Aims
This course aims to:
• provide an introductory understanding of business economics (Micro and Macroeconomics)
• provide an understanding of how business economics may be used to explain and predict phenomena relating to markets and firms
• explore the use of business economics in analysing management problems and managerial decision-making
• explore the use of business economics in analysing the impact of government policy on business and vice versa
Content
The application of Business Economics to business decision making remains the key driving force in firm profitability. This fundamental course provides a portfolio of tools from micro-economics and macroeconomics that can be used in the analysis of firm profit maximisation. It introduces participants to dealing with managerial decision-making via introductory economics.
Session 1 defines Business Economics and discusses the main economic systems that exist in the world today. The discipline of economics is discussed as mainly concerned with the production and consumption of goods and services.
Session 2 discusses demand as the amount customers are willing and able to buy in a given period; focus is given to understanding the relationship between price and quantity demanded – the Demand Curve. The lecture explores the concept of elasticity of demand; that is, identifying the influences on consumer demand and the responsiveness of consumer’s demand to changes in prices, income and the prices of other products.
Session 3 discusses supply as the amount producers are willing and able to produce at each and every price. The determinants of supply and influences on supply such as the effect of subsidies and indirect taxes are explored as well as break-even analysis; this demonstrates how a business is able to work out the feasibility of its production model. The forces of demand and supply come together to create equilibrium prices and quantities.
Session 4 discusses the determination of the equilibrium point, exploring the application of equilibrium prices and quantities in different markets. There is also a comparison of the market system with other types of economic systems, as these all address the issues of demand and supply in different ways.
Session 5, our concluding session, discusses profit maximization, as well as summarises content from all sessions.
Presentation of the course
The 5 sessions will mainly take a format of a Course Director-Led lecture but will be variable with Student-led activities. For each session, students will be expected to engage in activities such as discussing questions with other students (a 15-minute workshop style approach during each session). While the lecture content will be delivered using PowerPoint slides and explanation from the Course Director, the case studies, exercise sheets and student discussion will form the interactive aspect of the class.
Course sessions
1. Session 1: What is Business Economics?
2. Session 2: Demand
3. Session 3: Supply
4. Session 4: Market equilibrium
5. Session 5: Profit Maximisation
Learning outcomes
You are expected to gain from this series of classroom sessions a greater understanding of the subject and of the core issues and arguments central to the course.
The learning outcomes for this course are:
• a clear understanding of the functioning of a free market economy
• a fundamental understanding of the forces of demand and supply
• an appreciation of the importance of profit maximisation in a business
