MANAGERIAL ECONOMICS

Goal: To give special attention to theories interpretation and application of concepts of managerial economies so as to enhance the student’s understanding of the various methods and techniques used in managerial decisions.

GENERAL OBJECTIVES:

On completion of this course, the student should be able to:

Understand the scope of managerial economics.

Know a working definition of business objectives.

Understand the importance of Investment decisions in both private and public enterprises.

Understand fundamental issues involved in pricing including the techniques used in both private and public sectors of the economy.

Understand some basic ideas of the demand side of markets.

Understand indifference theory- (alternative method of explaining the consumers behaviour).

Understand theory of the firm: (The operations of the economic agents performing with the different market structures).

Understand corporate strategy.

Understand cost analysis.

Understand the different types of business organization.

Understand operation research techniques.

1.1 Give a working definition of managerial economics.

1.2 Explain micro-economic theory in business decision-making (consumer theory, pricing theory, demand analysis, cost theory etc).

1. Provide student with aid of a simple example a clear meaning.

2. Lead the student in examining the application of economic theory to business problems.

1.1 Define profit as an objective.

1.2 Evaluate the internal and external influence of objective.

1. Provide a clear explanation of profit among other business objectives.

2. Lead the student in appraising some of the influencing factors.

3.1 Explain the nature of investment decisions.

3.2 Describe modern techniques of investment appraisal and related problems.

3.3 Compare and distinguish between net present value and internal rate of return.

3.4 Describe traditional methods of investment appraisal.

3.5 Explain cost/benefit analysis and public expenditure.

1. Explain of the existing nature of investment.

2. Lead the student in examining modern techniques of investment and work out solutions to some examples.

3. Provide explanation on the conventional methods and its shortcomings.

4. Illustrate with aid of data and graph an analysis of non-conventional techniques used in public expenditure appraisal.

4.1 Explain the complications of pricing.

4.2 Explain the different pricing techniques in use - marginal pricing, average pricing, break-even pricing, mark-up etc.

4.3 Identify the correct approach to pricing of products.

1. Lead the student in examining the intricate issues of pricing products with a reference to the banking industry.

2. Provide an elaborate explanation with a solved problem.

3. Provide a critical analysis with an exercise.

5.1 Define demand.

5.2 Explain the different levels of demand.

5.3 Analyse the determinants of demand.

5.4 Explain methods of demand forecasting-time series analysis, regression analysis etc.

5.5 Explain deficiencies of traditional demand theory.

5.6 Explain the empirical evidence on advertising and pricing in influencing quantity demanded.

1. Provide the student with clear meaning.

2. Instruct the student with aid of a clear labeled diagram the levels of demand and desire mathematically the demand equation.

3. Illustrate with aid of graph to the student the examined factors that influence demand.

4. Provide an analytical explanation with aid of graph.

5. Lead the student in identifying major weaknesses.

6. Lead the student in making a critical examination of the effects with supporting data.

6.1 Define indifference curve.

6.2 Construct an indifference curve using hypothetical or actual figures.

6.3 State the characteristics of indifference curves and their significance for the consumer.

6.4 Construct a budget line.

6.5 Use the combination of budget line and indifference curve to predict some consumer behaviours.

1. Provide a clear meaning.

2. Illustrate to the student using given data the graphing of indifference curve.

3. Illustrate using graph, the properties and provide explanation on their importance.

4. Provide the meaning and illustrate the construction of the graph.

5. Illustrate to the student graphically and derive the equilibrium position.

7.1 Explain the characteristics of a perfectly competitive market.

7.2 Illustrate the nature of demand facing a firm in a perfectly competitive market.

7.1 Describe the short-run and long-run equilibrium of a competitive firm.

7.2 Analyze the concepts of economics of scale.

7.3 Define pure monopoly and the distinguishing features.

7.4 Demonstrate the nature of revenue and demand facing a monopolist.

7.5 Define imperfect competition.

7.6 Describe oligopoly.

1. Provide the student with a clear definition, meaning and the features.

2. Provide an explanation with graphical illustrations.

3. Illustrate with aid of a graph the equilibrium positions.

4. Lead the student in examining the concept with an exercise.

5. Provide a clear meaning and identify the features to the student.

6. Illustrate with graphical presentation to the student.

7. Provide the student with a clear meaning.

8. Lead an explanation on the concept/market with a graphical illustration.

8.1 Define corporate strategy.

8.2 Explain why strategic formulation is necessary for each firm.

8.3 Evaluate both general consideration and economic issues.

8.4 Distinguish between environmental opportunity and corporate competence.

1. Provide a clear meaning.

2. Provide a meaning and explain the desirability or otherwise to a firm.

3. Lead the student in examining the situation.

4. Provide a thorough explanation with practical examples.

9.1 Differentiate between cost for the economists and non-economists.

9.2 Analyze the short-run and long-run cost behaviour.

9.3 Explain the usefulness and application of cost for decision-making.

9.4 Make an estimation of the short-run and long-run average cost curves.

9.5 Evaluate results of empirical research.

1. Provide the student with a clear distinction.

2. Illustrate with aid of a graph to the student the different cost behaviour.

3. Provide an explanation on the usefulness and application of cost analysis.

4. Illustrate to the student with aid of a diagram the different AVC position.

5. Provide an exercise (case study) on cost analysis to the student.

10.1 Explain forms of business organization.

10.2 Explain types of organizational form.

10.3 Evaluate choice of organizational forms.

1. Provide a clear explanation to the student.

2. Lead the student in examining the types.

3. Instruct the student to examine the merit or otherwise of each form.

10.1 Explain forms of business organization.

10.2 Explain types of organizational form.

10.3 Evaluate choice of organizational forms.

1. Provide a clear explanation to the student.

2. Lead the student in examining the types.

3. Instruct the student to examine the merit or otherwise of each form.