MANAGERIAL ECONOMICS 6000:
Emphasis in E-commerce, Emerging Technologies, Other Sturctural
Economic Shifts and Business Responses
Version 11 FALL 2005--------tentative, so modifications likely.
Richard Hannah
Professor of Economics
Room 230 Honors Building 898-2228
NOTE: If you have a disability which may require accommodation with respect to
completing the requirements of this course under the provisions of the Americans
with Disabilities Act, contact the instructor immediately.
An individual book will be assigned to each student on a first choice
basis. There is no standard text for this course, but you should obtain
a micro principles or intermediate text. MTSU's library will have such
references.
Contents
Syllabus
Books for Individual Assignment
Exam Example
Electronic Principles Lectures
Syllabus
Course Objectives
This course integrates various analytical and conceptual tools learned in
the business curriculum into the framework of economic thinking and analysis
with special reference to e-commerce, emerging technologies, and
structural economic shifts and business responses.
Required Resources
Internet applications, research and class communications
Selected book by students
Data bases given in class
MTSU library online search, access, and document review
Technical Skill Level Required
Time value analysis and interpretation
Simple regression analysis and interpretation
Simple accounting principles
Simple marketing principles
Economics principles
Spreadsheet and/or financial calculator compentency
Power and log function computation and interpretation
Class Activities
Each class will be a mixture of short lectures, individual and/or group
presentations, review of Powerpoint materials, case exercises, reports based on
writing assignments. This is not a course in which you learn to use the
Internet. I expect you to know this coming in. I am apt to pick discussion
leaders at random to guide the class discourse on the cases and other reports.
Grading
I will generally follow the criteria that absence, late arrival,
or early leaving will reduce the course grade by an approximate ratio of absent
time divided by total class time, multiplied times the grade percent for
class participation. Of course, there are unavoidable events, but habitual
behavior of this nature will detract from the grade. Grading in on the +/- basis.
A numeric assignment up to 100 is given to each graded component, with 92-100
(A), 90-92 (A-), 88-90 (B+), and so forth.
A rough approximation (revisions possible):
Business curriculum/other paper 10%
1st exam 10%
Preliminary book review 10%
TVA case 10%
Midterm 10%
E-commerce or other case 10%
Discussion list case 10%
Final book summary 10%
Final exam 10%
Class participation 10%*
* May include TV program taping.
With respect to written assignments, successful students took the time
to read the following: Click here for Hannah's Rules of Paper Writing.
Some presentations may be on Cable TV for telecast on Channel 9. Students are
expected not only to develop proficiency in e-commerce in the context of
economic thinking, but also to demonstrate knowledge of the credible
related resources on the Internet. Late assignments are penalized from
between 1 and 5 points per day. Make-up exams will not likely be given
until the end of the semester.
The items listed under each date are the planned content. We will adapt the
sequence to the circumstances of the day. Case information will be given in
class or communicated electronically. On all assignments, you are to be
prepared to present your findings, ideas, thoughts, and conclusions to the class
in a professional manner. I suggest preparing 4-5 Powerpoint slides that help
accomplish this task, but you are free to use other creative learning
tools. One key element of evaluation is how well you are integrating the course
material into economic themes of analysis and thought. Students are assumed
familiar with MTSU library resources, especially online databases.
Note that I am revising Powerpoint presentations this semester. There
will be fewer than in the past, and new material introduced. I will
likely have to send these via attachment as the semester progresses.
08/30
Review of Microeconomic Theory and Practice Problems
Demand, production, cost, profit maximization model, market structures
Class exercises
Instructions on paper due next week
Comments on E-commerce evolution
Lecture--Economic Surveillance and the Nature of Exchange: Bi-Lo Ex.
09/06
Paper on business curriculum due: 2-3 pages.
Discussion of paper
Review of Time Value Computations and Practice Problems
Relationship of NPV to profit maximization model
Review of Regression analysis and interpretation, and practice problems
Pricing strategies and price discovery--
conventional vs. information rich environment
09/13
Exam 1
09/20
Begin E-commerce overview.
09/27
Pricing strategy cases and class discussion: leaders picked at random.
E-commerce Online Sources (Powerpoint): on your own.
10/04
Complete E-commerce Overview.
Written assignment: 3 pages on the first 50% of your assigned book:
(1) summary points, (2) integration with other e-commerce or emerging
technology material (if applicable), and (3) economic perspective.
[Also, these are the basic components for the Powerpoint slides should
you be called on.]
International E-commerce Comparisons (Powerpoint)
10/11
Electronic Network Impacts on Professions (Powerpoint)
Written assignment: case to be given.
In-class case.
10/18
Fall Break.
10/25
Introduction to TVA case
11/01
Midterm.
Written assignment due: TVA case
Presentation and discussion of TVA case
11/08
Deregulation and privatization.
Economics of education.
Possible guest speaker.
11/15
Reports due on remainder of books: 3 pages.
