Managerial Economics: A Problem Solving Approach

Abstract

The supply of business education (professors are trained to provide abstract theory) is not closely matched to demand (students want practical knowledge). This mismatch is found throughout academia, but it is perhaps most acute in a business school. Students expect a return on a fairly sizable investment and want to learn material that has immediate and obvious value. One implication of this mismatch is that teaching economics in the usual way—with models and public policy applications—is not likely to satisfy student demand. In this book, we use what we call a “problem-solving pedagogy” to teach microeconomic principles to business students. We begin each chapter with a business problem, like the fixed-cost fallacy, and then give students just enough analytic structure to show students how to solve the problem.