Managerial economics, 7.5 Credits

Contents

This course aims to introduce students to the fundamental principles of managerial economics and provide them with an understanding of how economic concepts can be applied to real-world business decisions. The course includes basic economic concepts related to firm production, cost structures and objectives, as well as an in-dept analysis of firm behavior under competition and monopoly and the implication for societal welfare.

Firms with market power can use the price instrument to pursue their objectives. Different forms of price discrimination, as well as bundling multiple goods into packages and the use of time dependent pricing schemes, are analyzed. An introduction to decision making in oligopoly markets is provided to gain a basic understanding of strategic competitive behavior.

Firms act under incomplete knowledge of future events. As a consequence, firms must make decisions under uncertainty. The analyses of decision making by firms and individuals are extended to include uncertainty. Central concepts related to risk attitude, the consequences of risk-attitude for decision making, and strategies to avoid or eliminate risk, are studied.

While the focus is on intuition and graphical explanations of microeconomic concepts and models, the course also contains mathematical analysis. The goal is to equip students with the tools and strategic thinking skills necessary for effective decision-making in a dynamic business environment.

Expected learning outcomes

Having completed the course the student is expected to be able to:

Knowledge and understanding

• Demonstrate knowledge of basic microeconomic concepts related to the firm 
• Describe different market structures and their characteristics
• Explain different pricing strategies used by firms with market power
• Describe the basic microeconomic concepts related to uncertainty and explain how uncertainty influences economic decision making

Competence and skills

• Apply economic concepts and theories to real-world business problems
• Show strategic thinking skills through the use of business strategies
• Communicate central concepts for the course in English, both orally and in writing

Judgement and approach

• Analyze the impact of uncertainty on business practice
• Critically assess the impact of market power and the use of business strategies on social welfare

Required Knowledge

Form of instruction

The learning is supported by lectures, literature, and discussions in seminar format.

Examination modes

The examination consists of an individual written hall exam and a seminar. The seminar result is only valid during the current semester.

The following grading scale will be used for the course: Pass with Distinction (Väl Godkänd, VG), Pass (Godkänd, G) and Fail (Underkänd, U).

A student who does not pass the first examination will be offered an opportunity to sit a re- examination within two months. An additional examination opportunity is normally offered every academic year, one week prior to the start of the autumn term. If required by specific circumstances, other forms of examination may be used.

A student that has failed an examination on two occasions has a right to have another examiner or grading teacher appointed, unless there are special reasons against it. A written request addressed to the Director of Studies should be made no later than two weeks before the next examination opportunity. A written request should be submitted to the Director of Studies no later than two weeks before the next examination opportunity.

Exceptions from examination form as stated in the syllabus can be made for a student who has a decision on pedagogical support for disabilities. Individual adaptations of the examination form should be considered based on the student's needs. The examination form shall be adapted within the framework of the expected learning outcomes stated in the course syllabus. At the request of the student, the course responsible teacher, in consultation with the examiner, must promptly decide on the adapted examination form. The decision must then be notified to the student.

Academic integrity and cheating

As a student, you are expected to act with academic integrity. This means writing and presenting within the limits of the academic rules and expectations communicated in the university's regulations and what is otherwise specified by the responsible department. Disciplinary action may be taken against students who uses unauthorized help aids or in some other way tries to mislead on a test or when another type of task is being evaluated. Rules and regulations concerning the production of academic texts and correct referencing will be applicable to written assignments. Submitted material may be subject to plagiarism control. In addition, Umeå University rules and regulations for education and research apply.