11/22
Biotechnologies, nanotechnologies, and MEMS
Economics and mind control.
11/29
International dimensions and/or other activities
Possible TV tapings. Any other unfinished business.
12/13
Summary of other areas of economic theory--e.g., game theory
Possible TV tapings. Any other unfinished business.
Books to be Individually Assigned
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Books assigned on first come, served basis--upon my approval of the one
you select. It is very important to think about how your selection either
sharpens you intellectual interests or lends to your career path. Ordering
the book early and getting started is also crucial.
Various libraries may have some of these, but the responsibility of purchase
and review in a timely manner to complete the class assignments lies with the
students. Other books may be added.
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Berners-Lee, Tim. 1999. Weaving the Web: The Original Design and
Ultimate Destiny of the World Wide Web by Its Inventor. HarperCollins: New York.
ISBN 0-06-251587-X. Excellent review by visionary creator of the WWW. Presents
a good overview of the evolution from search to logic to trust engines and
electronic agents. A idealistic view of the positive side of the WWW.
Dow, Gregory. 2003. Governing the Firm: Workers' Control in Theory and
Practice. Cambridge University Press. ISBN 0-521-52221-8. This book is
a deep analysis of the changing structural undercurrents in the control of
firms. Most suitable for students who are seeking a deeper understanding
of this struggle and how it has changed in the 21st century.
Brown, John Seely and Paul Duguid. 2000. The Social Life of
Information. Harvard Business School Press: Boston. ISBN 0-87584-762-5.
Reviews the clash between social and economic interests, the intellectual
history and dimensions of information as data, knowledge, and useful
applications.
Crichton, Michael. 2002. Prey. NY: HarperCollins Prublishers.
ISBN 0-06-621412-2. Excellent science fiction merger of nano-tech,
computer-tech, and bio-tech--and self-organizing principle of economics.
Cross, Gary. 2000. An All-Consuming Century: Why Commercialism Won in Modern
America. NY: Columbia University Press. ISBN 0-231-11312-9. Historical view
of our society as driven by materialism and our "culture" of
consumption. Great perspective on marketing.
Evans, Philip, and Thomas S. Wurster. 2000. Blown to Bits: How the New
Economics of Information Transforms Strategy. Harvard Business School
Press: Boston. ISBN 0-87584-877-X. An excellent book that reduces the
abstractness of information economics to several practical expressions,
especially relevant to understanding the separation of the value of information
from the physical things to which it is attached.
Fialka, John. J. 1997. War by Other Means: Economic Espionage in Amerca.
New York: W.W. Norton & Company. ISBN 0-393-04014-3 The game is not what
you innovate, but what you steal.
Fisher, Helen. 2004. Why We Love: The Nature and Chemistry of Romantic
Love. Henry Holt and Company: NY. ISBN 0-8050-6913-5. Not open for
selection unless you are into the implications of neuroscience
advancements for economics.
Gates, Bill. 1999. Business @ The Speed of Thought. Warner Books: New
York. ISBN 0-446-52568-5. A surprisingly insightful, insider's view of how
information systems and electronic networks can change organizations, especially
the cultural environment.
Keen, Peter G. and Ron Mackintosh. 2001. The Freedom Economy: Gaining the
M-Commerce Edge in an Era of the Wireless Internet. Berkeley,
CA: Osborne/McGraw-Hill Press. ISBN 0-07-213367-8. Illustrates how far
behind America is in the new dimension of e-commerce.
Lee, Michelle. Fashion Victim: Our Love-Hate Relationship with Dressing,
Shopping, adn the Cost of Style. Broadway Books: NY. ISBN 0-76-791048-6.
Lewis, David, and Darren Bridger. 2000. The Soul of the New
Consumer: Authenticity--What We Buy and Why in the New Economy. Nicholas
Brealey Publishing: London. ISBN 1-85788-246-6. Definitely a good book for
those interested in consumer psychology in the digital age.
Micklethwait, John, and Adrian Wooldridge. 2003. The Company: A Short
History of a Revolutionary Idea. Modern Library (Random House).
ISBN 0-679-64249-8.
Moon, Michael. 2000. Firebrands: Building Brand Loyalty in the Internet
Age. Osborne/McGraw-Hill: Berkeley. ISBN 0-07-212449-0. Emphasizes the
importance of branding in the Internet context. This book integrates consumer
profiling and the need for the technically literate consumer to self-serve in
the Internet business model. Another light read.
Oliver, Richard W. 2000. The Coming Biotech Age. McGraw-Hill: New York.
ISBN 0-07-135020-9. This book extends the dynamics of change we are
experiencing in the digital age by looking beyond our current circumstances to
the coming biotechnology revolution. Actually the two overlap with a third
technical wave, new materials based on atomic level restructuring (Nano
technology) and new micro machines (MEMS technology).
Parenti, Christian. 2003. The Soft Cage: Surveillance in America. Basic
Books: NY. ISBN 0-465-0584-6.
