Economics for Decision Making
2 Credits
BU.220.620.xx
Class Day/Time & Start/End date
Semester
Class Location
Instructor
Full Name
Contact Information
Phone Number: (###) ###-####
E-mail Address:
Office Hours
Day/s
Times
Required Text and Learning Materials
1) Textbook: Robert Pindyck and Daniel Rubinfeld, Microeconomics, 8th Edition, 2012.
2) Instructor’s lecture notes/slides (to be posted on Blackboard).
3) Additional readings and materials will be posted on Blackboard; the instructor will specify which of
these materials will be required and which optional.
Blackboard Site
A Blackboard course site is set up for this course. Each student is expected to check the site throughout the
semester as Blackboard will be the primary venue for outside classroom communications between the
instructors and the students. Students can access the course site at https://blackboard.jhu.edu. Support for
Blackboard is available at 1-866-669-6138.
Course Evaluation
As a research and learning community, the Carey Business School is committed to continuous improvement.
The faculty strongly encourages students to provide complete and honest feedback for this course. Please
take this activity seriously because we depend on your feedback to help us improve so you and your
colleagues will benefit. Information on how to complete the evaluation will be provided towards the end of the
course.
Disability Services
Johns Hopkins University and the Carey Business School are committed to making all academic programs,
support services, and facilities accessible. To determine eligibility for accommodations, please contact the
Carey Disability Services Office at time of admission and allow at least four weeks prior to the beginning of the
first class meeting. Students should contact Rachel Pickett in the Disability Services office by phone at 410234-9243, by fax at 443-529-1552, or email: [email protected].
Important Academic Policies and Services
 Honor Code
 Statement of Diversity and Inclusion
 Student Success Center
 Inclement Weather Policy
Students are strongly encouraged to consult the Johns Hopkins Carey Business School Student Handbook
and Academic Catalog and the School website http://carey.jhu.edu/students/student-resources/university-andschool-policies/ for detailed information regarding the above items.
BU.220.620.XX – Economics for Decision Making – Instructor’s Name – Page 2 of 5
Course Description
This is a microeconomics course with emphasis on the application of economic principles and methodologies
to private and managerial decision problems. Major topics include consumer choice and market demand, costs
and profit maximization, market structures, output/price decisions, and strategic interactions.
Prerequisite(s): BU.510.601 or BU.790.616 or BE.790.616 or BU.790.003 or BU.755.616 or BE.790.003 or
BE.755.616
Course Overview
The primary goal of this course is to develop the abilities of students to apply fundamental microeconomics
principles and methodologies to a range of private and managerial decisions. Students will also be introduced
to more advanced topics in microeconomics. In fact, another major objective of the course is to equip students
with background concepts and tools for more specialized courses in economics and other business disciplines
including marketing, finance, strategy, and operations.
Below is a (tentative) list of course topics:
1. Individual and Market Demand
-Decision making on the margin
-Consumer Surplus
-Demand determinants
-Elasticity (calculation and determinants, own-price, cross-price, income elasticity)
-Demand estimation
-Revenue maximization
2. Costs and Profit Maximization
-Cost concepts (opportunity cost, sunk cost; total cost, fixed cost, variable cost, average cost, marginal cost)
-Relationship between cost curves
-Profit maximization for a firm facing a downward sloping demand curve
-Difference between short-run (operating horizon) and long run (investment/planning horizon)
-Economies of scale; Economies of scope
3. Competitive Supply and Market Analysis
-Perfect competition
-Firm's demand under perfect competition
-Profit maximization of price takers
-Short-run and long-run supply curves
-Market equilibrium in the short run and the long run; market dynamics
-Efficiency of competitive markets
-Tax incidence analysis
-Externalities & price controls
4: Strategy and Game Theory
-Basics of Game Theory
-Nash Equilibrium (NE)
-Simultaneous Games & Sequential Games
-Prisoner’s Dilemma
-Coordination Games
-Cournot duopoly; Stackelberg duopoly; Bertrand duopoly
-Repeated interactions
-Prisoner’s dilemma with repeated interactions
-Commitment, credible threats and promises
-Collusion
BU.220.620.XX – Economics for Decision Making – Instructor’s Name – Page 3 of 5
5: Pricing with Market Power
-First Degree Price Discrimination
-Second Degree Price Discrimination (block pricing, two-part tariffs)
-Third Degree Price Discrimination (market segmentation)
-Bundling and Tying
Student Learning Objectives for This Course
All Carey graduates are expected to demonstrate competence on four Learning Goals, operationalized
in eight Learning Objectives. These learning goals and objectives are supported by the courses Carey
offers. For a complete list of Carey learning goals and objectives, please refer to the website
http://carey.jhu.edu/faculty-research/learning-at-carey/learning-assessment.
The learning objectives for this course are:
1. Students will understand the determinants and characteristics of consumer-level and marketlevel demand, and of firm-level and market-level supply.
2. Students will understand the concepts of perfect competition and market equilibrium.
3. Students will learn how to use microeconomics tools to understand and predict the short-run
and long-run effects of demand and supply shocks on the market equilibrium (price, quantity,
number of firms operating in the industry, profits, consumer surplus and overall welfare).
4. Students will learn how to adapt managerial strategies to different industry and informational
structures, and strategic scenarios.
5. Students will learn how to use tools from microeconomics to understand and predict the
effects of government regulations on business and general welfare.
