COURSE OUTLINE

FACULTY OF BUSINESS & COMMERCE

Course Code: 601/401

Course Title: Managerial Economics

Semester: Fall 2020

Faculty: Dr. Khizra Safdar Khan

Credit Hours: 3 CH
Semester Fall 2020
Program:
Course Convenor: Dr. Khizra Safdar Khan
WhatsApp --
Email
[email protected]

LMS Link https://classroom.google.com

Consultation Hours: Monday and Wednesday11:30 am to 12:30 pm (as proposed by
the course convenor)
Pre-requisite: 501/505/506
Timing As per University Schedule
This document was last updated: Nov, 2020
Course Description
Scarce resources are one of the highlighted issues of today. Economics is all about the best allocation
of these resources. Economists and policy analysts mainly believe that all policy matters should be
decided according to the public interest, which is equitable with the social welfare. This social factor
reveals economic efficiency. This course of managerial economics will help to understand the concept
of this economic efficiency and will explain the procedure, how to measure it. Through this course,
student will enable to discuss the effects of policy intervention on efficiency of resources as well as
effects of government intervention on it.
Along with the focus of this role of government in economic management, taxation, location of firms
and globalization of business, the emphasis is on advanced microeconomic concepts like analysis of
supply & demand, marginal analysis, production and cost analysis under different market conditions,
determination of price and quantity in alternative market structures, input pricing, productivity, business
forecasting and decision making under risk and uncertainty. Purpose of this course is enabling the
students for better decision making, while using the application of economic theory and methodology
within various organizational settings.

Course Goals
By the end of the course, students will possess a clear understanding of how Timely and
efficient use of information is necessary for today's dynamic economic environment, where effective
managerial decision making is required. The aim of this course is to provide students the advanced
understanding of the economic theory and analytical tools for better decisions in managerial
atmosphere. This course will help the students to develop analytical frameworks which allow students a
better understanding of economic events and economic policies. They would be able to relate modern
microeconomic approaches to the problems in industry, regulation and sect oral policy-making as well
as modern macroeconomics to the present-day Pakistani context, and to developing countries in
general

Learning Outcomes

Students who successfully complete the course will have a good understanding of economic concepts
and tools that have direct managerial applications. The course will sharpen their analytical skills
through integrating their knowledge of the economic theory with decision making techniques. Students
will learn to use economic models to isolate the relevant elements of a managerial problem, identify
their relationships, and formulate them into a managerial model to which decision-making tools can be
applied. Among the topics covered in the course are: price determination in alternative market
structures, demand theory, production and cost functions, and decision making under uncertainty. In
addition, the course will provide a basic introduction to econometric analysis and its role in managerial
decision making

Reading Material
 Baye, Michael, Managerial Economics and Business Strategy. Nineth Edition. Boston: McGraw-Hill Irwin, 2016
Mark, Hirschey, Managerial Economics, 14th edition, Thomson/South-Western College Publishing: 2016

Internet Resources:
There are several web sites that have interesting economic/business information and analysis. These
are some useful international and Pakistani web sites/links for your interest and research in the course.
www.ft.com (Financial Times), www.economist.com (The Economist), www.businessweek.com
(Business Week), http://web.mit.edu/krugman/ (the web site of Paul Krugman, an economist), and
www.nber.org (National Bureau of Economic Research), www.worldbank.org (The World Bank),
www.imf.org (International Monetary Fund), www.pakistan.gov.pk (Government of Pakistan),
www.mopd.gov.pk (Planning and Development Division), www.pide.org.pk (Pakistan Institute of
Development Economics), www.finance.gov.pk (Finance Division), www.cbr.gov.pk (Central Board of
Revenue), www.commerce.gov.pk (Commerce Division), www.sbp.org.pk (State Bank of Pakistan),
and www.spdc.org.pk. (Social Policy and Development Centre, Pakistan).

Term Project (If any)

--

COURSE SCHEDULE & CONTENTS

Teaching Material May Include: Lecture Note & Plan, Short Videos, Slides with Voice Notes, Case Studies,
Articles, etc.
Reading Material: Lecture Notes, Book Chapters, Videos, etc.
Assessment Material: MCQs, Class participation, Project, Assignments, etc.

