Friday, January 11, 2013

Open Course Ware @ FIX University

Microeconomics for Managers

Richard McKenzie

This course is designed to introduce students to basic microeconomic theory at a relatively rapid pace without the use of complicated mathematics. The focus will be on fundamental economic principles that can be used by managers to think about business problems, including those that arise from coordinating workers and managers inside firms and from dealing with outside market forces and government policies.
Watch intro video
Next Session:
Jan 21st 2013 (10 weeks long)You are enrolled!
Workload: 6-8 hours/week 

About the Course

This course is designed to introduce students to basic microeconomic theory at a relatively rapid pace. The focus will be on fundamental economic principles that can be used by managers to think about business problems, including those inside the firm (relating to the problem of administering the firm’s resources in the most cost-effective way) and those outside the firm (relating to broader market and government forces that can affect the behavior of firms). The course will not deal directly with standard “managerial economics,” which tends to emphasize the mathematics and statistical techniques used in optimizing firm decisions. However, every effort will be made to apply basic principles to management problems, mainly
those relating to getting incentives right for customers, suppliers, workers, managers, and owners. Accordingly, this course will focus on an emerging subdiscipline within economics, organizational economics. It will stress methods of thinking, and students will be evaluated on their ability to recall, use, and extend the methods of thinking that are covered during the quarter.

About the Instructor(s)

Richard McKenzie is the Walter B. Gerken Professor Emeritus of Enterprise and Society in the Paul Merage School of Business at the University of California, Irvine. He retired from the University of California, Irvine at the end of June 2011, but only to pursue an array of academic and non-academic (business and services) ventures, including the development of this online video lecture course, which is designed to work well with his own textbook in microeconomic, which can be ordered in print and ebook versions.
Professor McKenzie received numerous excellence in teaching awards during his career.
McKenzie has written more than thirty books and monographs, the latest of which was released in September 2011, Heavy! The Surprising Reasons America is the Land of the Free – And the Home of the Fat (Copernicus). His other recent books include Predictably Rational?  In Search of Defenses of Rational Behavior in Economics (Springer 2010), Why Popcorn Costs So Much at the Movies, And Other Pricing Puzzles (Copernicus 2008), In Defense of Monopoly: How Market Power Fosters Creative Production (University of Michigan Press, 2008), and Microeconomics for MBAs: The Economic Way of Thinking for Managers (Cambridge University Press, 2006 and 2010). His earlier titles include Digital Economics: How Information Technology Has Transformed Business Thinking (2003); Trust on Trial: How the Microsoft Case Is Reframing the Rules of Competition(2001); Managing Through Incentives: How to Develop a More Collaborative, Productive, and Profitable Organization (1998). His New World of Economics, co-authored with Gordon Tullock, has gone through six editions, has been published in five foreign languages, and has been used in most of the country's major colleges and universities.  A substantially revised and updated sixth edition of the The New World was released in the spring of 2012 for new generations of economics students.
Due to the large number of enrolled students and the open online nature of this course, the instructor will likely not be able to respond to individual student emails. There will be ample forums for content question answers once the course begins.

Course Syllabus

Week One: Economic Thinking. Topics include rational behavior and the law of demand and Maslow's Hierarchy.

Week Two
: Property Rights and Trade. Topics include property right, markets, the prisoner's dilemma, and comparative advantage.

Week Three
: Competitive Markets and Policies. Topics include supply and demand, market efficiency, labor markets, adding features to products, adding fringes to pay packages, and more.

Week Four
:  Competitive Markets - Prospects and Problems. Topics include incenttves, trust and welfare, external costs and pollution rights, external benefits, the logic of queues and others.

Week Five
: International Trade and Finance. Topics include international trade and protection and exchange rates.

Week Six
: The Theory of Demand and Applications. Topics include the elasticity of demand, rational addiction and network effects.

Week Seven
: The Theory of the Firm. Topics include principal-agent problems, firms and coordinating costs, opportunistic behavior, and make-or-buy decisions, franchising, and leverage and moral hazard. 
Week Eight: Cost Structures. Topics include short- and long-run cost structures.
Week Nine: Market Structures. Topics include production under perfect competition, production and pricing under pure monopoly, taxation and regulation of monopoly, perfect and imperfect price discrimination, market segmentation, monopolistic competition, oligopoly and cartels, contestable markets, and natural monopoly.
Week Ten: Special Topics in Market Theory. Topics include problems with monopoly theory, the lemon problem, first-mover advantage, the innovator's dilemma, competitive labor markets, monopsony labor markets, and executive pay.

Recommended Background

Some microeconomic courses are math-heavy. They require calculus as a prerequisite. In this course, the goal is to instill the economic way of thinking about business. Little math is used in the lectures (and Professor McKenzie's textbook to which the lectures are tied), but that does not mean the analysis will not be sophisticated, challenging, and rewarding.  Indeed, on finishing this course, students will be impressed with how challenging and sophisticated business decisions can be and how useful the economic way of thinking can be in understanding business problems and in guiding business decisions.

Suggested Readings

Students should also consider ordering the sixth edition of Richard McKenzie and Gordon Tullock's The New World of Economics (Springer, 2012). Professor McKenzie will occasionally draw lecture topics from this book. This book also applies the economic way of thinking to an array of social and business problems, from the economics of marriage and obesity to why popcorn costs so much at the movies.  Because of the range of conventional and unconventional topics covered in every edition of The New World (with the first edition released in the mid-1970s), it might rightfully be considered a predecessor to Freakonomics, a widely read economics book (which is recommended for students who want to expand their coverage of applied topics beyond the content of this course).

Course Format

This is a complete college and MBA-level course in microeconomic theory, covering fifty-eight lectures, which range in length from twenty to thirty-five minutes.  These lectures contain as much content as any university-length course in microeconomics.  They can be used as a stand-alone course or as supplements to courses being taken by students at their universities.
Although the video lectures can work with several microeconomics textbooks, they work best with Professor McKenzie's own textbook, Microeconomics for MBAs: The Economic Way of Thinking for Managers, 2nd ed. (Cambridge University Press, 2010).  The printed version of this textbook can be ordered from Amazon by clicking on the above title.  The ebook version of the textbook can be order from the publisher by clicking here.
While "MBAs" is in the title, the content is accessible to all students (undergraduate and graduate) who are serious about learning how economic principles can be applied to business.  Professor McKenzie has provided a longer video introduction to the course -- which gives details on the course, shows how the lectures will appear, and provides a sample of his online approach to lecturing – on YouTube.
For those students who want to have the video lectures on their computers’ hard drives, a complete set of the video lectures can be ordered via email after January 14, from Dickens Press.


Will I get a certificate after completing this class?
Yes. Students who successfully complete this class will receive a Statement of Accomplishment from Coursera.

What resources will I need for this class?
The course is self-contained, with the recommended textbooks amplifying the analysis and application of economic reasoning.  Two tests will be given, the first covering the first five weeks of assignments and the second covering the last five weeks of assignments.

Does this class prepare me for admission to an MBA program?
This course in Microeconomics for Managers is an appropriate course for satisfying any pre-MBA requirement in microeconomics. It can also be used in MBA programs.  (Students are advised to check with their own universities' academic advisors on the acceptance of this course for academic credit in their undergraduate and MBA programs.)

Is there an open license to the materials included in this course?
Yes, some materials are available for reuse under a Creative Commons license from the UC Irvine OpenCourseWare site.

Economics & Finance 

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