BA 380S Managerial Economics (EMBA) ­ Spring 2017 Professor
Office
Website
Email
John Thompson
CBA 6.312
Hours
Mon & Wed 9:30a ‐ 11:00a
or by appointment via Canvas
Phone
512.232.6830
[email protected] Course O
bjectives Managerial e conomics i s a n i mportant c omponent o
f t he M
BA p
rogram. I ts f ocus o
n how i ndividuals m
ake o
pmal d
ecisions i n d
ifferent c ircumstances u
nderpins m
uch o
f b
oth t he core a nd e lecve c urriculum. T he o
bjecve o
f t his c ourse i s t o g ive y ou i nsight i nto v arious economic c oncepts t hat w
ill m
ake y ou m
ore e ffecve a s a d
ecision m
aker i n a b
usiness c ontext. These c oncepts i nclude h
ow m
arkets f uncon, u
nderstanding t he d
emand f or y our p
roduct, t he strategic b
ehavior o
f fi
rms w
ith m
arket p
ower, a nd v arious m
acroeconomic c oncepts s uch a s GDP, i nflaon, i nterest r ates, a nd g overnment p
olicy. Much o
f t he m
aterial i n t his c lass i s i ntuive, b
ut s ome i s n
ot. T he f ramework w
ill b
e both g eneral a nd a pplied i n o
rder t o i llustrate c ore c oncepts w
ith b
road a pplicability a nd specific e xamples o
f h
ow t hose c oncepts m
ight b
e a pplied i n a b
usiness c ontext. The fi
rst p
art o
f t he c ourse e xamines h
ow e fficient c ompeve m
arkets f uncon. W
e will c over t he b
asics o
f s upply a nd d
emand, a nd t hen w
ill f ocus o
n d
emand a nd d
emand esmaon f rom r egression. T he s econd p
art o
f t he c ourse e xamines t he d
ecision m
aking process w
hen, f or v arious r easons, a fi
rm h
as m
arket p
ower. T his r efers t o a ll s ituaons w
here an i ndividual fi
rm h
as a d
irect i nfluence o
n t he m
arket p
rice o
f t he p
roduct. W
e w
ill d
iscuss opmal d
ecision m
aking i n t erms o
f p
ricing a nd o
utput, a nd w
ill d
evelop a t ool k nown a s “ game theory” t o u
nderstand o
pmal s trategy i n a n
umber o
f d
imensions. W
e w
ill a lso t ouch o
n t he praccal c onsideraons o
f a ntrust p
olicy. T he l ast p
art o
f t he c ourse w
ill f ocus o
n t he v arious macroeconomic c oncepts t hat a n e ffecve m
anager w
ould b
e e xpected t o u
nderstand a nd b
e able t o i ncorporate i nto o
pmal d
ecision m
aking f or t he fi
rm. Course M
aterials We h
ave a b
asic t extbook w
hich c overs m
uch o
f t he m
icroeconomic c oncepts i n t his class. T his i s t he o
nly t hing y ou w
ill n
eed t o p
urchase. T he r est o
f t he m
aterial w
ill b
e m
ade available t o y ou v ia C
anvas. ❖ Froeb, M
cCann, W
ard a nd S hor, M
anagerial E conomics: A
P
roblem S olving A
pproach (3e), C
engage L earning ( 2014), I SBN‐13: 9
781133951483. Course G
rading Your g rade i n t his c lass w
ill b
e b
ased o
n t he f ollowing c omponents: Midterm E xam # 1
25% (80 p
oints) Midterm E xam # 2
25% (80 p
oints) Final E xam 30% (100 p
oints) The m
idterm e xams w
ill o
nly c over t he m
aterial f rom t hat p
art o
f t he c lass. T he fi
nal exam w
ill c over m
ostly n
ew m
aterial s ince t he s econd e xam, b
ut m
ay h
ave a l i腖�le comprehensive m
aterial f rom e arlier i n t he c lass. W
e w
ill d
iscuss t he d
etails o
f t hese e xams a s well a s t he c lass p
roject a s w
e p
rogress t hrough t he s emester a nd g et c loser t o t he v arious assessment d
ates. My t arget f or t he fi
nal g rade d
istribuon i s b
ased o
n t he s tandard M
BA d
istribuon a s follows: A
(4.00) 2
5% A–
(3.67) 2
0% B+
(3.33) 1
