Faculty of Business: Finance and Economics
Credit points: 8 cp

Subject level: Postgraduate

Result Type: Grade and marks

Requisite(s): 25841 Decision Making Tools
There are also course requisites for this subject. See access conditions.

Handbook description

This subject introduces the theory of the firm and other major economic themes that provide students with an understanding of managerial decision making. It outlines the economic forces that influence corporate strategy, enabling participants to acquire a range of skills and expertise expected of corporate managers. The outcomes are achieved using learning strategies that foster the application of leading-edge practices to meet the business challenges arising from international forces, and technical and knowledge innovation.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. Apply the principles of economics within a managerial decision-making process.
2. Gain a capacity to analyse a business and apply techniques of economic analysis when making business decisions.
3. Gain an understanding of the economic environment of business and a capacity to identify and manage the risks posed by unanticipated movements in key economic variables.
4. Develop advanced conceptual skills in value chain management through leading-edge knowledge of economics in order to analyse problems and assist in the decision making in complex and unpredictable business environments.

Contribution to graduate profile

The subject aims to develop an understanding of economic principles and to enhance skills in high-level problem solving and critical thinking. Managerial Economics is the study of how to manage scarce business resources in order to most efficiently contribute to the achievement of the goals of management. The subject provides models for business analysis and ways to predict the outcomes of managerial decisions. It complements the accounting perspective and provides a basis for understanding finance, marketing and business strategy.

Teaching and learning strategies

The subject uses lectures, workshop discussion, exercises and case studies to allow participants to build their understanding of the economics of the firm and their analytical capabilities in modelling managerial decisions. These methods will be supplemented with both printed and electronic learning materials and resources. The UTS web-based communication tool (UTSOnline) will be used to share information and encourage interaction between staff and students.

Content

• The fundamentals of managerial economics including supply and demand
• Quantitative demand analysis
• Modelling individual economic behaviour
• Productivity and cost analysis
• The organisation of the firm and the nature of industry
• Models of competition, monopoly, monopolistic competition and oligopoly
• Pricing strategies for firms with market power
• Government in the market place
• The importance of macroeconomics for managerial decision making

Assessment

Mid-semester Exam (Individual)	25%
Tests objectives 1 and 3.
Case Study (Individual)	25%
Tests objectives 3 and 4.
Final Examination (Individual)	50%
Tests objectives 1-4.

To pass the subject, students must achieve at least 50% of the marks allocated to the assessment tasks.

Recommended text(s)

Baye, M.R. (2006) Managerial Economics and Business Strategy, 5th edition, McGraw Hill

Indicative references

Hirschey, M. (2006) Fundamentals of Managerial Economics, 11th edition, Thomson South-Western

Keat, P.G. and Young, P.K.Y. (2005) Managerial Economics: Economic Tools for Today's Decision Makers, 5th edition, Prentice-Hall

Pindyck, R.S, and Rubinfeld, D.L (2004) Microeconomics, 6th edition, Prentice Hall