MBA 603 Master Syllabus

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MBA 603: Managerial Economics and Decisions of the Firm Master Syllabus - Online

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Course Description

The objective of this course is to enable students to develop a clear understanding of economic theory and be able to apply the techniques used in business organizations in solving problems related to decision-making in strategic environments. 

Course Objectives

After completing the course, learners will be able to: 

  • Explain how goals, constraints, incentives, and market rivalry affect economic decision

  • Use supply and demand analysis as a qualitative forecasting tool to determine equilibrium market outcomes

  • Evaluate the factors that underlie both the demand and supply functions in order to be able to analyze consumer and producer behavior

  • Calculate and interpret elasticities and their applications to business decisions

  • Use frameworks to explain the nature of the firm as an integrated whole, as opposed to a loosely connected set of functional departments

  • Evaluate appropriate measures of the firm’s optimal use of resources

  • Apply the structure-conduct-performance paradigm and explain how the nature of industry is affected by market structure

  • Analyze the market structure and explain how it affects business decisions under perfect competition, monopolistic competition, oligopoly and monopoly

  • Analyze data using statistics in order to make sound business decisions

MBA Program Goals

Goals addressed in this course are in bold: 

  • Teaming & Leading - Demonstrate the team leadership and interpersonal skills needed to form, lead, and work effectively on diverse organizational teams.

  • Analytical Decision Making - Demonstrate the ability to analyze uncertain complex management situations using appropriate tools, techniques, and information systems for decision-making.- 

  • Knowledge of Functional Business Disciplines- Demonstrate the ability to integrate knowledge from all functional areas of business into a meaningful firm-level perspective.

  • Global Understanding - Demonstrate a perspective on how businesses operate in the global environment.- Communication Skills - Demonstrate written, oral and presentations skills necessary to explain problems and solutions effectively and persuasively.

  • Ethics and Social Responsibility - Have a sense of professional and social responsibility in the conduct of managerial affairs.

Textbook, Class Notes, and Cases

The textbook for the course is the book by by Michael Baye and Jeff Prince: 

Michael Baye and Jeffrey Prince. Managerial Economics & Business Strategy. McGraw- Hill Higher Education, 9th edition, 2017 

Although the following books are not required, they touch upon some of the topics we will discuss in the course in an amusing and easy to read manner: 

Tim Harford. The Undercover Economist. Oxford University Press, 2012 

Steven Levitt and Stephen Dubner. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. HarperCollins, 2006 

Additionally, I will use other resources such as podcasts (Planet Money, Freakonomics Radio, MarketPlace, etc), newspapers and magazines (The Economist, New York Times, Bloomberg, The Wall Street Journal, Business Week, etc) for some of the class discussions. 

The slides will be posted on Canvas before each class, but may change afterwards depending on the actual content that was covered and discussed during class. 

Tentative Schedule (Sample)

Week 1 (Week 1 Class): 

  • Course introduction. 

  • Opportunity cost, marginal analysis, and incentives. 

    • Baye, Chapter 1 

  • Organization of the firm; The Principal-Agent Problem. 

    • Baye, Chapter 6 (pp. 227–234) 

  • Supply, demand, and markets. 

    • Baye, Chapter 2

Week 2 (Week 2 Class): 

  • Supply, demand, and markets. 

    • Baye, Chapter 2 

  • Quantitative demand analysis. 

    • Baye, Chapter 3

    • Regression Analysis

Week 3 (Week 3 Class): 

  • Uncertainty and asymmetric information. 

    • Baye, Chapter 12 

  • Consumer Behavior. 

    • Baye, Chapter 4

Week 4 (Week 4 Class): 

  • Production and Costs. 

    • Baye, Chapter 5

Week 5 (Week 5 Class): 

  • Understanding the Industry. 

    • Baye, Chapter 7 

  • The Five Forces Framework. 

