Managerial Economics

obligatory courses

Managerial Economics is concerned with the application of economic principles and methodologies to key management decisions within organizations. It provides principles to foster goals of the organization, as well as a better understanding of the external business environment in which an organization operates. Managerial Economics is fundamentally a unique way of thinking about problems, issues and decisions that managers face in each of the functional areas of the organization as well as the strategic ones faced by general managers.

1. The conncept of managerial economics. Stages in the proces of making optimal decisions.

2. Making optimal decisions under conditions of certainty (managerial analysis, costs taken into account in economic analysis, maximization of a function of two variables, optimization in the presence of constraints – the method of Lagrange multipliers).

3. Price elasticity of demand. Price mark up on costs.

4. Market structures. Indicators measuring the degree of market concentration. Duopol models: Cournot, Bertrand, Edgeworth, Chamberlin, von Stackleberg.

5. Advanced pricing strategies first-degree price discrimination, second-degree price discrimination, third-degree price discrimination, interm price discrimination, price based on average cost, price leadership).

6. Decision-making under risk conditions (expected value EV, expected utility EU, decision-making by assurers, risk-takers and risk-neutral people).

Obligatory reading:

Samuelson W.F., Marks S.G. (2009), Ekonomia menedżerska, PWE, Warszawa.

Zalega T. (2016), Mikroekonomia, Wydawnictwo Wydziału Zarządzania UW, Warszawa.

Supplementary reading:

Griffith A., Wall S. (2008), Economics for business and management, Prentice Hall, Cambridge.

Wilkinson N. (2005), Managerial Economics. A Problem-Solving Approach, Cambridge University Press, New York.

In terms of knowledge:

• Knows and understands the research methodology and terminology in the discipline of economics (K_W01)

• Has advanced knowledge and understanding of the economic theories and models regarding the functioning of organizations (K_W03)

• Has advanced knowledge and understanding of economic processes and phenomena and their impact on financial decisions in organizations, the functioning of organizations, in particular as regards economic activities (K_W05)

• Has advanced knowledge and understanding of the principles of creating and developing various forms of entrepreneurship (K_W06)

In terms of skills:

• Can use the economic theory to recognize, diagnose and solve problems related to the functioning of organizations on the market (K_U01)

• Can correctly interpret economic processes and phenomena and their impact on the functioning of organizations (K_U02)

• Can plan and organize their own and team work (K_U05)

• Can self-educate and improve the acquired qualifications (K_U06)

In terms of attitudes:

• Is ready to assess and critically approach situations and phenomena related to the functioning of organizations on the market (K_K01)

• Is ready to think and act in an entrepreneurial manner (K_K02)

Is ready to comply with professional ethical standards for economic activities (K_K03)

A written exam must by passed by the student to get credit for the course on managerial economics. The prerequisite for students to take the final exam is a positive grade received for the classes. All students failing the exam or unable to take it for the lack of credited classes can sit for it during the retake session in September.

Exam structure:

1) narrative questions,

2) algebra and graphics assignments.