Economics for Managers

Topics: Economics, Supply and demand, Microeconomics Pages: 7 (1554 words) Published: September 1, 2013
Gujarat University, Ahmedabad – MBA Programme Details of the Courses Offered Annexure E Course Code: C101 Economics for Managers (EFM) 1. Course Objective This course is designed to impart knowledge of the concepts and principles of Economics, which govern the functioning of a firm/organisation under different market conditions. It further aims at enhancing the understanding capabilities of students about macro–economic principles and decision making by business and government. 2. Course Duration The course will have 45 sessions of 60 minutes duration. 3. Course Content Assignment of sessions to the modules of course is as follows: Module No. I Session Marks (Uni. Exam) 09 20

Modules/Sub-Modules Ten principles of economics How people make decisions; How people interact; How the economy works as a whole. Thinking like an economist The scientific method; Role of assumptions; Economic diagram; Production models; The circular-flow possibilities frontier; Micro and macro economics; Positive versus normative economics; Why economists disagree’’ The market forces of supply and demand Markets and competition; Individual demand; Demand schedule and demand curve; Market demand versus individual demand; Shifts in the demand curve; Supply schedule, Supply and demand– equilibrium, analyzing changes in equilibrium. Elasticity and its application The elasticity of demand; The elasticity of supply, application of elasticity. Case: Pricing, admission to a museum. Consumers, producers and the efficiency of markets Consumer surplus; Producer surplus; Market efficiency– the benevolent social planner; evaluating the market equilibrium; Market efficiency and market failure The costs of production

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Gujarat University, Ahmedabad – MBA Programme Costs – total revenue, total cost and profit, costs as opportunity costs, cost of capital as an opportunity cost, economic profit versus accounting profit; Production and costs – the production function, from production function to the total cost curve; various measures of cost – FC, VC, AC, MC, cost curves and their shapes and relationship; Costs in the short run and long run – relationship between SR and LR ATC, economies and diseconomies of scale. 09 Firms in competitive markets What is a competitive market; Profit maximization and the competitive firm’s supply curve; The supply curve in a competitive market? Case: Near empty restaurants and off-season miniature golf. Monopoly Why monopolies arise; How monopolies make production and pricing decisions; The welfare cost of monopoly – deadweight loss, social cost; Public policy towards monopolies; Price discrimination – the analytics of price discrimination, examples of price discrimination (movie tickets, airline prices, discount coupons, financial aid, quantity discounts). Case: The De Beers Diamond Monopoly. Oligopoly Markets with only a few sellers – duopoly, competition, monopolies and cartels, the equilibrium for an oligopoly, how the size of an oligopoly affects the market outcome; Game theory and the economics of cooperation – prisoners’ dilemma, oligopolies as a prisoners’ dilemma, other examples of prisoners’ dilemma (arms race, advertising, common resources), the prisoners’ dilemma and the welfare of society, why people sometimes cooperate. Case: OPEC and the World Oil Prices Oligopoly – contd. Public policy towards oligopolies – 09 restraint of trade and the antitrust laws, controversies over antitrust policy, resale price maintenance, predatory pricing, tying. Case: An Illegal Phone Call Monopolistic competition Competition with differentiated products – firms in the short run, the long-run equilibrium, monopolistic versus perfect competition (excess capacity, mark up over marginal cost), monopolistic competition and the welfare of society; Advertising – the debate over advertising,





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