Symbiosis Institute of Business Management, Hyderabad

Academic Year – 2019-20 (Batch of 2019-21)

MBA COURSE HANDOUT (Semester – I)
Course : Managerial Economics

Course Code : 0211410109 No. of Credits 02

Faculty Name : Dr. Vinay Ramani

Catalogue Code : T6075 No. of Hours 30

Consultation Hours : By appointment on all Teaching days.

Mobile : 76654 38010 Email ID TBA

Program Objectives: -
 To nuture corporate leadership skills and social consciousness among students.
 To prepare students for a rewarding corporate career by training them on management
practices through experiential learning and theoretical constructs.
The POs (Program Outcomes) are as follows: -
 Students should be able to demonstrate leadership skills.
 Students should be able to understand and be conscious of the impact of managerial
decisions on the triple bottom-line – Profits, People and Planet.
 Students will be adept at analyzing and applying theoretical constructs to various diverse
business scenarios.
Course Objectives (SIDU): -
CO(1):- Enable the student to apply economic principles in managerial decision problems
using economic reasoning.
CO(2):- Help students to discover how firms attempt to reach optimal managerial decisions in
the face of constraints.
CO(3):- Enable the student to understand and interpret business situations and environment,
using a quantitative and analytical approach.
Learning Outcomes: -
1. Gain a better understanding of demand and supply
2. Understand the use of marginal analysis – economists think in terms of margins
3. Understand the relationship between elasticity and total revenue
4. Understand the consumer’s utility maximization problem subject to a budget constraint
5. Understand the economic relevance of fixed cost, variable cost, marginal cost
6. Understand why a firm earning a negative profit may continue to operate
7. Understand market structures – perfect competition, monopoly, and oligopoly
8. Understand how government regulations – price controls, import tariff impact the market
9. Understand how a manager can mitigate incentive problems in the workplace
10. Understand how innovative pricing strategies can increase a firm’s profit

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Recommended Text Book: -
 Managerial Economics: Principles and Worldwide Applications – Dominick Salvatore,
Siddhartha K. Rastogi – Oxford University Press (8th edition)
Suggested Reference Books: -
1. Microeconomics – David Besanko and Ronald Braeutigam – Wiley Publishers (5th edition)
2. Microeconomics – Robert Pidynck and Daniel Rubinfeld – Pearson Publishers (8th edition)
Course Map:
The following table shows how the Course Learning Outcomes relate to the overall Program
Learning Goals and Outcomes, and indicates where these are assessed:

Course Description Learning Outcomes Assessments

Subject & Course Code:- Managerial Economics

At the end of the course, the student is

expected to:
 Class
Microeconomics is the branch of economics Discussion
that studies individual decision making – LO (1)Gain a better understanding of
Demand, Supply, and a Market system  Exam
decisions taken by a consumer, a producer –
given a set of constraints. The course
(0211410109)

applies economic theory and uses tools of

decision science to understand how an  Class
individual consumer or an organization can LO (2) Understand the usefulness of Marginal Discussion
achieve their objectives. An important aspect Analysis
of microeconomics is the study of how
 Exam
consumers and producers interact to form
larger units – markets. This interaction allows
us to understand how markets operate and  Class
evolve, and how are they affected by LO (3) Understand Government Regulations Discussion
government policies and regulations. and different market structures.
Exam

Course Outline (Each session is of 1 ½ Hour): -

Topic
Session Chapter Evidence of Learning:
Topic / Area Covered Alignment (if
No. Reading Assessment/Evaluation
any)
Introduction to Managerial Economics: Why study Lecture &
Chapter 1 of Class Discussion,
1 Managerial Economics. Nature and importance of profits- Class
Text Book Exam/Quiz
economic vs accounting profits Discussion
Chapter 2 and Lecture &
Market Forces – Demand & Supply, Comparative Statics, Class Discussion,
2-3 Chapter 3 of Class
Price Elasticity of Demand and its use Exam/Quiz
Text Book Discussion
Lecture &
Marginal Analysis: Discrete Decisions-Continuous Chapter 4 of Class Discussion,
4-5 Class
Decisions-Incremental Decisions Text Book Exam/Quiz
Discussion
Lecture &
Consumer Behaviour: : Preference ordering, Feasible set Chapter 2 of Class Discussion,
6 Class
Consumption decision: Indifference curve analysis,MRS Text Book Exam/Quiz
Discussion
Comparative Statics-Price Changes and Consumer Lecture &
Chapter 2 of Class Discussion,
7 Behavior- Class
Text Book Exam/Quiz
Income Changes and Substitution and Income Effects Discussion
Lecture &
Applications of consumer behaviour: (i) Buy One – Get Class Discussion,
8 Class Notes Class
One Free, (ii) In-kind subsidy vs equivalent Cash transfer Exam/Quiz
Discussion

