Economic analysis for business decisions

Lectures: 2 sessions / week, 1.5 hours / session

Recitations: 1 session / week, 1 hour / session

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.

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.

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.

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

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

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

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.

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.

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.

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.

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.

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