Course module managerial economics


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Course module managerial economics

  1. 1. Course: Managerial Economics(MB105) Course Instructor: Shweta Miglani E- Mail Id: Contact No.:`` 9915633055 Tests: 3 Assignments: 4 Case Studies: 4 Total Marks:100 Marks Breakup: External University Examination: 60 Internal Examinations: 40 Internal Breakup: Mid Semester Examinations: 15 Ist and IInd Hourlies: 10(5 each) Presentation 5 Assignments 5 Case study and Class Test 5 Introduction Economics is a study of mankind in ordinary business of life. The word Economy comes from Greek word for “ One who manages a household”. At first, this origin might seem peculiar. But in fact households and Economies have much in common Objective The subject is incorporated in the degree with major objectives as • To make you understand the world in which you live. • To make you more active participant in your economy • To make you a better decision maker in allocation of resources in your different needs of your life • Last but not the least to assist you in your business decision making Keeping all the objectives in mind the course is being designed to give you extensive knowledge in Business Economics with special reference to MicroEconomics and Macro economics A basic Framework called a module is being designed here that will guide and plan your learning of the course throughout a semester. It will be delivered to you Through 1. Lectures – Module of 45 lectures is being given to you. This contains the content to be delivered in each lecture. We will try to stick to the schedule but we can change the schedule as per the grasping and learning power of the students 2. Presentations – In this topic will be given to a group of 4 to 5 students in
  2. 2. advance on which they have to present themselves in class. The evaluation of the same will be done on the spot. 3. Case Discussions – A situation will be given to you on related topics and student has to recognise a problem and recommend a solution to the same. 4. Assignments – A topic will be given to the students and students have to present information on the same either in electronic form or in hand written form (will be specified on the spot). Total of 4 assignment are planned in the course and more can be included as per the requirement). Assignment has to be submitted within 3 days of given date strictly by 10:00am in campus 1. 5. Tests- Total of 3 tests are being scheduled in the module. Out of which two will be hourlies(Taken at college level) and one will be taken at class level at the end of Semester. If need be, other tests can also be organized as per requirements of the class. Assignment1 Discuss Demand Forecasting methods with help of practical examples from the industry Assignment 2 Pick up any Industry or service center and recognize different cost centers. Classify them under Fixed and variable cost. And find out Break even point for the same. Assignment3 A small case will be provided related to Global GDP Indicators in which the performance of various economies on the basis of GDP has been compared. Keeping in mind current Indian Economy Indicators, judge the position of Indian Economy vis-à-vis other Emerging Economies Assignment4 Effect of Monetary policy on Indian Economy Presentation Topics 1. BRIC- Future Prospects 2. India's Contribution in global Inflation 3. Fuel Price: Will it cross $200 Mark 4. Economic Growth: Costs and benefits 5. Role of Banks in Monetary Policy 6. Indian Economic Indicators 7. Challenges Before Emerging Market Economies 8. India And China- Inclusive Growth 9. Indian Population- An Asset or Liability 10. Has Employment decreased over last 25 years 11. Recession or depression. What’s the difference
  3. 3. 12. Cost push inflatiom vs Demand pull inflation 13. Baby boom and future of the economies 14. Third world debt crisis Activity 1 This is based on Case study 1 only, Products will be allocated in Groups and students has to develop a case on the assigned products predicting demand for the same in near future. 1. crude Oil 2. Small Cars 3. Airlines 4. Electricity 5. Luxury cars 6. Petrol cars Vs other Fuel Cars 7. Leisure Time activities like Clubs, Gyms 8. Watches 9. Designer Jewellery Vs Customized Jewellery 10. Water S.NO. Lectures Topics Introduction (Lecture 1) Introduction to Managerial Economics as a part of MBA Programme - Its meaning, Utility, what does it includes and 1 how it helps an MBA in his/her life
  4. 4. Satisfaction of unlimited wants with limited Resources Principles of Economics Micro Economics - Study of one variable at a time 2 Macro Economics- Study of group of Variables Application Of Micro and Macro In ME - Subject Matter and contributions of other disciplines like Accounting, HR, 3 Statistics etc in the same, Macro Vs Micro Economics Introduction to concept Of Principles Of ME opportunity Cost Principle- The Cost of Sacrificing next Economics best Alternative. Ex - How person selects best Job out (Lecture 2-5) of various alternatives Marginal and Incremental Principles - How the costs are being affected by any decision in the business. Ex- college 5 decides to open any new course national Income- Amt of goods and services produced within one fiscal year at their market Prices GDP- Amt of goods and services produced within domestic boundaries if country by anybody including 6 foreign national Demand Analysis- Meaning Of demand- Quantity demanded at any given time Effective demand- Desire + Willingness to Buy + ability to buy Types Of goods- Categorisation on the basis of types of 7 demand Factors affecting Demand Price( Price Effect) - Law of Demand ie Inverse relation 8 Demand between price and Demand Analysis Other Factors affecting Demand - Income, Price of 9 (Lecture 6- 10) Related Goods etc Elasticity Of Demand- Degree of Responsiveness of demand due to change in any one factor Factors affecting Elasticity - Type of Product, Number of 9 Substitutes Types of elasticity- Price Elasticity, Income, Cross and Promotional Elasticity of demand, 10 Relationship between Elasticity and total Revenue 11 Case Discussion
