Econ 4310: Managerial Economics

Fall 2005
Professor: Christian Rojas Phone:
Office: Email: crojas@vt.edu
Office Hours: W, 1:45 – 3:45 pm

Class Objectives: Provide students with the most important tools from microeconomics,
game theory and industrial organization to make sensible managerial decisions. We will
use several analysis techniques, including diagrams and calculus. Students will be able to
analyze and solve a variety of real world problems from a manager’s perspective.

Prerequisites: You can only enroll in this class if you have completed ECO 3304,
Techniques for Economic Research and ECO 3310, Intermediate Microeconomic Theory.

Course Materials:

• Michael Baye, Managerial Economics and Business Strategy, 5th edition.

• Colored pens or pencils, a straightedge, and possibly graph paper: you will need
these to complete your homework and for taking class notes.

Requirements and Grading:

Exams and Homework : I will give one midterm and a cumulative final exam. The
midterm will be held in class on October 5. I will announce one week before the date of
each midterm what topics will be covered on the exam. The final exam is cumulative.

Midterm Examination 35%

Final Examination 45%
Homework 20%

Homework assignments call for you to solve problems and prepare written answers. All
homework is due in at the beginning of class on the day it is due. You may work in
groups on your homework, but you must each turn in an individual paper. I will provide
answer sheets for the homework via the www. I will assign homework every week.

I will not accept late homework. I will allow each of you to miss one homework
assignment without penalty.

Academic Conduct: You may obtain tutoring for this course, and you may work on
homework together. All students are expected to comply with the honor code. You are
further charged with reporting any suspected honor code violations by other students in
the course. For specifics on the honor code see the University’s webpage.

Class and Exam Absences: Class attendance is expected. I will not be taking regular
attendance. If you miss class and need notes, contact another student in the class for
assistance. The only acceptable reasons for missing an exam are illness and family
emergency. You must notify me BEFORE the exam begins; my email is available 24/7. I
will require evidence of the illness or family emergency; a doctor’s note, an obituary for
family funerals, etc. I will give you a make-up exam.

Hints for a Successful Semester

Students come to my office hours and say "I understand everything you say in class so I
know the material. Why did I get such a bad grade on the midterm?" The answer is
simple; the class objective is for you to learn how to analyze managerial economics
problems, not for you to be able to understand someone else's analysis. Economics almost
always sounds simple when someone who understands it explains it to you -- the trick is
to be able to explain it on your own.

Here are suggestions for how to succeed in this class:

(1) Come to class. This is perhaps the most important thing. Class starts on time.

(2) Take good notes. This class will involve lots of diagrams; you will see me drawing
diagrams with colors. Your notes should include big diagrams – because it’s much easier
to get the diagram correct if you have lots of space to work in. And you too should use
color to make your notes more clear.

(3) Ask questions. If something does not make sense, get an answer: you can ask me in
class, you can ask me after class, you can ask me during office hours. I'm also happy to
answer questions via email, but the nature of the class material usually means a face-to-
face visit is more useful.

(4) Study and do your homework in groups. Take turns explaining the material to each
other. If your explanation does not make sense to others, there is a good chance you do
not understand the material yourself.

(5) Always do the reading and the assigned problems before class. Come prepared to ask
questions if something is unclear.

(6) Focus your energy on learning how to solve problems. I will tell you in class when
you need to memorize a definition of concept. People who try to study by going over and
over the textbook do not succeed. This class focuses on applying concepts and analyzing
problems, not on repeating memorized terms and concepts.

(7) People who learn to do the homework generally do well on the exams.

(8) The best way to waste your study time is to look at the homework and the problems at
the same time. This study strategy promotes memorizing the answers – every time you
get stuck you just look at the answer sheet without trying to solve the problem on your
own. Memorizing economics answer sheets is like memorizing the answers to a
crossword puzzle to help you work anothe r one – pointless.
(10) Do all the homework as it is assigned -- don't cram for the test.