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Business Economics: Course Outline

This course is an economist' kit of tools for MBA students that can be used to understand the basics of economics. It covers micro-and macroeconomic issues that are essential for managers and professionals.

Course Contents

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

Recommended Books

Course Contants

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