K L University

Department of Business Administration

Course Handout for1st Year MBA PROGRAM
A.Y.2017-18, I Semester

COURSE NAME : MANAGERIAL ECONOMICS

COURSE CODE : 15MB51C2

YEAR OF OFFERING THE COURSE : I Year

SEMESTER OF OFFERING THE COURSE : I Semester

LTP :30-0

ACADEMIC YEAR : 2017-2018

COURSE COORDINATOR : Dr. V. V. Madhav

COURSE INSTRUCTORS :-

COURSE TEACHING ASSOCIATES (If any) : Not Applicable

COURSE OBJECTIVE:

1. To develop students capacity to analyze the economic environment in which business entities
operate.
2. To make students to understand how managerial decisions can vary under different constraints that
each economic environment places on a managers pursuit of its goals
3. Develop the intuition for analyzing economic problems from a managerial perspective in an
organizational & business context. Have the basic tools that structure the microeconomic problems
for optimal decision-making.

COURSE RATIONALE
Managerial Economics is the application of economic theory and methodology to managerial decision making
problems within various organizational settings such as a firm or a government agency. This course seeks to
provide the analytical framework and understanding of economic behavior with a sharp, logical thinking and
useful techniques for decision making from an economic view point, and highlight the businessmans or
managers role in the decision process. This course is designed for MBA Students to enable them to integrate
various principles and concepts from both Micro and Macro Economics with typical problems of managerial
decision making in business organizations that operate in local as well as in global contexts.
 COURSE OUTCOMES

CO NO COURSE OUTCOMES SO BTL

Apply the intuition for analyzing economic problems from a

CO 1 Managerial perspective i n a n organizational & business context. a, 2
b
Use the basic tools that structure the microeconomics
CO 2 Problems fortheory
Analyze the optimal
of decision-making.
demand, forecast and estimation of demand b 2
for managerial decision making.
CO 3 Analyze different types of competition that exist in external f 2
Environment.
CO4 Analyze the Macro Economic Environment of the f 2
Organization

COURSE OUTCOME INDICATORS (COIs):

CO COI-1 COI-2 COI-3

CO-1 To understand basic concepts
of economics, managerial
economics
CO-2 Understand Concept of
demand , its determinants
and law of demand
CO-3 Understanding short run cost
behavior Understanding long
run cost behavior
CO-4 Understanding the National
income, Measurement and
concepts
Understand Nature and
tools of ME
Understand
Determinants and
elasticity of demand
Analyzing the theory of
production
Analyze the effect of
trade cycles in the
economy
Apply Optimization
techniques and Theories of
the firm
Application of demand theory
in business situations
Analyzing pricing strategies
in different markets
Analyze the effect of inflation
on the economy
SYLLABUS (As approved by BoS):

SYLLUBUS

Introduction: Economics and managerial decision making; Managerial Economics, nature and scope of
Managerial Economics; Tools of Managerial Economics; Risk, Uncertainty and Probability Analysis.
Optimization techniques: Firm Theory: Objectives of the firm; Theory of the growth of the firm: Marris
and Penrose; Role of a Managerial Economist. Demand and Advertisement Analysis: Concept of demand;
Determinants of demand, Law of Demand; Elasticity of demand; Demand estimation and demand
forecasting, Demand forecasting for consumer durables and capital goods. Techniques of demand
forecasting. Advertising Contribution of Economic Theory: Methods of determining Total advertising
budget; Cyclical Fluctuations of Advertising, Measuring the Economic Effects of Advertising. Production
and Cost Analysis: Production functions, Long Run and Short Run Production Functions, The Cobb- Douglas
Production function, Optimum input combination; Cost concepts, Short- run and Long- run cost functions,
Cost curves, Economies of Scale; Introduction to pricing and pricing practices .Market Analysis:
Markets, Kinds of Competition; Features of different types of market structures, Price
& Output determination under Perfect competition, Monopoly, Monopolistic competition, Oligopoly;
Monopoly Policy MRTP - Macroeconomic concepts: National Income, Measurement of National Income,
Uses of National Income Statistics; Business Cycles, Stages of business cycles; Inflation, Types of Inflation,
Impact of inflation, Measures to overcome Inflation.

RECOMMENDED TEXT BOOK

Dominick Salvatore, Managerial Economics, Oxford publications, 2007.

