PUNJAB COLLEGE OF TECHNICAL EDUCATION

DEPARTMENT OF BUSINESS MANAGEMENT

Course: BBA
Subject Name: Managerial Economics
Subject Code: BBAGE 101-18
Semester: 1st
Credit: 4
Course Instructor: Ms. Amrit Kaur
Email Address: [email protected]

OVEARALLCOURSE OBJECTIVES
The primary objective of this course is to equip students with the necessary economic concepts, principles, theory and techniques and enhance
their managerial decision making to address business problems in a globalized economic environment

.COURSE OUTCOMES
After studying this Course, the Students will be able to:-

CO1: Understand the basic concepts of managerial economics and apply the economic way of thinking to individual decisions and business
decisions.

CO2: Measure price elasticity of demand, understand the determinants of elasticity and apply the concepts of price, cross and income elasticity of
demand.

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DEPARTMENT OF BUSINESS MANAGEMENT

CO3: Understand and estimate production function and Law of Diminishing Marginal Utility.

CO4: Understand and explain four basic market models of perfect competition, monopoly, monopolistic competition, and oligopoly, and how price
and quantity are determined in each model.

CO5: Understand the different costs of production and how they affect short and long run decisions.

SYLLABUS
Unit-I
Introduction to Managerial Economics: Managerial Economics: Meaning, Nature, Scope & Relationship with other disciplines, Role of
managerial economics in decision Making, Opportunity Cost Principle, Production Possibility Curve, Incremental Concept, Scarcity Concept.
Demand and the Firm: Demand and its Determination: Demand function; Determinants of demand; Demand elasticity – Price, Income and cross
elasticity. Use of elasticity for analyzing demand, Demand estimation, Demand forecasting, Demand forecasting of new product. Indifference
Curve Analysis: Meaning, Assumptions, Properties, Consumer Equilibrium, Importance of Indifference Analysis, Limitations of Indifference
Theory
Unit-II
Production Function: Production function Meaning, Concept of productivity and technology, Short Run and long run production function
Isoquants; Least cost combination of inputs, Producer’s equilibrium; Return to scale; Estimation of production function.
Theory of Cost: Cost Concepts and Determinants of cost, short run and long run cost theory, Modern Theory of Cost, Relationship between cost
and production function
Unit-III
Revenue Curve: Concept of Revenue, Different Types of Revenues, concept and shapes of Total Revenue, Average revenue and marginal revenue,
Relationship between Total Revenue, Average revenue and marginal revenue, Elasticity of Demand and Revenue relation

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Market Structure: Market Structure: Meaning, Assumptions and Equilibrium of Perfect Competition, Monopoly, Monopolistic Competition,
Oligopoly: Price and output determination under collusive oligopoly, Price and output determination under non-collusive oligopoly, Price
leadership model.
Unit-IV
Pricing: Pricing practices; Commodity Pricing: Economics of advertisement costs; Types of pricing practices.
Factor Pricing: Demand and supply of factor of production; Collective bargaining, Concept of rent, profit, interest- Rate of return and interest
rates; Real vs. Nominal interest rates. Basic capital theory–Interest rate and return on capital. Measurement of profit

Note: Relevant Case Studies will be discussed in class.

REFERENCE BOOKS
● K.K .Dewett, Modern Economic Theory, S. Chand Publication
● D.M. Mithani, Managerial Economics Theory and Applications, Himalaya Publication
● Peterson and Lewis, Managerial Economic, Prentice Hall of India
● Gupta, Managerial Economics, Tata McGraw Hills
● Geetika, Managerial Economics, Tata McGraw Hills
● D.N. Dwivedi, Managerial Economic, Vikas Publications
● Froeb, Managerial Economics, Cengage Learning
● Salvatore, Dominick, Managerial Economics, Oxford University
● GS Gupta, Managerial Economics

EVALUATION CRITERIA

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DEPARTMENT OF BUSINESS MANAGEMENT

PARAMETER MARKS WEIGHTAGE

Mid Semester
60 12
Examination 1
Mid Semester
60 12
Examination 2
Project 20 5
Presentation 20 5
Attendance 6
Total 40

PRESENTATION PARAMETERS-

PRESENTATION PARAMETER MARKS

Synopsis 3

Presentation 6

Content 6

Query handling 5

Total 20

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ATTENDANCE/ CLASSROOM POLICIES:

● 75% attendance in Final Exams is compulsory, failing which the student will not be allowed to sit in the respective examinations.
● Appearing and Passing in presentation is mandatory to clear internals.
● Students are advised to read economic times regularly. Discussion on news will be made a common practice.