5% B
(3.00) 3
5% B– o
r l ower 5
% This d
istribuon i s a t arget, n
ot a g uarantee. G
rades l ower t han B
– w
ill b
e g iven i f warranted. A
lso n
ote t hat g rades m
ay b
e a djusted d
ownward b
ased o
n v iolaons o
f t he Professionalism P
olicy o
r t he H
onor C
ode, b
oth o
f w
hich a re d
escribed b
elow. Preparation f or C
lass All I a sk i s t hat y ou c ome t o c lass e ach d
ay w
ith a n o
pen m
ind, a s olid w
ork e thic, a nd a n eagerness t o l earn. I f t here i s a p
arcular r eading o
r c urrent i ssue I w
ant t o d
iscuss w
ith y ou i n class, I w
ill d
o m
y b
est t o n
ofy y ou a head o
f 
me. Q
uesons, c omments a nd d
iscussion a bout relevant t opics a nd a pplicaons a re a lways w
elcome, 
me p
ermi弶�ng. I s trongly e ncourage y ou to b
e d
iligent a
bout t aking n
otes i n c lass , a s t he t opics w
e c over i n c lass w
ill f orm t he u
niverse of i nformaon f rom w
hich e xam q
uesons a re d
rawn. Key D
ates ❖ Saturday, F ebruary 1
8 ( 8:00a)
Semester E xam # 1 ( Midterm) ❖ Saturday, A
pril 1
( 8:00a)
Semester E xam # 2 ( Midterm) ❖ Saturday, A
pril 1
5 ( 8:00a)
Semester E xam # 3 ( Final) Relevant P
olicies I e xpect y ou t o c omply w
ith t he P
rofessionalism P
olicy a nd y ou s hould e xpect m
e t o comply w
ith i t. I fi
rmly b
elieve t hat p
rofessional b
ehavior ( being o
n 
me, s taying f or t he f ull class, l aptops f or c lass m
aterial o
nly) i s c rucial t o a c ulture o
f l earning. McCombs C
lassroom P
rofessionalism P
olicy The h
ighest p
rofessional s tandards a re e xpected o
f a ll m
embers o
f t he M
cCombs community. T he c ollecve c lass r eputaon a nd t he v alue o
f t he T exas M
BA e xperience h
inges o
n this. Y ou s hould t reat t he T exas M
BA c lassroom a s y ou w
ould a c orporate b
oardroom. Faculty a re e xpected t o b
e p
rofessional a nd p
repared t o d
eliver v alue f or e ach a nd e very class s ession. S tudents a re e xpected t o b
e p
rofessional i n a ll r espects. T he T exas M
BA classroom e xperience i s e nhanced w
hen: ● Students a rrive o
n 
me . O
n 
me a rrival e nsures t hat c lasses a re a ble t o s tart a nd fi
nish at t he s cheduled 
me. O
n 
me a rrival s hows r espect f or b
oth f ellow s tudents a nd faculty a nd i t e nhances l earning b
y r educing a voidable d
istracons. ● Students d
isplay t heir n
ame c ards . T his p
ermits f ellow s tudents a nd f aculty t o l earn names, e nhancing o
pportunies f or c ommunity b
uilding a nd e valuaon o
f i n‐class contribuons. ● Students a re f ully p
repared f or e ach c lass . M
uch o
f t he l earning i n t he T exas M
BA program t akes p
lace d
uring c lassroom d
iscussions. W
hen s tudents a re n
ot p
repared, they c annot c ontribute t o t he o
verall l earning p
rocess. T his a ffects n
ot o
nly t he individual, b
ut t heir p
eers w
ho c ount o
n t hem, a s w
ell. ● Students r espect t he v iews a nd o
pinions o
f t heir c olleagues . D
isagreement a nd d
ebate are e ncouraged. I ntolerance f or t he v iews o
f o
thers i s u
nacceptable. ● Students m
inimize u
nscheduled p
ersonal b
reaks . T he l earning e nvironment i mproves when d
isrupons a re l imited. ● Technology i s u
sed t o e nhance t he c lass e xperience . W
hen s tudents a re s urfing t he w
eb, responding t o e mail, i nstant m
essaging e ach o
ther, a nd o
therwise n
ot d
evong t heir f ull a腖�enon t o t he t opic a t h