  5. 5. Demand Forecasting- Ability to predict demand of various products, Need of Forecast - How does it affect Costs, Revenues Production, Types of 12 Forecast - Active Forecasts, Passive Forecasts Market experiment Method - When actual or sample product is tried and tested in market 1. Demand Actual Market, 2. 14 Forecasting Market simulation Method Techniques Survey of Consumer Intentions- 1. Census Survey, 2. 15 (Lecture 11-13) Sample Survey, 3.Test Marketing Statistical Method - 1. Regression, 2. Correlation, 3.Moving Average, 4. Leading 16 Indicator Indifference Curve analysis- Concept of Utility- Want Satisfying Power of Product, Utility Analysis Indifference Curve - Locus of points showing different (Lecture 14-15) combinations of two products consumed and yielding same level of satisfaction 17 Properties of Indifference Curve Properties of Indifference curve analysis (contd), Consumer Equilibrium- Best satisfaction level of 18 consumer under Indifference curve analysis Production Function- Relationship between factors of production and output Short Run- When atleast one factor of production is a variable factor Long Run Production Function - When all the factors are variable factors Law of Variable Production Proportions- Rate of change in output due to change in proportions of one factor of production, keeping other factor 19 Function constant (Lecture 16-18) Long Run Production Function- Application of Law of returns to scale ie rate of change in output when all the factors are variable Iso Quants and Iso Cost Line- locus of combinations of factors of production yielding same level of output and 20 same level of cost respectively
  6. 6. Introduction to Cost Function- Relationship between production and cost function i.e level of output will decide 21 cost Theory of Costs Concept of Cost- Payment made to all the factors of production Types of Costs- 1. Fixed Cost 2. Variable Cost 3. Short Run Cost 22 4. Long Run Cost Cost Function Types of Costs-(Contd.) (Lecture 19-23) 5.Average Cost, 6. Marginal Cost, 7. Incremental Cost, 8. Private Cost, 9. Sunk Cost, 23 10.Externalities Short Run Cost Function- Explanation of different cost 24 Curves under Short Run Function Long Run Cost Function- Behaviour of cost when all the factors are variable Short Run Vs Log run- Which Function to adopt at what level of 25 output Price Function- Function decided by demand and supply forces Moventment of Price- Case where Demand and supply Price moving in same direction Case Where demand and supply move in opposit Direction 26 Function(Lecture Factors affecting Price of Product, 24) Types of Pricing Techniques- Cost based Pricing, Marginal Pricing, Penetration Pricing, Price Skimming Strategy Breakeven 27 analysis - Point of No Profit No Loss
  7. 7. Market Structure Concept of Market - Place where buyers and sellers come together to sell a product, Classification of market on the basis of degree of competition Perfect Competition- characterized by Large number of players selling alike Product Monopolistic Competition- characterized by large number of buyers and sellers selling hetrogenous products eg daily use Products like Toothpaste Oligopoly - Characterized by few big players selling Hetrogenous or homogenous Products eg Automobile Market Monopoly - 28 characterized by one Player selling unique Product Perfect Competition- Price and output determination under perfect competition giving rise to Supernormal 29 Profits, Normal Profits, Losses Market Structure Monopoly - Features, Price Discrimination Charging different set of prices for (Lecture 25-30) same Product, Degrees - Ist Degree, IInd Degree, IIIrd Degree output 30 Price and output determination under Pure monopoly Price and output determination under discriminating monopoly - In two different markets, where in one is perfect competition and other has monopoly 31 Myths under Monopoly markets 32 Monopolistic competition- Price and output determination Oligopoly Cournot model Price and output is determined under zero Cost Structure Ex Mineral Water, Perfect Collusion model- when cartel is being formed by all players on mutual understanding and agrees to share 33 profits equally Kinked Demand Model- when upper part of demand curve is highly elastic and lower portion is highly inelastic give rise to kink in demand curve at its centre and making a 34 price of product a rigid price 35 Test 2 Introduction to Macro Economics (Lecture Macro Economics - Study of group of variables, Macro 36 31) economic Policies 37 Discussion of Case study 3
  8. 8. National Income- Amt of goods and services produced within one fiscal year at their market Prices GDP- Amt of goods and services produced within domestic National Income boundaries if country by anybody including foreign national GNP- Amt of goods and services produced by indian 38 (Lecture 32-33) National residing in any part of world. Methods of Measuring National Income- Income 39 Method, expenditure Method, Value added Method 40 Social Accounting- Meaning, Method Consumtion Function- Relationship between Consumption and income of an individual, Consumption Attributes- Marginal propensity to consume and Average 41 Function (Lecture Propensity to consume, 34-35) Keynes Psychological Law of Consumption Dussenbery and fried Man Hypothesis- Shows the 42 movement of APC and MPC over a long period of time Claasical Theory of Income, output and Employment 43 Assumes Levelof Full employment is a normal situation Theories of Principle of effective Demand point where aggregate Income, output and demand price is equal to Aggregate ssupply Price, Investment Keynes theory of Income, Output and employment- (Lecture 36-38) Proves level of Full employment is abnormal situation and level of under employment a normal situation for any 44 economy Theory of Multiplier- Relationship between investment and income generation Static Multiplier- That does not take into consideration Multiplier Function any time lag between income and consumption (Lecture 39-40) Dynamic Multiplier- that takes into consideration time lag between income and consumption, 45 Leakages of Multiplier Government Multiplier, Tax Multiplier, Balanced Budget 46 Multiplier Inflation- When too much money is chasing too few a Inflation (Lecture goods Types of 41-43) Inflation causes of 47 Inflation- Supply or Demand 48 Discussion of Case study 4 Stabilisation Policies (lLecture 49 44-45) Monetary Policy&Fiscal Policy 50