope.
Cost Analysis: Concept of Cost, Cost Function, Types of cost, Short &
Long run cost. Iso-quant, Iso-cost, Iso-revenue, Rigid Line, Budget
Line, BEP.
5. Numerical & Decision Types Problems (Production)
6. Numerical & Decision Types Problems (Cost)
Structure of Market: Nature and characteristics of perfect
competitive, monopoly, monopolistic and oligopoly market.
Conditions of firms equilibrium in different form of market.
Determination of product price & profit in different forms of market.
Short run and long run price and output determination.
Case Analysis
6. Competition in the stock market
7. Rising competition in the global banking

15
16
17
18
19

Chapter 1, 2 & 3 of
Microeconomics
(PA Samuelson)
Chapter 3 & 4 of Text
(Samuelson & Nordhaus)
Chapter 2 of Salvatore
Schums Outline
Chapter 5 of Text
(Samuelson & Nordhaus)
Chapter 4 of Salvatore
Schums Outline.
Chapter 5 & Appendix 5
of Text (Samuelson &
Nordhaus)
Chapter 4 of Salvatore
Schums Outline.
Chapter 4 of Text
(Samuelson & Nordhaus)
Chapter 3of Salvatore
Schums Outline.
Chapter 3 of Text Book
(Salvatore, D.) and NG
Mankew-Microeconomics
Notes,
Chapter 5 of Text book
(Salvatore, D.)
Chapter 5 of Text book
(Salvatore, D.)
Up to unit 6

20, 21

Chapter 6 of Text
(Samuelson & Nordhaus)

22, 23

Chapter 7 & Appendix 7

(Samuelson & Nordhaus)

24
25
26, 27,
28, 29

30
31
32-33

Comprehensive Case Analysis

Resources

Chapter 6 & 7
of Schums Outline.
Chapter 8,9 &10 of Text
(Samuelson & Nordhaus)
Chapter 8 and
Chapter 9 of Text book
(Salvatore, D.) NG
Mankew-Microeconomics
Self Designed Case
Covering All decision
tools of Managerial Eco.

SUGGESTED READINGS
Text Book Samuelson & Nordhaus, Microeconomics, 19th Edition, 2013
Salvatore, Dominic: Managerial Economics: Theory & Application, Oxford University Press, 2012.
Robert Pindyck and Daniel Rubinfeld, Microeconomics, Pearson, New Delhi, 2011.
Peterson, Lewis and Jain: Managerial Economics, Pearson Education, New Delhi, 2010.
Thomas and Maurice: Managerial Economics: Concepts and Applications; Tata-McGraw-Hill, 2010.
Truett and Truett: Managerial Economics, Wiley India Pvt. Ltd., New Delhi, 2010.
References
J.R. Green, Microeconomic Analysis, PHI International, 2005, (Indian Edition), 2009.
Hal R. Varien, Intermediate Microeconomics, East West Publication, 2010.
Koutsoyiannis, A, Modern Microeconomics, (2nd Edition), Macmillan Press, 1979
Sen, A, Microeconomics : Theory & Applications, Oxford University Press, New Delhi, 2006.
Stigler, G, Theory of Price, (4th Edition), Prentice Hall of India, New Delhi, 1996.
Salvatore, Microeconomic Theory, schums outline, TMH,New Delhi, 2005.
Journals: Economic and Political Weekly, American Economic Review-AEA, Journal of MicroeconomicsAEA, Indian Economic Journal-IEA, Indian Economic Review-DSE.
Magazines and Newspaper: The Economist, Business India, Business Today, The Economic Times, The
Financial Times, Business Line.
PEDAGOGY : Pedagogy of managerial economics course comprises
a. Discussion of basic, core and advance concepts of managerial economics (micro economics part) useful
for complex business decisions
b. Interlink of concepts with functional areas of management with help of application type discussion.
c. Live information, case analysis and article review for application of theory in real business decisions.
d. Discussion on numerical & decision types problems for derivation of exact business solution.
e. Mid term & end term exam for assessment of the in-depth ability of subject.
f. Quizzes, multiple types questions-answer session for instant business decision ability through.
g. In each class live topic of ET/BL/FE/BS/any business news magazine will be discussed.
EVALUATION CRITERIA :
a. Case Analysis/Article Analysis
10 Marks
b. Decision/Numerical Problems
10 Marks
c. Class Quiz/Online Quiz
10 Marks
d. Mid Term Test
10 Marks
e. End Term Examination
60 Marks
TOTAL
100 MARKS
--------------------------------------------------------------------------------------------------------------------------------- Curriculum Developed & Designed for PGDM Programme by Pankaj Kumar, Ph.D. Economics
Associate Professor - Economics
I.T.S - Management & I.T. Institute
Mohan Nagar, Ghaziabad, India
pankajeco@gmail.com
pankajkumar.nks@its.edu.in

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