6. Students will recognize the implications of alternative pricing schemes for firm profits,
consumer surplus and overall welfare.
Attendance Policy
Students are responsible for all topics and concepts specifically covered during the class sessions. Therefore,
students should make every effort to attend all scheduled class sessions. You should be aware that failure to
attend class might impact your ability to achieve the objectives of the course. When you miss a class session,
you are responsible for obtaining class handouts and information given out during your absence. Even if you
miss class, you must turn in your assignments on time unless otherwise previously arranged with the
instructor. Students are expected to arrive to class on time and stay for the full duration of the lecture. While in
class, students should turn off their cell phones and be sure that all computer use is course-related.
Assignments
All students are expected to view the Carey Business School Honor Code/Code of Conduct tutorial and submit
their pledge online. Students who fail to complete and submit the pledge will have a registrar’s hold on their
account. Please contact the student services office via email [email protected] if you have any
questions.
Students are not allowed to use any electronic devices during in-class tests. Calculators will be provided if the
instructor requires them for test taking. Students must seek permission from the instructor to leave the
classroom during an in-class test. Test scripts must not be removed from the classroom during the test.
Homework Assignments
Students will be given three homework assignments. The assignments will be handed out in class in weeks 1,
4, and 6, and they will be due at the beginning of class in weeks 2, 5, and 7, respectively. Students may work
in teams on the assignments. There is no minimum team size (i.e., you can work individually if you prefer), but
the maximum team size is 5 (five). Each team will submit one answer and each team member will earn the
same grade. The names of the team members must be clearly indicated on the front page of the assignment.
Individual members of each team are expected to completely understand and agree with the answers
submitted. If you fail to submit an assignment by the deadline, you will receive zero points.
BU.220.620.XX – Economics for Decision Making – Instructor’s Name – Page 4 of 5
In-class Quizzes
Students will be given two in-class quizzes, in weeks 3 and 6. Each quiz will be about 30 minutes long, and it
will cover all the material covered in class in the previous weeks. The exam will be a blend of multiple-choice
and short-answer questions. The format will be closed-book, closed-notes. Calculators will be provided. A
maximum of one quiz can be missed. If a quiz is missed, its weight (15%) will be put on the final exam. Note: a
quiz may not be “missed” once it is taken.
In-class Final Exam
There will be an in-class 3-hour final exam. The exam is cumulative, in that it will cover all topics covered in
class in the course. The exam will be a blend of multiple-choice, short-answer questions and longer problems.
The format will be closed book, closed-notes. Calculators will be provided. A make-up exam will be given only
in case of valid and documented excuses. See the class schedule below for important dates and deadlines.
Evaluation and Grading
Assignment
3 Homework assignments
2 Quizzes
1 Final Exam
Total
Learning Objectives
1-6
1-6
1-6
Weight
7% each
15% each
49%
100%
Important Notes about Grading Policy:
The grade of A is reserved for those who demonstrate extraordinarily excellent performance. The grade of
A- is awarded only for excellent performance. The grade for good performance in this course is a B+/B. The
grades of D+, D, and D- are not awarded at the graduate level.
Please refer to the Carey Business School Student Handbook for grade appeal information
http://carey.jhu.edu/students/student-handbook-and-academic-catalog/
Tentative Course Calendar*
*The instructors reserve the right to alter course content and/or adjust the pace to accommodate class
progress. Students are responsible for keeping up with all adjustments to the course calendar.
Week
1
Content
0. Preliminaries
1. Individual and Market Demand
2
1. Individual and Market Demand
(cont’d)
3
2. Costs and Profit Maximization
4
2. Costs and Profit Maximization
(cont’d)
3. Competitive Supply and Market
Analysis
5
3. Competitive Supply and Market
Analysis (cont’d)
4. Strategy and Game Theory
6
4. Strategy and Game Theory
7
5.Pricing with Market Power
8
Reading
For content 0: Lecture Slides 0; Ch. 1.
For content 1: Lecture Slides 1; Ch.2,
Ch.4, Ch.8.
For content 1: Lecture Slides 1; Ch.2,
Ch.4, Ch.8.
For content 2: Lecture Slides 2; Ch.7,
Ch.8, Ch.9.
For content 2: Lecture Slides 2; Ch.7,
Ch.8, Ch.9
For content 3: Lecture Slides 3; Ch.2,
Ch.8, Ch.9, Ch.18.
For content 3: Lecture Slides 3; Ch.2,
Ch.8, Ch.9 , Ch.18.
For content 4: Lecture Slides 4;
Ch.12 , Ch.13.
For content 4: Lecture Slides 4;
Ch.12 , Ch.13.
For content 5: Lecture Slides 5;
Ch.11.
Due
HW1 handed out
HW1 due in class
In-class Quiz 1
HW2 handed out
HW2 due in class
In-class Quiz 2
HW3 handed out
HW3 due in class
Final exam
Lecture Slides indicates the instructor’s lecture notes/slides (to be posted on Blackboard). Ch.# denotes textbook chapters (Robert
Pindyck and Daniel Rubinfeld, Microeconomics, 8th Edition).
BU.220.620.XX – Economics for Decision Making – Instructor’s Name – Page 5 of 5
Copyright Statement
Unless explicitly allowed by the instructor, course materials, class discussions, and examinations are created
for and expected to be used by class participants only. The recording and rebroadcasting of such material, by
any means, is forbidden. Violations are subject to sanctions under the Honor Code.