Business Economics: Course Outline

Introduction to Economics

• What do economists study?
• Scarcity and Choice
• Trade offs
• Efficiency and Equity
• The opportunity cost
• The Production Possibilities Frontier
• Micro versus Macro Economics
• Positive Versus Normative Analysis

The market forces of Supply and Demand

Demand

• Demand Schedule
• Law of Demand
• Demand Curve
• Individual Demand and market demand
• Shifts in the demand curve

Supply

• Supply Schedule
• Law of Supply
• The Supply schedule and the
• Supply curve
• Individual Supply versus Market supply
• Shifts in Supply
• Market Equilibrium

Supply and Demand: Government Regulations

• Price Ceiling
• Price Floor
• Effect on market Outcome

Elasticity of demand and Supply

• Price elasticity of demand
• Calculation of the Price Elasticity: Point Elasticity and Average Based Formula
• Factors Affecting Price Elasticity of Demand
• Price Elasticity and Total Revenue
• Price Elasticity of Supply
• Factors Affecting Price Elasticity of Supply

 

The Production Function and the Costs of Production

• The Production Function
• Efficient Method of Production
• Production Function and Types of  Costs
• Short run cost analysis
• Long run Costs
• The Law of Diminishing Returns
• Economies and Diseconomies of Scale

Market Structures and Competitive Markets

• The meaning of Competition
• Demand for an Individual’s Firms Product
• Profit maximization and competitive firm’s supply curve
• Short-run Equilibrium of the Firm (Economic Profit, Loss, and Break even)
• The supply curve in the competitive market.
• Long-run equilibrium of the firm

Monopoly and Monopolistic Competition

• Monopoly
• Demand Curve for the Monopolist
• Profit Maximization/Equilibrium in Monopoly

 

Monopolistic Competition

• Feature of the Market
• The short-run equilibrium (profit or Loss)
• The long-run equilibrium
• Monopolistic versus perfect competition
• Price Discrimination

Oligopoly

• Characteristics of Oligopoly
• Behavior of a Firm in an Oligopolies Market
• Mutual Interdependence
• Leadership pricing
• Kinked Demand Curve

 

A Frame Work of Macro Economics

• Evolution of Macro Economics
• Scope of Macro Economics
• Integration of Micro and Macro Economics
• Separate identity of Micro and Macro Economics
• Macro Economics Variables and their Functional Relationship
• Economic Model, its Derivation and its Construction
• Macro-Economic problems

Assessing the Economy’s Performance

• Concepts of National Income
• Circular flow of National Income
• Measurement of National Income
• Income Approach
• Expenditure Approach
• Real GDP and Nominal GDP
• The GDP Deflator
• Okun’s Law
• Measuring unemployment rate
• Measuring the Cost of Living: The consumer Price Index
• The CPI versus GDP Deflator

Issues of Macro Economics

• Unemployment
  • Measurement of unemployment
  • Types of  unemployment
  • Economic and non-economic cost of unemployment
• Inflation
• Meaning and measurement of inflation
• Types of inflation
• Effects of inflation

Aggregate Demand & Aggregate Supply Curves

• Derivation of Aggregate Demand curve from the aggregate expenditure model
• Shifts in aggregate demand
• Aggregate Supply curve
• Classical version
• Keynesian version
• Shifts in aggregate supply curves
• Simultaneous Equilibrium of AD – AS  Model