Economic Analysis for Business Decisions

Course Info

Course Number/Code: 15.01 (Fall 2004)
Course Title: Economic Analysis for Business Decisions
Course Level: Graduate
Offered By: Massachusetts Institute of Technology (MIT)
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Department: Sloan School of Management
Course Instructor(s): Prof. Ernst Berndt
Prof. Michael Chapman
Prof. Joseph Doyle
Prof. Thomas Stoker
Course Introduction:
Syllabus When you click the Amazon logo to the left of any citation and purchase the book (or other media) from Amazon.com, MIT OpenCourseWare will receive up to 10% of this purchase and any other purchases you make during that visit. This will not increase the cost of your purchase. Links provided are to the US Amazon site, but you can also support OCW through Amazon sites in other regions. Learn more.Overview

15.010 is the Sloan School's core subject in microeconomics, with sections for non-Sloan students labeled 15.011. Our objective is to give you a working knowledge of the analytical tools that bear most directly on the economic decisions firms must regularly make. We will emphasize market structure and industrial performance, including the strategic interaction of firms. We will examine the behavior of individual markets -- and the producers and consumers that sell and buy in those markets -- in some detail, focusing on cost analysis, the determinants of market demand, pricing strategy, market power, and the implications of government regulatory policies. We will also examine the implications of economics on other business practices, such as incentive plans, auctions, and transfer pricing.

Readings

The assigned readings in this course have been selected to provide a balance of principles, tools, and applications; they are detailed in the readings section. The basic text for the course is: Pindyck, Robert S., and Daniel L. Rubinfeld. Microeconomics. 5th ed. Upper Saddle River, NJ: Prentice-Hall, 27 July 2000. ISBN: 0130165832.

All other readings will be in a 15.010/15.011 course reader. Part of the work requirement for this course will involve a careful study of these readings. Students will be expected to have read the required material before class. Doing so will make the lectures much more profitable.

In addition to these readings, you should keep informed about current economic issues by reading the Wall Street Journal or the Business section of the New York Times on a regular basis. A magazine such as Business Week or The Economist is also useful for this purpose.

Homework Assignments and Exams

We will assign six homework sets in this course. We assume that you will work on the problems as the material is covered in the lectures, not leaving the whole set to be done on the day before it is due. Make sure you try all of the homework problems yourself and understand the solutions in detail -- the midterm and final exams will contain problems very similar to homework problems.

The midterm exam will be given in class six days after R5, and a three-hour comprehensive final exam will be given in L21.

Grading

Typically, grading will be based on the exams, homework, and classroom participation according to the following weightings:

Table for GradingsactivitiespercentagesMidterm Exam25%Final Exam50%Homework Sets10%Classroom Participation15%

Policy on Homework Sets and Examinations

Homework sets are designed to help you learn how to apply the material presented in lectures and recitations. You are encouraged to discuss course material, including homework, with other students in the class. While homework will be graded for feedback purposes, the grade will not count towards your final grade. With respect to your final grade, you will get full credit as long as (but only if) you turn in your homework on time. The purpose of this policy is to ensure that homework is a risk-free learning opportunity, but also to signal our very strong belief that doing the homework is really an essential part of the learning experience for this class.Handwritten solutions are fine, as long as they are legible and neat. Please remember: if we can't read it, we can't grade it.In fairness to students who complete assignments on time, late homework sets will not be accepted. You may turn in assignments during the lecture on the day they are due. In addition, assignments may be placed in designated boxes. These boxes will be emptied at 4:30 p.m. and their contents placed in sealed envelopes for delivery to the TA's. Please note that assignments left anywhere other than the boxes may be discarded.Examinations: During exams, you may consult the proctor administering the exam if you need clarification of exam questions. No discussion or other form of communication with anyone else will be permitted after the exams have been handed out, until all students have turned in their exam books. Students found to have cheated or engaged in any other unethical behavior will be given a grade of F on the examinations involved, and will be turned over to the appropriate disciplinary committees within MIT for further action. Students in the 8:30 section should not discuss an exam until after students in the 10:20 section have completed the exam. Students may not take an exam in another section and students arriving late will not be given extra time.Calculators in Examinations: The only calculators permitted in exams are those with basic mathematical functions. Calculators that are capable of handling text etc. (such as the Hewlett-Packard Palmtop) may not be used in exams.Regrade Policy: Requests for regrading an exam must be made within one week of the date upon which the graded examination is returned to the student. To request a regrade, attach a written explanation of the potential problem with the grading to the (entire) exam, and submit it to your TA. Regrading may not be limited to the part of the exam which is discussed in the written explanation. Regrades will be carried out by the 15.010 teaching faculty.

If you have any questions about these policies, please raise them with one of the faculty or teaching assistants.

Student Conduct

Professional conduct is built upon the idea of mutual respect. Such conduct entails (but is not necessarily limited to):

Attending the Class

Core classes are required for a reason, and each class benefits from the attendance and participation of all students. Your grade for participation will be affected by absences. You should sit in the appropriate seat, if relevant, and display a legible name card at all times.

Arriving on Time

Late arrivals are disruptive to both lectures and class discussion, and show disrespect to those who are on time. Class starts at 8:35 or 10:25 depending on your section.

Minimizing Disruptions

All cell phones, laptop computers, hand-held devices, and pagers should be turned off during class. You should not leave and re-enter the class. You should avoid engaging in side conversations after class has begun.

Being Prepared for Class

You should be ready to discuss any assigned readings and to answer any assigned questions for each day's class, including being ready to open a case assigned for that day.

Respect

You should act respectfully toward all class participants.

Class participation grading reflects student adherence to these principles; students gain credit for contributing valuable insights and students lose credit if they fail to adhere to any of the above guidelines.