REFERENCE BOOKS
1. H.L.Ahuja, Managerial Economics, McGraw Hill, 2008.

2. Paul G.Keat, Philip K.Y.Young and Sreejata Banerjee, Managerial Economics, Pearson
education, 2009.
3. P.L. Mehta, Managerial Economics, S.Chand& Sons, New Delhi, 2007.
4. D.N. Dwivedi ,Managerial Economics, Vikas Publications, New Delhi-2007.
5. G.S.Gupta, Macro Economics Theory and Applications, The McGraw Hill
Companies, 2008
Other Books, References: (As recommended for reference by the course team, if any): NIL

Deviations (if any) from BoS approved syllabus and the topics planned : NIL

COURSE DELIVERY PLAN:

Teaching-
Sess. Evaluation
CO COI Topic (s) Learning
No. Components
Methods
lecture and In sem. Exam and
1 1 1 Introduction to ME
interaction End Sem. Exam
Managerial Decision Making Process and Role of lecture and In sem. Exam and
2 1 1
Economics interaction End Sem. Exam
lecture and In sem. Exam and
3 1 1 Nature Managerial Economics
interaction End Sem. Exam
lecture and In sem. Exam and
4 1 2 Scope of Managerial Economics
interaction End Sem. Exam
Tools of Managerial Economics Role of a managerial lecture and In sem. Exam and
5 1 2
Economist interaction End Sem. Exam
lecture and In sem. Exam and
6 1 2 The firm theory and objectives of the firm
interaction End Sem. Exam
lecture and In sem. Exam and
7 1 3 Risk and uncertainty and probability analysis
interaction End Sem. Exam
lecture and In sem. Exam and
8 1 3 Risk and uncertainty and probability analysis
interaction End Sem. Exam
lecture and In sem. Exam and
9 1 3 The growth theory of Marris and Penrose
interaction End Sem. Exam
lecture and In sem. Exam and
10 1 3 Case study
interaction End Sem. Exam
Concept of Demand, Determinants of Demand and lecture and In sem. Exam and
11 2 1
Demand function interaction End Sem. Exam
lecture and In sem. Exam and
12 2 1 Law of demand and its exceptions
interaction End Sem. Exam
Expansion, contraction - increase and decrease in lecture and In sem. Exam and
13 2 1
demand t interaction End Sem. Exam
lecture and In sem. Exam and
14 2 1 Types of Demand
interaction End Sem. Exam
lecture and In sem. Exam and
15 2 1 Meaning of demand elasticity, types of elasticity
interaction End Sem. Exam
Factors determine elasticity of demand and uses of lecture and In sem. Exam and
16 2 2
elasticity of demand interaction End Sem. Exam
Meaning and process of demand forecasting, lecture and In sem. Exam and
17 2 2
quantitative methods of demand forecasting interaction End Sem. Exam
lecture and In sem. Exam and
18 2 3 Qualitative methods of demand forecasting
interaction End Sem. Exam
lecture and In sem. Exam and
19 2 3 Advertising Contribution of Economic Theory
interaction End Sem. Exam
lecture and In sem. Exam and
20 2 3 Methods of determining Total advertising budget
interaction End Sem. Exam
 lecture and In sem. Exam and
21 2 3 Methods of determining Total advertising budget
interaction End Sem. Exam
Cyclical Fluctuations of Advertising, Measuring the lecture and In sem. Exam and
22 2 1
Economic Effects of Advertising. interaction End Sem. Exam
lecture and In sem. Exam and
23 2 1 Case study
interaction End Sem. Exam
Meaning of production function: Short run and long lecture and In sem. Exam and
24 3 1
run interaction End Sem. Exam
Law of variable Proportions, short run production lecture and In sem. Exam and
25 3 1
function interaction End Sem. Exam
lecture and In sem. Exam and
26 3 2 Law of returns to scale , long run production function
interaction End Sem. Exam
lecture and In sem. Exam and
27 3 2 Returns to Scale & Economies of Scale
interaction End Sem. Exam
lecture and In sem. Exam and
28 3 2 Cobb-Douglas Production function
interaction End Sem. Exam
lecture and In sem. Exam and
29 3 2 Various concepts of economic costs
interaction End Sem. Exam
lecture and In sem. Exam and
30 3 2 Short Run and Long run cost curves
interaction End Sem. Exam
lecture and In sem. Exam and
31 3 2 Short Run and Long run cost curves
interaction End Sem. Exam
lecture and In sem. Exam and
32 3 2 Internal economies
interaction End Sem. Exam
lecture and In sem. Exam and
33 3 2 External economies
interaction End Sem. Exam
lecture and In sem. Exam and
34 3 2 Capital budgeting
interaction End Sem. Exam
lecture and In sem. Exam and
35 3 2 capital management financial policy
interaction End Sem. Exam
lecture and In sem. Exam and
36 3 2 Meaning of Market and market structures
interaction End Sem. Exam
lecture and In sem. Exam and
37 3 3 Equilibrium conditions
interaction End Sem. Exam
Price & Output determination under Perfect lecture and
38 3 3 End Sem. Exam
competition, interaction
Monopoly -Price & Output determination under lecture and
39 3 3 End Sem. Exam
Perfect competition Oligopoly interaction
Monopoly -Price & Output determination under lecture and
40 3 3 End Sem. Exam
Perfect competition Oligopoly interaction
lecture and
41 4 1 End Sem. Exam
National income definition, components and concepts interaction
lecture and
42 4 1 End Sem. Exam
Measurement of national income interaction
lecture and
43 4 1 Uses and difficulties in measuring national income End Sem. Exam
interaction
lecture and
44 4 2 Trade Cycles Phases End Sem. Exam
interaction
 lecture and
45 4 3 Inflation-Types, effect and remedial measures End Sem. Exam
interaction
46-50 Presentations Active Learning Mini Project