Class Topics To Cover Teaching Reading Assessment Activities

Session Material Material (Assignments, Quiz, etc.)
1. Introduction to course ----
and course outline

The Fundamentals of PPT, lecture notes Chapter 1

Managerial Book 1
Economics.
Introduction, Manager, Voice notes Chapter 1
Economics, Managerial Book 1
Economics, The https://youtu.be/
Economics of Effective wHpoggrYmTY
Management, Identify
Goals and Constraints,
Recognize the Nature and
Importance of Profits,
 Economic versus
Accounting Profits, The
Role of Profits.

2. The Fundamentals of PPT, lecture notes Chapter 1 ----

Managerial Voice notes Book 1
Economics.
The Five Forces https://youtu.be/p
Framework and Industry NTySZieR8k
Profitability, Understand
Incentives, Understand
Markets, Consumer–
Producer Rivalry,
Consumer–Consumer
Rivalry, Producer–
Producer Rivalry,
Government and the
Market.

3. The Fundamentals of PPT, lecture notes Chapter 1 Book 1 Short assessment based on
Managerial Voice notes lecture readings at start of
Economics. the session
Recognize the Time https://youtu.be/X
Value of Money, Present AtvzzNomB4
Value Analysis, Present
Value of Indefinitely
Lived Assets, Use
Marginal Analysis,
Discrete Decisions,
Continuous Decisions,
Incremental Decisions

4. Market Forces: PPT, lecture notes Chapter 2 Book 1 Short assessment based on
Demand and Supply Voice notes lecture readings at start of
Introduction, Demand, the session
Demand Shifters, https://youtu.be/J
Income, Prices of G8HycZn5Tk
Related Goods,
Advertising and
Consumer Tastes,
Population, Consumer
Expectations, Other
Factors, The Demand
Function, Consumer
Surplus.
5. Market Forces: PPT, lecture notes Chapter 2 Book 1 CP1 based on lecture
Demand and Supply readings at start of the
Supply, Supply Shifters, Voice notes session
Input Prices, Technology https://youtu.be/
or Government R9ak57CCFtQ
Regulations, Number of
 Firms, Substitutes in
Production, Taxes,
Producer Expectations,
The Supply Function,
Producer Surplus.

6. Market Forces: PPT, lecture notes Chapter 2 Book 1 CP2,3based on lecture

Demand and Supply Voice notes readings at start of the
Market Equilibrium, session
Price Restrictions and https://youtu.be/-
Market Equilibrium, gjwKh3N14E
Price Ceilings, Price
Floors, Comparative https://youtu.be/
Statics, Changes in KVzk1igYgPc
Demand, Changes in
Supply, Simultaneous
Shifts in Supply and
Demand, Application of
Demand and Supply
analysis.

7. Quantitative Demand PPT, lecture notes Chapter 3 Book 1 Short assessment based on
Analysis. lecture readings at start of
The Elasticity Concept, the session
Own Price Elasticity of
Demand, Elasticity and
Total Revenue.

8. Quantitative Demand PPT, lecture notes Chapter 3 Book 1 Assignment 1 based on

Analysis lecture readings.
Factors Affecting the
Own Price Elasticity,
Available Substitutes,
Time. Expenditure Share,
Marginal Revenue and
the Own Price Elasticity
of Demand, Cross-Price
Elasticity, Income
Elasticity, Other
Elasticities, Obtaining
Elasticities from Demand
Functions, Elasticities for
Linear Demand
Functions,
Elasticities for Nonlinear
Demand Functions

9. Quantitative Demand PPT, lecture notes Chapter 3 Book 1 Quiz 1based on lecture
 Analysis readings at end of the
Evaluating the Overall Fit session
of the Regression Line, (10-15 Minutes) MCQs or
The R-Square,
Numerical Question.
The F-Statistic.