    • Michael Porter, The Five Competitive Forces that Shape Strategy 

Week 6 (Week 6 Class): 

  • Competitive and Monopolistic Markets.

    • Baye, Chapter 8

Week 7 (Week 7 Class): 

  • Oligopoly Markets. 

    • Baye, Chapter 9

Week 8 (Week 8 Class): 

  • Pricing Strategies. 

    • Baye, Chapter 11

Evaluation and Grades

Course grades will be based on exams, class participation, homework assignments, and case write-ups. 

The final exam will test your understanding of the central ideas of the course. The core concepts will be emphasized in lecture and will often be explored in the cases and class discussion. It will require you to demonstrate your understanding of the key theories and concepts and your ability to apply them to problems. The final exam will be comprehensive. 

You may consult with other students only on homework assignments, but please let me know who you worked with in each of the assignments. The same applies to citing other sources such as resources on the internet and books on the subject. Nevertheless, your written assignment should reflect only your own work. Homework assignments will generally be due the class after they are distributed. 

Case reports will be graded on a relative basis, with the “best” case report receiving the highest mark and the poorest report the lowest mark. 

The final grade will be an average of the following items, weighted as noted: 

Participation 5%
Projects & Homework Assignments 55%
Final Exam  40%
Total 100%

Grade cut-offs will be determined according to the following table: 

Grade Score (rounded)
A 94-100
A- 90-93
B+ 87-89
B 84-86
B- 80-83
C+ 70-79
F 69 to below

The grade cut-offs may be lowered based on the overall score distribution of the class. 

Late Assignments

All assignments are due at the beginning of the following class, unless otherwise stated – this includes homework assignments as well as case write-ups. If the assignment is to be discussed in an online class meeting (case discussion, working through a homework question, etc), no late assignments will be accepted after the beginning of the class. Otherwise, a late assignment will be considered but 25% will be immediately deducted from the assignment grade. Additionally, 25% of the total assignment grade will be deducted for every extra day after the assignment was due. If you will not be in attendance on the day a writing assignment is due, you may email me your assignment, but I must receive your emailed assignment before the beginning of class. I will make exceptions if necessary due to illness or other George Mason-approved emergencies. 

Make-up Exam

Make-up examinations will not be given unless a student has a university-validated excuse and the instructor is notified of in advance of the examination. Without exception, students who request a make-up exam will be asked to provide appropriate documentation before a make-up exam is scheduled. Make-up exams must be completed within three weekdays of the original exam date. Approval of absence from the final exam must be obtained from the Assistant Dean of Academic and Career Services before a make-up exam will be arranged. 

Other Items

e-mail

I will regularly send electronic messages to the entire class via Canvas. Thus, be sure you check the Blackboard site frequently or arrange for mail sent to your George Mason e-mail account to be forwarded to whatever e-mail account you normally use. You are fully responsible for taking the steps listed above, for checking your e-mail regularly, and for any information communicated to the class via e-mail. 

Useful Books and Other References

  1. Bruce Allen, Keith Weigelt, Neil A. Doherty, and Edwin Mansfield. Managerial Economics: Theory, Applications, and Cases. W. W. Norton & Company, 8th edition, 2012. 
  2. Michael Baye and Jeffrey Prince. Managerial Economics & Business Strategy. McGraw- Hill Higher Education, 9th edition, 2017. 
  3. Douglas Clement. Beyond supply and demand: The reasons for increased health care costs. http://minneapolisfed.org/pubs/fedgaz/02-05/supply.cfm, May 2012. 
  4. Tim Harford. The Undercover Economist. Oxford University Press, 2012. 
  5. Michael C. Jensen and William H. Heckling. Specific and general knowledge, and organizational structure. Journal of Applied Corporate Finance, 8(2):4–18, 1995. 
  6. Steven Levitt and Stephen Dubner. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. HarperCollins, 2006. 
  7. Michael E. Porter. How competitive forces shape strategy. Harvard Business Review, 57(2):137–145, March–April 1979. 

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