and t hey a re d
oing t hemselves a nd t heir p
eers a m
ajor disservice. T hose a round t hem f ace a ddional d
istracon. F ellow s tudents c annot benefit f rom t he i nsights o
f t he s tudents w
ho a re n
ot e ngaged. S tudents w
ith r eal n
eeds may n
ot b
e a ble t o o
btain a dequate h
elp d
uring o
ffice h
ours i f f aculty 
me i s s pent repeang w
hat w
as s aid i n c lass. T here a re o
㟻en c ases w
here l earning i s e nhanced b
y the u
se o
f t echnology i n c lass. F aculty w
ill l et y ou k now w
hen i t i s a ppropriate. ● Phones a nd w
ireless d
evices a re s ilenced . W
e’ve a ll h
eard t he a nnoying r inging i n t he middle o
f a m
eeng. N
ot o
nly i s i t n
ot p
rofessional, i t c uts o
ff t he fl
ow o
f d
iscussion when t he s earch f or t he o
ffender b
egins. W
hen a t rue n
eed t o c ommunicate w
ith someone o
utside o
f c lass e xists ( e.g., f or s ome m
edical n
eed) p
lease i nform t he professor p
rior t o c lass. R
emember, y ou a re c ompeng f or t he b
est f aculty M
cCombs has t o o
ffer. Y our p
rofessionalism a nd a cvity i n c lass c ontributes t o y our s uccess i n a腖�racng t he b
est f aculty t o t his p
rogram. Students w
ith D
isabilities Upon r equest, t he U
niversity o
f T exas a t A
usn p
rovides a ppropriate a cademic accommodaons f or q
ualified s tudents w
ith d
isabilies. S ervices f or S tudents w
ith D
isabilies (SSD) i s h
oused i n t he O
ffice o
f t he D
ean o
f S tudents, l ocated o
n t he f ourth fl
oor o
f t he S tudent Services B
uilding. I nformaon o
n h
ow t o r egister, d
ownloadable f orms, i ncluding g uidelines f or documentaon, a ccommodaon r equest l e腖�ers, a nd r eleases o
f i nformaon a re a vailable online a t h
腖�p://ddce.utexas.edu/disability/forms‐and‐documents/ . P
lease d
o n
ot h
esitate t o contact S SD a t ( 512) 4
71‐6259, V
P: ( 512) 2
32‐2937 o
r v ia e mail i f y ou h
ave a ny q
uesons. Academic D
ishonesty I h
ave n
o t olerance f or a cts o
f a cademic d
ishonesty. S uch a cts d
amage t he r eputaon o
f the s chool a nd t he d
egree a nd d
emean t he h
onest e fforts o
f t he m
ajority o
f s tudents. T he minimum p
enalty f or a n a ct o
f a cademic d
ishonesty w
ill b
e a z ero f or t hat a ssignment o
r e xam. The r esponsibilies f or b
oth s tudents a nd f aculty w
ith r egard t o t he H
onor S ystem a re d
escribed on o
n t he fi
nal p
ages o
f t his s yllabus. I w
ill o
bserve a ll t he f aculty r esponsibilies d
escribed therein. A
s a T exas M
BA s tudent, y ou a gree t o o
bserve a ll o
f t he s tudent r esponsibilies o
f t he Honor C
ode. I f t he a pplicaon o
f t he H
onor S ystem t o t his c lass a nd i ts a ssignments i s u
nclear in a ny w
ay, i t i s y our r esponsibility t o a sk m
e f or c larificaon. Honor C
ode P
urpose Academic h
onor, t rust a nd i ntegrity a re f undamental t o T he U
niversity o
f T exas a t A
usn McCombs S chool o
f B
usiness c ommunity. T hey c ontribute d
irectly t o t he q
uality o
f y our educaon a nd r each f ar b
eyond t he c ampus t o y our o
verall s tanding w
ithin t he b
usiness community. T he U
niversity o
f T exas a t A
usn M
cCombs S chool o
f B
usiness H
onor S ystem promotes a cademic h
onor, t rust a nd i ntegrity t hroughout t he G
raduate S chool o
f B
usiness. T he Honor S ystem r elies u
pon T he U
niversity o
f T exas S tudent S tandards o
f C