PRESENTATION DETAILS:
Students will be given either some economic terminologies, or some economic organisations that have global importance or some general
economic concepts and its impact, of which they have to discuss the working, importance, implications etc.

1. FDI in India
2. Measurement of Inflation
3. FII : Meaning/Platforms/ Trends
4. GDP: Is GDP a real measure of Growth?
5. Problems of Indian Economy
6. India’s Rising Population
7. SAARC Nations and its major contributions
8. Indian Railways and Japanese Contribution
9. Indian Defence : Budget and Comparison with USA
10. Recent failures in Banks
11. World Trade Organisation
12. Top 10 Banks of the world
13. Income Tax Saga of India
14. Per Capita Income of India and its major trends
15. Indian Middle class is next big buzz
16. Unemployment and major states affected
17. International monetary Fund and its role: Indian Debt

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18. BRICS Nations

19. OPEC Meaning and its Role
20. How Dubai changed its economy
21. Top 5 Indian states in terms of GDP: Reasons
22. Lowest 5 Indian States in terms of GDP: Reasons
23. Middle East Economic Association
24. Schemes launched by PM that changed India
25. How planning of resources is done by countries
26. HDFC And HDFC limited Merger
27. Banking Structure of India: Changes in Past
28. The global debt
29. End of capitalisation
30. Economy of Africa
31. Silicon Valley of Asia
32. EU Economy
33. ASEAN
34. G 20 Summit
35. The Economics of hosting Olympics
36. Indian Currency Vs Dollar Prices
37. The Economics of Hosting ICC Cricket World Cup
38. India is a growing Economy
39. Challenges of Chia Economy
40. Sectors of Indian Economy and its contribution in past and present
41. Nifty and its trends
42. Sensex and its trends
43. Net worth of top 5 companies of the world
44. India imports from China
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DEPARTMENT OF BUSINESS MANAGEMENT

45. India imports from Middle East

46. India export to major countries
47. Major Exports of India
48. Major Imports of India
49. Apple in India
50. Depreciation of Indian Rupee
51. Reasons of Depreciation of Indian Currency
52. Low demand of Chinese Goods: Myth or Reality
53. Cashless Economy of India
54. Indian Stock Market Trends
55. Problems in USA Economy
56. Problems in China Economy
57. Comparison of India Vs Germany Economy
58. Japan is a stagnant economy
59. Rise of Indonesia in Economy : Major Reasons
60. USA exports
61. USA imports
62. China Exports
63. China Imports
64. World is dependent on oil
65. Major Oil producing countries of the world
66. Collapse of Sri Lanka: Major Reasons
67. Demand of Electric Vehicles
68. Top 5 Groups of India contributing in GDP of the country
69. Currency Bans: Right or Wrong
70. Implication of Rise in Investments in India
71. Hindenberg Report
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72. Stock Market in India

73. I.N.D.I.A Alliance
74. Sustainable Development Goals
75. Gold Prices
76. Swiftonomics: The Economic Influence of Taylor Swift
77. G 20 +1 Nations
78. Olympics 2024
79. Major ports of India
80. Japanese Economics

Note: Appearing and passing in presentation is mandatory to clear the internal awards of Managerial Economics-1.
No second chances will be given to appear for presentation apart from scheduled presentation days.

PROJECT:
MANAGERIAL ECONOMICS PROJECT: Each Student will be given one product, from their daily usage things. They will study and apply
various economic principles as follows:

1) Study the factors affecting the Demand and Supply of the product.
2) Elasticity of demand Product (Finding the price elasticity, income elasticity, and cross elasticity.
3) Identify the market structure and its features.
4) Pricing Strategies adopted for these products

OBJECTIVE OF THE PROJECT- The students will be able to know-

● What is the most important factor which affects a consumer while buying different products?
● What is the most widely used pricing strategy and how it helps to capture market share.
● Features of different kinds of markets.