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 Topic
Session Chapter Evidence of Learning:
Topic / Area Covered Alignment (if
No. Reading Assessment/Evaluation
any)
Production Theory: Production Function: Short-Run vs.
Long-Run Decisions Lecture &
Chapter 7 of Class Discussion,
9 Measures of Productivity: Total Product, Average Class
Text Book Exam/Quiz
Product, Marginal Product, Produce on the Production Discussion
Function-Use the Right Level of Inputs
Lecture &
Algebraic Forms of Production Functions & Algebraic Chapter 7 of Class Discussion,
10 Class
Measures of Productivity: Isoquants, ISO costs Text Book Exam/Quiz
Discussion
Cost Theory: Optimal Input Substitution
Cost Function: Short-Run Costs, Average and Marginal
Lecture &
Costs, Relations among Costs Chapter 8 of Class Discussion,
11-12 Class
Algebraic Forms of Cost Functions: Long-Run Costs, Text Book Exam/Quiz
Discussion
Economies of Scale; Multiple-output Cost Functions:
Economies of Scope
Lecture &
Market Behavior: Types of Markets - Perfect competition, Chapters 9 of Class Discussion,
13-14 Class
Deriving the supply curve of a perfectly competitive firm Text Book Exam/Quiz
Discussion
Consumer Surplus, Producer Surplus, Market
Lecture &
Equilibrium: Price Restrictions and Market Equilibrium Chapter 2 of Class Discussion,
15-16 Class
text Book Exam/Quiz
Price Ceilings-Price Floors Discussion

Chapter 9 and Lecture &

Monopoly and its Regulation, Externalities and Market Class Discussion,
17-18 Chapter 13 of Class
failure Exam/Quiz
Text Book Discussion
Pricing strategies for firms with market powers: Market
Lecture &
Power and its sources, conjectural variations, Basic Chapter 12 of Class Discussion,
19-20 Class
Pricing Strategies-Review of the Basic Rule of Profit Text Book Exam/Quiz
Discussion
Maximization

Expectations from Students: -

 To participate in the classes exercises and activities
 To be present in the class on time specified by all means.
 To be sincere in doing the assignments and class preparations
 To maintain the dignity of a classroom and cooperate for the class and restrain from using
mobile phones
 To actively participate in case analysis and incorporate the theories into practical phenomena
 To be consistent in preparation for the class and tests which enables continuous learning
 To have a parallel awareness on the current business trends and events to get associated with
the theories learnt.
 To read the relevant articles in the newspapers and keep updated with the recent changes.
Evaluation Timelines
Keeping in line with continuous evaluation at SIBM, the following schedule have been drawn.
Students are expected to go through the dates / sessions mentioned and prepare accordingly.
Component
Component Name Due Date Marks Declaration By Weightage
Number
Exam 1 1 6th session Within a Week 20 Marks
Exam 2 2 12th session Within a Week 20 Marks
Exam 3 3 19th session Within a Week 20 Marks
End Exam At the end of the semester 40 Marks

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 Total 100 Marks

Quality Assurance: -
The SI (DU) is actively monitoring student learning and quality of the student experience in all its
programs. A random selection of completed assessment tasks may be used for quality assurance, such
as to determine the extent to which program learning goals are being achieved. The information is
required for accreditation purposes, and aggregated findings will be used to inform changes aimed at
improving the quality of SI (DU) programs. All material used for such processes will be treated as
confidential and will not be related to course grades.
Brief Profile of the Faculty Member: -
Vinay Ramani is an Associate Professor in the economics area at IIM Visakhapatnam. He holds a
Ph.D. in economics from the University at Buffalo, The State University at New York. He has taught
at University of Michigan and at IIM Udaipur. His areas of interest include Industrial Organization,
Strategy, and Pricing.

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