Session wise Teaching Learning Plan

Session Number:

Session Number: 1
Session Outcome: After this session, the student will be able to understand Introduction of Managerial Economics.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Introduction of Managerial Economics 1 Lecture
15 Verify Discussion
05 Summary

Session Number: 2
Session Outcome: After this session, the student will be able to know Managerial Decision Making Process and Role of
Economics
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Managerial Decision Making Process and Role of Economics 1 Lecture
15 Q&A Interaction
05 Summary

Session Number: 3

Session Outcome: After this session, the student will be able to know the meaning and characteristics of managerial
economics.
Time(min) Topic BTL Teaching Learning Method
05 Introduction
20 Managerial Economics - Meaning, Nature & characteristics 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 4
Session Outcome: After this session, the student will be able to understand Scope and subject matter of managerial
economics.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Scope and subject matter of managerial economics 1 Lecture
15 Discussion Interaction
05 Summary
Session Number: 5
Session Outcome: After this session, the student will be able to Tools of Managerial Economics

Time(min) Topic BTL Teaching Learning Method

05 Recap
Tools of Managerial Economics
20 1 Lecture
15 Q&A Interaction
05 Summary

Session Number: 6
Session Outcome: After this session, the student will be able to understand Role of a managerial Economist
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Role of a managerial Economist 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 7
Session Outcome: After this session, the student will be able to analyze the theory of firm.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Firm theory and objectives of the firm. 2 Lecture
15 Discussion Interaction
05 Summary

Session Number: 8
Session Outcome: After this session, the student will be able to apply and analyze Risk and uncertainty and probability.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Risk and uncertainty and probability analysis 2 Lecture
15 Q&A Interaction
05 Summary

Session Number: 9
Session Outcome: After this session, the student will be able to analyze the growth theory of Marris and Penrose.
Time(min) Topic BTL Teaching Learning Method
05 Recap
Active learning - Case
20 growth theory of Marris and Penrose 2
analysis
15 Discussion
05 Summary

Session Number: 10
Session Outcome: After this session, the student will be able to do case analysis.
 Time(min) Topic BTL Teaching Learning Method
Recap
Active Learning - Case
Case study 1
50 Analysis
Discussion
Summary

Session Number: 11
Session Outcome: After this session, the student will be able to explain the Meaning and definition of demand and
demand function
Time(min) Topic BTL Teaching Learning Method
05 Recap
Meaning and definition and determinants of demand &
20 1 Lecture
demand function
15 Discussion Interaction
05 Summary