Rifkin, Jeremy. 2000. The Age of Access. Jeremy P. Tarcher/Putnam: New
York. ISBN 1-58542-018-2. Extremely engaging intellectual view of ubiquitous
commercialization of everything, including culture, in the post-modern
world. For deep thinkers.
Schiffrin, Andre. 2000. The Business of Books: How International
Conglomerates Took Over Publishing and Changed the Way We
Read. Verso: New York. ISBN 1-85984-763-3. A highly critical view of how
publishing conglomerates are monopolizing ideas in the new publishing
business model, made possible by the information revolution.
[This book can only be chosen jointly with the Zaid book listed
below. This is, you must read them both.]
Schlosser, Eric. 2001. Fast Food Nation. Houghton Mifflin Company: New York.
ISBN 0-395-97789-4. Very influential book on how the fast food industry
has changed our culture through how and what we eat. Topics range from
obesity problem to labor abuse to genetic homogenization of taste.
Schor, Juliet B. 2004. Born to Buy: The Commercialized Child and the New
Consumer Culture. Schribner: NY. ISBN 0-684-87055-X. Also by same
author: The Overworked American and the Overspent American.
Schwartz, Barry. 2004. The Paradox of Choice: Why More is
Less. HarperCollins Publishers Inc.: New York. ISBN
0-06-000568-8. Explores what it means to our consumer driven society when
we have too many choices.
Zaid, Gabriel. 2003. So Many Books: Reading and Publishing in an Age of
Abundance. Paul Dry Books: Philadelphia. ISBN 1-58988-003-X.
A very short read. Must be selected jointly with the Schiffrin book
listed above.
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Exam Example
Date: Mon, 13 Aug 2001 16:29:53 -0500 (CDT)
From: Richard L. Hannah
To: Richard L. Hannah
Subject: Managerial Econ 600: Midterm Fall 2000 (fwd)
INSTRUCTIONS
Answer each part as thoroughly as possible within the space constraints
specified, ensuring that you utilize all relevant information. If you
think you must make an assumption in order to write a complete answer,
state what your assumption is. Explain enough of your computational work
so that I can duplicate your results. For any time value computations,
assume annual, end-of-year compounding.
I reserve the option of imposing a one point penalty for each hour your
response is late--defined as received in my email inbox. The deadline is
Monday, October 16th at midnight. My receipt of your email response is an
explicit statement of honor that all the work is yours. You may use any
document that helps answer the questions, but not the expertise of other
people. The maximum equivalent hard print, single spaced page limit for
this exam is 5. This does not count the exam itself.
Do not send as an attachment. Make sure you label each question and part.
I suggest using the reply function and inserting your answer after each
question, but I'll leave the method up to you. Copy yourself as
verification that you send your email reply.
1) Assume a classical monopoly in the long run. The following information
applies.
Demand crosses the X-axis at Qd=200
MR intersects AC at AC's minimum point & crosses the X-axis at Qd=100
Minimum point of AC occurs at Qd=75 and AC=200
AC=250 at the level of Qd where MR=0
"Fair" [regulated] price occurs at P=300 and Qd=125
MC intersects demand at P=400 and Qd=100
At Qd=75, P is 500
a) As a profit maximizer, how much economic profit is this firm making?
b) Compute the theoretical maximum revenue level. Explain how you know
this is the maximum. With what other point does this coincide? Explain
how you know this.
c) Theoretically, at what level would regulators force revenues, and how
are profits described in this context? If the regulators can do this, who
is better off? Worse off? Why?
d) Assuming a discount rate of 7 percent annually, if this model did not
change in 10 years, what would be the net wealth added to the firm at the
socially optimal price?
2) Assume the following supply equation for oil production.
Qs = 500 -50P -10N +25R
(.75) (1.5) (1.7) (2.3)
where, P is price per barrel, N is number of producers, and R is known
reserves in oil fields.
Evaluate these regression results from the economics perspective.
3) Assume you are consultant and have been called on to advise
MTSU on estimating the demand for credit hours taught online.
Specifically assume there will be a comprehensive web page for each
course offered. Write the conceptual form of a demand equation,
specifying the dependent variable, and five independent variables.
Describe the metrics for each of these variables--i.e., how they will be
measured (e.g., put into the spreadsheet), and the expected sign on each
coefficient.
4) Write a brief summary of why you think e-commerce presents
challenges that are incongruent with classic economic theory.
5) Explain the relationship between the evolution of information
technology (in the context of e-commerce) and Ronald Coase's theory of the
firm--as I presented it in class. What is your interpretation of how this
may impact the functions of government?
6) From the perspective of economic philosophy, what happens in the
oligopoly model that is qualitatively very different from the other models
of market structure.
7) Given the production function: Q= 65K^.6*L^.1*E^.4
If K=5, L=5, and E=5, what is Q. What other observation(s) can you make
about this equation?
8) Describe network economics (as discussed in class) and the criticism
I offered as "Hannah's Law"?