This graduate-level course is concerned with the application of economic principles to key management decisions within organizations and provides guidance to increase value creation and allows a better explanation of the external business environment in which organizations operate. The primary purpose of the course is to develop tools useful in other Anderson courses: economics is a key foundation for much of what is taught in finance, marketing, business strategy and virtually every other course in the MBA program. Managerial Economics is fundamentally a unique way of thinking about problems, issues, and decisions that managers face in each of the functional areas of their organization. This unique way of thinking stresses the importance of incentives as determinants of human behavior and performance and emphasizes the consideration of costs and benefits as an efficient method for reaching economic decisions.