Session Number: 12
Session Outcome: After this session, the student will be able to comprehend the Law of demand and Exception to the
law of demand
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Law of demand and Exception to the law of demand 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 13
Session Outcome: After this session, the student will be able to understand the concept of Expansion & Contraction of
demand.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Expansion & Contraction of demand 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 14
Session Outcome: After this session, the student will be able to understand the types of demand.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Types of Demand 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 15
Session Outcome: After this session, the student will be able to know meaning of demand elasticity, types of elasticity.
Time(min) Topic BTL Teaching Learning Method
05 Recap
 20 Meaning of demand elasticity, types of elasticity 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 16
Session Outcome: After this session, the student will be able to understand the Factors determine elasticity of demand
and uses of elasticity of demand.
Time(min) Topic BTL Teaching Learning Method
05 Introduction to case
Factors determine elasticity of demand and uses of elasticity
20 1 Lecture
of demand
15 Discussion Understand and present
05 Summary

Session Number: 17
Session Outcome: After this session, the student will be able to know the meaning and process of demand forecasting,
quantitative methods of demand forecasting.
Time(min) Topic BTL Teaching Learning Method
05 Recap
Meaning and process of demand forecasting, quantitative
20 1 Lecture
methods of demand forecasting
15 Discussion Interaction
05 Summary

Session Number: 18
Session Outcome: After this session, the student will be able to analyze demand forecasting.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Qualitative methods of demand forecasting 2 Lecture
15 Discussion Interaction
05 Summary

Session Number: 19
Session Outcome: After this session, the student will be able to analyze significance of Advertising.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Advertising Contribution of Economic Theory 2 Lecture
15 Discussion Interaction
05 Summary

Session Number: 20
Session Outcome: After this session, the student will be able to analyze methods of determining Total advertising budget.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Methods of determining Total advertising budget 2 Lecture
15 Discussion Lecture with PPT
05 Summary
Session Number: 21
Session Outcome: After this session, the student will be able to analyze the methods of determining Total advertising
budget
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Methods of determining Total advertising budget 2 Lecture
15 Discussion Interaction
05 Summary

Session Number: 22
Session Outcome: After this session, the student will be able to analyze Methods of determining Total advertising
budget
Time(min) Topic BTL Teaching Learning Method
05 Recap
Cyclical Fluctuations of Advertising, Measuring the Active Learning - Case
20 2
Economic Effects of Advertising. analysis
15 Discussion
05 Summary

Session Number: 23
Session Outcome: After this session, the student will be able to analyze the Case study.
Time(min) Topic BTL Teaching Learning Method
05 Recap
Case study Active Learning - Case
20 2
analysis
15 Discussion
05 Summary

Session Number: 24
Session Outcome: After this session, the student will be able to understand the Concept of production function.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Concept of production function 1 Lecture
15 Discussion Lecture with PPT
05 Summary

Session Number: 25
Session Outcome: After this session, the student will be able to understand the Law of variable Proportions, short run
production function.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Law of variable Proportions, short run production function 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 26
Session Outcome: After this session, the student will be able to understand Law of returns to scale , long run production
function.
Time(min) Topic BTL Teaching Learning Method
05 Introduction to case
20 Law of returns to scale , long run production function 1 Lecture
Case study Active learning - Case
15
analysis
05 Summary

Session Number: 27
Session Outcome: After this session, the student will be able to know the Returns to Scale & Economies of Scale.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Returns to Scale & Economies of Scale 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 28
Session Outcome: After this session, the student will be able to understand Cobb-Douglas Production function.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Cobb-Douglas Production function 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 29
Session Outcome: After this session, the student will be able to understand the various concepts of economic costs.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Various concepts of economic costs 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 30
Session Outcome: After this session, the student will be able to Short Run and Long run cost curves.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Short Run and Long run cost curves 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 31
Session Outcome: After this session, the student will be able to understand the Short Run and Long run cost curves
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Short Run and Long run cost curves 1 Lecture
 15 Discussion interaction and videos
05 Summary

Session Number: 32
Session Outcome: After this session, the student will be able to understand the Internal economies.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Internal economies 1 Lecture
15 DISCUSSION interaction
05 Summary

Session Number: 33
Session Outcome: After this session, the student will be able to External economies.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 External economies 1 Lecture
15 Discussion interaction
05 Summary

Session Number: 34
Session Outcome: After this session, the student will be able to understand the Capital budgeting.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Capital budgeting 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 35
Session Outcome: After this session, the student will be able to analyze capital management financial policy
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 capital management financial policy 2 Lecture
15 Discussion Interaction
05 Summary