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1. Clothes
2. Shoes
3. Fuel
4. Laptop
5. Jewellery
6. mobile Phone
7. Smart watches
8. spectacles
9. Backpack
10. Air conditioners
11. Washing Machines
12. Sports Equipment
13. Salt
14. Newspaper
15. Sanitizer
16. Perfumes
17. Cosmetics
18. Bicycle
19. Cars
20. Data Networks
21. OTT
22. DTH Cable
23. Restaurant Service
24. Airlines
25. Railways
26. Wheat
27. Sugar
28. Stocks Broker Service Providers
29. Cement
30. Steel
31. Gold
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32. Gym Facility

33. Internet Browsers
34. Paint
35. Medicines
36. Furniture
37. Medical Equipment
38. Pesticides
39. Fruits and Vegetables
40. Bottled Water
41. Water Purifiers
42. Credit Cards Service
43. Broadband Services
44. Cab Services
45. Hotels
46. Books
47. Delivery Services
48. Chocolates
49. Toothpaste
50. Soaps
51. Detergents
52. Cereals
53. Milk
54. Soft Drinks
55. Vegetable Oil
56. Electronic Industry
57. Insurance
58. Mouth Freshener
59. Sanitary napkins
60. Stationary

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CASE STUDIES:

1) Managerial Economics Decisions :Applications of Amazon and Starbucks

2) Determinants of Demand: Bob joins University
3) Cartels and their behaviour on Food Markets
4) Elasticity of Demand: Different Commodities and its calculations

ACTIVITIES:

1) Trade off Money with Needs and Wants. (What is Economics)

2) Rate the recent purchase on different factors affecting the purchase, understanding demand
3) Production of newspaper balls by dividing teams for understanding law of variable proportions
4) Analysing cost involved in organisation of Koshish Festaweek to understand cost concepts.
5) Relating production, cost and revenue together and interpretation of results for two manufacturers.
6) Formulation of Matrix consisting of various products and its markets.
7) Comparing the pricing practices of recent purchase.

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COURSE PLAN:

Case Study/Article
Lec. Content
/Assignment/Project/Activity/Methodology to be used
No
Basics of Economy/Must know /Use of PPT (Activity:
Quiz)
1-2 Basics of Economy
https://www.worldbank.org/en/news/video/2017/02/01/icp
-tutorial-video-1
Difference between Economy/Economics/Managerial
2-3 Understanding economics in daily life
Economics/Applications of all
Discussion 1: To understand basic concept of Economics,
each students has to list down their Monthly income and the
basic Expenditures they have to make in a month. Then they
MANAGERIAL ECONOMICS: BASIC INTRODUCTION: have to analyse where all they have to make a trade-offs like
compromising on one aspect and fulfilling another one.
● ECONOMICS : CHOICES AND DECISIONS, SCARCE
RESOURCES, OPTIMISATION,
1.
● CONNECTION WITH MANAGERS,MEANING, USES, PPT, listing of various interdisciplines, use of economic
HOW MANAGERIAL ECONOMICS is DIFFERENT principles
2. FROM OTHER ECONOMICS

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NATURE & SCOPE

● NATURE: applied, descriptive, prescriptive, etc.
● SCOPE: All areas and problems of firm
RELATIONSHIP WITH OTHER DISCIPLINES, ROLE IN
DECISION MAKING:
● RELATIONSHIP: With economics, mathematics, statistics, Students will discuss that how the decision making for
management, accounting etc. different goods is taken in their family.
● ROLE OF MANAGERIAL ECONOMIST
● DECISION MAKING PROCESS Case Amazon:
IMPORTANCE OF MANGERIAL ECONOMICS AND ITS https://www.youtube.com/watch?v=NrmMk1Myrxc
3. LIMITATIONS
ACTIVITY-

PRINCIPLES OF ECONOMICS:OPPORTUNITY COST, https://examples.yourdictionary.com/opportunity-cost-