onduct ( Chapter 1
1 o
f the I nstuonal R
ules o
n S tudent S ervice a nd A
cvies) f or e nforcement, b
ut p
romotes i deals that a re h
igher t han m
erely e nforceable s tandards. E very s tudent i s r esponsible f or understanding a nd a biding b
y t he p
rovisions o
f t he H
onor S ystem a nd t he U
niversity o
f T exas Student S tandards o
f C
onduct. T he U
niversity e xpects a ll s tudents t o o
bey t he l aw, s how respect f or o
ther m
embers o
f t he u
niversity c ommunity, p
erform c ontractual o
bligaons, maintain a bsolute i ntegrity a nd t he h
ighest s tandard o
f i ndividual h
onor i n s cholasc w
ork, a nd observe t he h
ighest s tandards o
f c onduct. I gnorance o
f t he H
onor S ystem o
r T he U
niversity o
f Texas S tudent S tandards o
f C
onduct i s n
ot a n a cceptable e xcuse f or v iolaons u
nder a ny circumstances. The e ffecveness o
f t he H
onor S ystem r esults s olely f rom t he w
holehearted a nd uncompromising s upport o
f e ach m
ember o
f t he G
raduate S chool o
f B
usiness c ommunity. E ach member m
ust a bide b
y t he H
onor S ystem a nd m
ust b
e i ntolerant o
f a ny v iolaons. T he s ystem is o
nly a s e ffecve a s y ou m
ake i t. The H
onor P
ledge The U
niversity o
f T exas a t A
usn M
cCombs S chool o
f B
usiness r equires e ach e nrolled student t o a dopt t he H
onor S ystem. T he H
onor P
ledge b
est d
escribes t he c onduct p
romoted b
y the H
onor S ystem. I t i s a s f ollows: “I a ffirm t hat I b
elong t o t he h
onorable c ommunity o
f T he U
niversity o
f T exas a t Ausn G
raduate S chool o
f B
usiness. I w
ill n
ot l ie, c heat o
r s teal, n
or w
ill I t olerate those w
ho d
o.” “I p
ledge m
y f ull s upport t o t he H
onor S ystem. I a gree t o b
e b
ound a t a ll 
mes b
y the H
onor S ystem a nd u
nderstand t hat a ny v iolaon m
ay r esult i n m
y d
ismissal from t he G
raduate S chool o
f B
usiness.” Faculty I nvolvement i n t he H
onor S ystem The U
niversity o
f T exas a t A
usn M
cCombs S chool o
f B
usiness F aculty's c ommitment t o the H
onor S ystem i s c rical t o i ts s uccess. I t i s i mperave t hat f aculty m
ake t heir e xpectaons clear t o a ll s tudents. T hey m
ust a lso r espond t o a ccusaons o
f c heang o
r o
ther m
isconduct b
y students i n a 
mely, d
iscreet a nd f air m
anner. W
e u
rge f aculty m
embers t o p
romote a wareness of t he i mportance o
f i ntegrity t hrough i n‐class d
iscussions a nd a ssignments t hroughout t he semester. Expectations U
nder t he H
onor S ystem Standards —
I f a s tudent i s u
ncertain a bout t he s tandards o
f c onduct i n a p
arcular se弶�ng, h
e o
r s he s hould a sk t he r elevant f aculty m
ember f or c larificaon t o e nsure h
is o
r h
er conduct f alls w
ithin t he e xpected s cope o
f h
onor, t rust a nd i ntegrity a s p
romoted b
y t he H
onor System. T his a pplies t o a ll t ests, p
apers a nd g roup a nd i ndividual w
ork. Q
uesons a bout appropriate b
ehavior d
uring t he j ob s earch s hould b
e a ddressed t o a p
rofessional m
ember o
f the C
areer S ervices O
ffice. B
elow a re s ome o
f t he s pecific e xamples o
f v iolaons o
f t he H
onor System. Lying —
L ying i s a ny d
eliberate a 腖�empt t o d
eceive a nother b
y s tang a n u
ntruth, o
r b
y any d
irect f orm o
f c ommunicaon t o i nclude t he t elling o
f a p
aral t ruth. L ying i ncludes t he u
se or o
mission o
f a ny i nformaon w
