Upon the completion of this course the student should be able to:

• Explain in broad terms how managerial economics can help managers to be effective decision-makers.
• Appreciate how crucial cost-effective incentive systems are to the efficient allocation of scarce resources.
• Use demand and supply analysis to predict the effects of changing conditions on market equilibrium and to evaluate the market effects of changes in public policy (such as an increase in the minimum wage).
• Understand the importance of cost-benefit analysis and how the timing and riskiness of different choices affect their present value.
• Understand the challenges that the “principal-agent” problem raises for managers in large, publicly-owned corporations.
• Have an understanding of the circumstances in which markets perform well and the conditions that may lead to market failures, and their implications.
• Analyze the effects (both good and bad) of government attempts to correct for market failures.
• Apply demand theory, including the concept of elasticity, to managerial decision-making.
• Appreciate how a firms debt/equity structure may influence managerial incentives.
• Explain how market structure influences firm behavior.
• Explain the implications of different employee pay systems.
• Understand the implications of the application of economic theory to voting and the political process.
• Appreciate the complications of doing business in a global environment.

• Understand the importance of observing and understanding current events.