INCREMENTAL AND MARGINAL, PRODUCTION examples.html
4. POSSIBILITY CURVE, Scarcity Concept
DEMAND ANALYSIS:
● Meaning Of demand-Quantity demanded at any given time
Effective demand- Desire + Willingness to Buy + ability to
buy
Types Of goods- Categorisation on the basis of types of
demand Students are require to categorise different products on
5. Demand function: law of demand different basis.
ACTIVITY-

DETERMINANTS AND EXCEPTIONS: Students have to rate down different factors while purchasing
● Factors that affect demand: price, price of related goods, different products and identify which is most important
income factor for different goods.
. ● EXCEPTIONS TO LAW OF DEMAND

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ELASTICITY OF DEMAND:
● Elasticity Of Demand- Degree of Responsiveness of demand
due to change in any one factor
● DEGREES OF ELASTICITY: 5 Degrees
Factors affecting Elasticity - Type of Product, Number of
Substitutes
● Methods to measure elasticity of demand: Price, income and
cross elasticity. https://youtu.be/4oj_lnj6pXA
7-8 ● Use of elasticity for analyzing demand, demand estimation,
DEMAND FORECASTING :
● Demand Forecasting- Ability to predict demand of various
products, Students will try to analyse that in future the demand of
● Need of Forecast - How does it affect Costs, Revenues which products is going to increase and which ones is going
Production, to decrease.
9 ● Demand forecasting of new products.
● Types of Forecast - Active Forecasts, Passive Forecast
10-11 ● factors considered before forecasting
Activity 1: Select any product or service. Study the factors
TECHNIQUES OF FORECASTING: affecting demand and supply forces for the product also
● Survey method identify the type of competition faced by the product.
12-13 ● Statistical method
INDIFFRENCE CURVE ANALYSIS:
● Properties of Indifference Curve & Assumptions
14 ● Consumer equilibrium through IC PPT
Importance of indifference curve analysis
15 ● Limitations of indifference curve analysis PPT
PRODUCTION FUNCTION:
16-17 Production Function- Concept of productivity and technology
.
● Short run production function: law of variable proportions

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● Long run production functions: returns to scale

● Isoquants and least cost combination of inputs.
18 ● Producer’s equilibrium: Estimation of production function.
THEORY OF COST :
● COST: payment made to all factors of production
DETERMINANTS OF COST
● Types of cost: money cost, opportunity cost, real cost,
business cost, direct and indirect cost, implicit and explicit Discussion: Categorise the business cost into different types
costs, economic cost, incremental, private, externalities, of cost. Discuss about product costing.
19-20 sunk cost etc.
COST FUNCTION:
● Short run cost curves
● Long run cost curves
● Modern theory of cost
21-22 ● Relationship between cost and production function.
REVENUE CURVE: Concept of Revenue,
● Different Types of Revenues, concept and shapes of Total
Revenue, Average revenue and marginal revenue,
23-24
Relationship between Total Revenue, Average revenue and
25 marginal revenue,
26 Elasticity of Demand and Revenue relation
MARKET STRUCTURE:
● Concept of Market - Place where buyers and sellers come
together to sell a product, Project
27-28 ● Market Structure: Meaning and assumptions

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Equilibrium of Perfect Competition- Price and output Students will list down the companies under perfect
determination under perfect competition giving rise to Supernormal competition, monopoly, monopolistic competition and
29-30 Profits, Normal Profits, Losses oligopoly.
Monopoly - Features, Price Discrimination Charging different
set of prices for same Product, Degrees - Ist Degree, IInd Degree,
31-32 IIIrd Degree Price and output determination under Pure monopoly Using examples
33 Monopolistic competition- Price and output determination
Oligopoly: Price and output determination under Collusive
oligopoly.
34 Price and output determination under non-collusive oligopoly.
35 Price leadership model
36 Types of Price leaderships
PRICING: Pricing practices; Commodity Pricing: Economics of Discussion:Choose any 5 products and identify the pricing
advertisement costs; differentiation.
37-38
39 Types of pricing practices
40-41 Supply: Introduction to supply and supply curve
42-43 Determinants of supply Impact of Govt Initiatives on supply of semiconductors

Revision (unit-1 and 2)

Revision (unit-3 and 4)

44-45

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