10. Theory of Individual PPT, lecture notes Chapter 4 Book 1 Cp 4 based on lecture
Behavior readings at start of the
Introduction, Consumer session
Behaviour, Constraints,
The Budget Constraint,

11. Theory of Individual PPT, lecture notes Chapter 4 Book 1 Quiz 2 based on lecture
Behavior readings at end of the
Changes in Income, session
Changes in Prices,
(10-15 Minutes) MCQs or
Consumer Equilibrium,
Comparative Statics, Numerical Question.
Price Changes and
Consumer Behaviour,

12. Theory of Individual PPT, lecture notes Chapter 4 Book 1 Short assessment based on
Behavior lecture readings at start of
Income Changes and the session
Consumer Behaviour,
Substitution and Income
Effects, Applications of
Indifference Curve
Analysis, The
Relationship between
Indifference Curve
Analysis and Demand
Curves, Individual
Demand, Market Demand

13. Production and Cost PPT, lecture notes Chapter 5 Book 1 Cp5 based on lecture
The Production Function, readings at start of the
Short-Run versus Long- session
Run Decisions, Measures
of Productivity, Total
Product, Average
Product, Marginal
Product, The Role of the
Manager in the
Production Process,
Produce on the
Production Function,

14. Production and Cost PPT, lecture notes Chapter 5 Book 1 Assignment 2, Cp6 based
Use the Right Level of on lecture readings at start
 Inputs, Algebraic Forms of the session
of Production Functions,
Algebraic Measures of
Productivity, Isoquants,
Iso-cost line, Cost
Minimization, Optimal
Input Substitution, The
Cost Function, Short-Run
Costs,
15. Production and Cost PPT, lecture notes Chapter 5 Book 1 Cp 7 based on lecture
Average and Marginal readings at start of the
Costs, Relations among session
Costs, Fixed and Sunk
Costs, Algebraic Forms
of Cost Functions, Long-
Run Costs, Economies of
Scale, Economic Costs
versus Accounting Costs,
Multiple-Output Cost
Functions, Economies of
Scope, Cost
Complementarity
16. Competitive Markets PPT, lecture notes Chapter 10 Book Assignment 3 based on
Competitive 2 lecture readings.
environment, Factors that
Shape the Competitive
Environment, Market
Characteristics,
Managerial Application

17. Competitive Markets PPT, lecture notes Chapter 10 Book Quiz 3 based on lecture
Profit Maximization in 2 readings at start of the
Competitive Markets session
Marginal Cost and Firm (10-15 Minutes) MCQs or
Supply, Competitive
Numerical Question.
18. Competitive Markets PPT, lecture notes Chapter 10 Book Short assessment based on
Market Supply Curve, 2 lecture readings at start of
Competitive Market the session
Equilibrium
19. Managing in PPT, lecture notes Chapter 8 Book 1 Quiz 4 based on lecture
Competitive, readings at start of the
Monopolistic, and session
Monopolistically (10-15 Minutes) MCQs or
Competitive Markets Numerical Question.
Monopoly, Monopoly
Power, Sources of
Monopoly Power,
Economies of Scale,
Economies of Scope,
Cost Complementarity,
 Patents and Other Legal
Barriers

20. Managing in PPT, lecture notes Chapter 8 Book 1 Cp 7 based on lecture

Competitive, readings at start of the
Monopolistic, and session
Monopolistically
Competitive Markets
Maximizing Profits,
Marginal Revenue, The
Output Decision, The
Absence of a Supply
Curve, Implications of
Entry Barriers.

21. Managing in PPT, lecture notes Chapter 8 Book 1 Short assessment based on
Competitive, lecture readings at start of
Monopolistic, and the session
Monopolistically
Competitive Markets
Monopolistic
Competition, Conditions
for Monopolistic
Competition, Profit
Maximization, Long-Run
Equilibrium, Implications
of Product Differentiation

22. Basic Oligopoly PPT, lecture notes Chapter 9 Book 1 Quiz 5 based on lecture
Models readings at start of the
Introduction, Conditions session
for Oligopoly, The Role
(10-15 Minutes) MCQs or
of Beliefs and Strategic
Interaction, Profit Numerical Question.
Maximization in Four
Oligopoly Settings,

23. Basic Oligopoly PPT, lecture notes Chapter 9 book 1 Short assessment based on
Models lecture readings at start of
Sweezy Oligopoly, the session
Cournot Oligopoly,
Reaction Functions and
Equilibrium,