Session Number: 36
Session Outcome: After this session, the student will be able to analyze the meaning of Market and market structures
Time(min) Topic BTL Teaching Learning Method
05 Recap
Meaning of Market and market structures Active Learning - Case
20 2
analysis
15 Discussion
05 Summary
Session Number: 37
Session Outcome: After this session, the student will be able to analyze the case
Time(min) Topic BTL Teaching Learning Method
05 Recap
Equilibrium conditions Active Learning - Case
20 2
analysis
15 Discussion
05 Summary

Session Number: 38
Session Outcome: After this session, the student will be able to understand the Price & Output determination under
Perfect competition.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Price & Output determination under Perfect competition, 1 Lecture
15 Discussion Interaction
05 Summary

Session Number: 39
Session Outcome: After this session, the student will be able to understand the monopoly -Price & Output
determination.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Monopoly -Price & Output determination 1 Lecture
15 Discussion interaction
05 Summary

Session Number: 40
Session Outcome: After this session, the student will be able to analyze the features Monopoly -Price & Output
determination under Perfect competition Oligopoly.
Time(min) Topic BTL Teaching Learning Method
05 Recap
Monopoly -Price & Output determination under Perfect
20 2 Lecture
competition Oligopoly
15 Discussion Interaction
05 Summary

Session Number: 41
Session Outcome: After this session, the student will be able to analyze the National income definition, components and
concepts.
Time(min) Topic BTL Teaching Learning Method
05 Recap
 20 National income definition, components and concepts 2 Lecture
15 DISCUSSION Interaction
05 Summary

Session Number: 42
Session Outcome: After this session, the student will be able to analyze the Measurement of national income.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Measurement of national income 2 Lecture
15 DISCUSSION Interaction
05 Summary

Session Number: 43
Session Outcome: After this session, the student will be able to analyze the Uses and difficulties in measuring national
income.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Uses and difficulties in measuring national income 2 Lecture
15 DISCUSSION Interaction
05 Summary

Session Number: 44
Session Outcome: After this session, the student will be able to analyze the Trade Cycles Phases.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Trade Cycles Phases 2 Lecture
15 DISCUSSION Interaction
05 Summary

Session Number: 45
Session Outcome: After this session, the student will be able to analyze the Inflation-Types, effect and remedial
measures.
Time(min) Topic BTL Teaching Learning Method
05 Recap
20 Inflation-Types, effect and remedial measures 2 Lecture
15 DISCUSSION Interaction
05 Summary

EVALUATION PLAN:

Evaluation
Weightag Duration
Compone Date CO 1 CO 2 CO 3 CO 4
e/Marks (Hours)
nt
 COI Numb
1 2 3 1 2 3 1 2 3 1 2 3
er
BTL 1 1 1 1 1 2 1 1 1 1 2 2
Weightag
3 3 4
e (10%)
Test 1 Max 90 mins
Marks 6 6 8
(20)
Weightag
3 3 4
e (10%)
Test 2 Max 90 mins
Marks 6 6 8
(20)
Weightag
3 3 4
e (10%)
Test 3 Max 90 mins
Marks 6 6 8
(10)
Weightag
e (15%)
Active
Max Active Learning
Learning
Marks
(15)
Weightag
Attendanc e (5%)
Attendance
e Max
Marks (5)
Weightag 4% 4 4% 4% 4 8
2% 2% 4% 2% 4% 8%
e (50%) % % %
180 mins
Semester Max
2 4 4 2 4 4 2 4 4 4 8 8
End Exam Marks(50)
Question 2- 2- 2- 2-
1 8 1 8 1 8 1 8
Number 7 7 7 7

Course Team members, Chamber Consultation Hours and Chamber Venue details:

S.No. Name of Faculty Chamber Chamber Chamber Signature of

Consultation Consultation Consultation Course faculty
Day(s) Timings for Room No:
each day

1. Dr. V. V. Madhav Saturday 3 PM to 4PM C104

 Dr. Subash Dhone Saturday 10 AM to 11 Staff Cabin, 4th
2. AM floor

Signature of COURSE COORDINATOR:

Recommended by HEAD OF DEPARTMENT:

Approved By: DEAN-ACADEMICS

(Sign with Office Seal)