ith t he i ntent t o d
eceive o
r m
islead. E xamples o
f l ying i nclude, but a re n
ot l imited t o, p
roviding a f alse e xcuse f or w
hy a t est w
as m
issed o
r p
resenng f alse informaon t o a r ecruiter. Stealing —
S tealing i s w
rongfully t aking, o
btaining, w
ithholding, d
efacing o
r d
estroying any p
erson’s m
oney, p
ersonal p
roperty, a rcle o
r s ervice, u
nder a ny c ircumstances. E xamples o
f stealing i nclude, b
ut a re n
ot l imited t o, r emoving c ourse m
aterial f rom t he l ibrary o
r h
iding i t from o
thers, r emoving m
aterial f rom a nother p
erson's m
ail f older, s ecuring f or o
ne's s elf una腖�ended i tems s uch a s c alculators, b
ooks, b
ook b
ags o
r o
ther p
ersonal p
roperty. A
nother form o
f s tealing i s t he d
uplicaon o
f c opyrighted m
aterial b
eyond t he r easonable b
ounds o
f “fair u
se”. D
efacing ( e.g., “ marking u
p” o
r h
ighlighng) l ibrary b
ooks i s a lso c onsidered s tealing, because, t hrough a w
illful a ct, t he v alue o
f a nother’s p
roperty i s d
ecreased. ( See t he a ppendix for a d
etailed e xplanaon o
f “ fair u
se.”) Cheang —
C
heang i s w
rongfully a nd u
nfairly a cng o
ut o
f s elf‐interest f or p
ersonal gain b
y s eeking o
r a ccepng a n u
nauthorized a dvantage o
ver o
ne’s p
eers. E xamples i nclude, but a re n
ot l imited t o, o
btaining q
uesons o
r a nswers t o t ests o
r q
uizzes, a nd g e弶�ng a ssistance on c ase w
rite‐ups o
r o
ther p
rojects b
eyond w
hat i s a uthorized b
y t he a ssigning i nstructor. I t i s also c heang t o a ccept t he b
enefit(s) o
f a nother p
erson’s t he㟻(s) e ven i f n
ot a cvely s ought. For i nstance, i f o
ne c onnues t o b
e a 腖�enve t o a n o
verhead c onversaon a bout a t est o
r c ase write‐up e ven i f i nial e xposure t o s uch i nformaon w
as a ccidental a nd b
eyond t he c ontrol o
f the s tudent i nqueson, o
ne i s a lso c heang. I f a s tudent o
verhears a c onversaon o
r a ny informaon t hat a ny f aculty m
ember m
ight r easonably w
ish t o w
ithhold f rom t he s tudent, t he student s hould i nform t he f aculty m
ember(s) o
f t he i nformaon a nd c ircumstance u
nder w
hich it w
as o
verheard. Actions R
equired f or R
esponding t o S uspected a
nd K
nown V
iolations As s tated, e veryone m
ust a bide b
y t he H
onor S ystem a nd b
e i ntolerant o
f v iolaons. I f you s uspect a v iolaon h
as o
ccurred, y ou s hould fi
rst s peak t o t he s uspected v iolator i n a n a腖�empt t o d
etermine i f a n i nfracon h
as t aken p
lace. I f, a 㟻er d
oing s o, y ou s ll b
elieve t hat a violaon h
as o
ccurred, y ou m
ust t ell t he s uspected v iolator t hat h
e o
r s he m
ust r eport h
imself or h
erself t o t he c ourse p
rofessor o
r A
ssociate D
ean o
f t he G
raduate S chool o
f B
usiness. I f t he individual f ails t o r eport h
imself o
r h
erself w
ithin 4
8 h
ours, i t t hen b
ecomes y our o
bligaon t o report t he i nfracon t o t he c ourse p
rofessor o
r t he A
ssociate D
ean o
f t he G
raduate S chool o
f Business. R
emember t hat a lthough y ou a re n
ot r equired b
y r egulaon t o t ake a ny a con, o
ur Honor S ystem i s o
nly a s e ffecve a s y ou m
ake i t. I f y ou r emain s ilent w
hen y ou s uspect o
r k now of a v iolaon, y ou a re a pproving o
f s uch d
ishonorable c onduct a s t he c ommunity s tandard. Y ou are t hereby p
recipitang a r epeon o
f s uch v iolaons.