24. Basic Oligopoly PPT, lecture notes Chapter 9 book 1 Short assessment based on
Models lecture readings at start of
Collusion, Stackelberg the session
Oligopoly, Bertrand
Oligopoly, Comparing
Oligopoly Models
25. Pricing strategies for PPT, lecture notes Chapter 11 Book Assignment 3 based on
firms with Market 1 lecture readings.
Power
Basic Pricing Strategies,
Review of the Basic Rule
of Profit Maximization, A
Simple Pricing Rule for
Monopoly and
Monopolistic
Competition, A Simple
Pricing Rule for Cournot
Oligopoly, Strategies
That Yield Even Greater
Profits, Extracting
Surplus from Consumers,

26. Pricing strategies for PPT, lecture notes Chapter 11 Book Short assessment based on
firms with Market 1 lecture readings at start of
Power the session
Price Discrimination,
Two-Part Pricing, Block
Pricing, Commodity
Bundling, Pricing
Strategies for Special
Cost and Demand
Structures

27. Pricing strategies for PPT, lecture notes Chapter 11 Book Assignment 4 based on
firms with Market 1 lecture readings.
Power
Peak-Load Pricing,
Cross-Subsidies,
Transfer Pricing, Pricing
Strategies in Markets
with Intense Price
Competition, Price
Matching, Inducing
Brand Loyalty,
Randomized Pricing.

28. The Markets for the PPT, lecture notes Chapter 18 Book Short assessment based on
Factors of Production 3 lecture readings at start of
The Demand for Labor, the session
The Competitive Profit-
Maximizing Firm, The
Production Function and
the Marginal Product of
Labor,

29. The Markets for the PPT, lecture notes Chapter 18 Book Quiz 6 based on lecture
Factors of Production 3 readings at start of the
 The Value of the session.
Marginal Product and the (10-15 Minutes) MCQs or
Demand for Labor, Numerical Question.
What Causes the Labor-
Demand Curve to Shift?
The Supply of Labor,

30. The Markets for the PPT, lecture notes Chapter 18 Short assessment based on
Factors of Production Voice notes Book 3 lecture readings at start of
Equilibrium in the Labor the session
Market, Shifts in Labor
Supply, Shifts in Labor
Demand, Monopsony,
The Other Factors of
Production: Land and
Capital
END TERM EXAM

ASSESSMENT

Item Assessment Task Frequency Weightage

1. Quizzes 6-7 20

2. Assignments 4-6 10
3 Mid Term Exam -- 25
4. End-Term Exam 1 25
5. Term Project -- --
6. Class Participation 7-8 20
7. Any Other -- --

Students must complete each component of the assessment to the satisfaction of the course
instructor, and achieve an overall mark of at least 50% in order to pass the course. All
components of the above assessment are compulsory, and must be completed in order to obtain a
pass grade. Students are expected to perform satisfactorily in each item.

Course Policies and Rules

Students must complete each component of the assessment to the satisfaction of the course instructor,
and achieve an overall mark of at least 50% in order to pass the course. All components of the above
assessment are compulsory, and must be completed in order to obtain a pass grade. Students are
expected to perform satisfactorily in each item.
Ethical Standards
Developing professionalism in our students is the key objectives at each level. For that, behaving
ethically is at the heart of what it means to be a professional; it distinguishes professionals from others
in the marketplace. We have created a clear and streamlined set of professional and ethical standards to
guide our students.
All the students are required to

 Act with integrity

 Always provide a high standard of output
 Act in a way that promotes trust in the profession
 Treat others with respect
 Take responsibility

Plagiarism Policy

Plagiarism is defined as "taking and using the thoughts, writings, and inventions of another person as
one's own". When an act of plagiarism, is found to have occurred (more than 16% similarity), any one
or a combination of the following disciplinary action(s) against the student(s) found guilty may be
taken.
(i) The offender may be given a written warning if the offence is minor and is committed for
the first time.
(ii) The offender may be given a failure grade in Term paper or Assignment.
(iii) Any other penalty deemed fit by the “Plagiarism Standing Committee ”.

Prepared By: Name: Dr. Khizra Safdar Khan Signature

Reviewed By: Knowledge Unit Head Name: Dr. Signature

Khizra Safdar Khan

Recommended Dean/HoD Signature

By:
Reviewed by Director QEC Signature
QEC
Approved By Online Academic Council Date