COURSE: BUSINESS ECONOMICS (ECO 509)

Course Objective:
Economic theory is a very powerful tool that can be used by managers to analyse many issues
facing modern societies including some that do not appear to be ‘economics’ on the surface. The
basic objective of this course is to thoroughly familiarize the students with a working knowledge
of Economics.
Teaching Strategy:
The lecture will be divided into two parts the first being 1 hour long in which the text will be
explained, followed by a 30 minute discussion session, devoted to using and applying the
knowledge gained in class through individual as well as group activities. Primarily these sessions
will consist of case studies, problem sets, presentations and most important of all quizzes. The
student should be prepared to expect a quiz in the class after the completion of a chapter.
Attendance of 90% is compulsory throughout the semester, failing to comply with this result in
negative marks on the final grade. (For every absent class 1% will be deducted from the final
attendance marks.)
SYLLABUS
I. An Introduction to Economics and the Economy
 The Nature and Method of Economics
 The Economizing Problem
 Private and Public Sector
II. Micro Economic Concepts
 Individual Markets: Demand and Supply
 The Market System
 Supply and Demand: Elasticities and Government Set Prices
III. Micro Economics of Product Markets
 Consumer Behaviour and Utility Maximization
 The Cost of Production
 Pure Competition
 Pure Monopoly
 Monopolistic Competition and Oligopoly
IV. Macro Economic concepts and Theories
 Introduction to Economic Growth and Instability
 Business cycles, Unemployment, and Inflation
 Measuring Domestic Outputs, National Income and the Price level
 Building the Aggregate Expenditures Model
 Aggregate Expenditures: The Multiplier, Net Exports and Government
V. Fiscal and Monetary Policy analysis using AD/AS Framework
 AD/AS analysis & Fiscal Policy
 Money and Banking ,Monetary Policy
Core Reading List:
McConnell, Brue, & Flynn: Economics, 21st Edition.

Website to McConnell textbook:

http://highered.mcgraw-hill.com/sites/0073375691/student_view0/
Instructor: Resham Naveed
Office Hours: Monday (10-11 am), Tuesday and Wednesday (11:15-12:15)

Exams:
There will be a mid-term exam and a final exam. PLEASE NOTE THAT THE FINAL
EXAM WILL BE CUMMULATIVE.

Student Portal: All lecture slides, solution to quizzes, assignment and quiz grade will be
uploaded at the student portal: student.lahoreschool.edu.pk

Final Grading Criteria:

Final Exam 40%
Mid Term 20%
Quizzes 20%
Assignments 10%
Attendance 5%
Final Presentation 5%

Quizzes:
There will be 4 quizzes throughout the semester. CELL PHONES MAY NOT BE USED AS
CALCULATORS. If a quiz is missed (even for a valid excuse), that will count as the dropped
quiz grade and the student will not be allowed to retake the quiz. All students must take their
quizzes with their own section and will not be allowed to take any quizzes with other sections.

Missed Exam Policy:

The controller of examinations must determine that a valid excuse has been accepted. If a mid-
term is missed with a valid excuse, the make-up will be given with the final exam.
Unexcused missed mid-terms will receive a grade of zero. Students who miss the final will have
to take it the following semester (the next time the exams are administered). Students without a
valid excuse for the final exam will have to re-take the course.

Make-up Policy:
Make-up exams will only be administered when the controller of examinations determines that a
valid excuse has been accepted. Unexcused mid-terms will receive a grade of zero. Students
without a valid excuse for the final exam will have to re-take the course.
Student Learning Outcomes:

 This course will demonstrate how economic logic offers elegant insights into business

decision making. 

 The approach in the rst part of the course will be to develop a number of basic
Microeconomic principles with knowledge of market structures and then analyze them in
the context of a variety of issues of particular relevance to managers. 

 In the second part of the course, there will be focus on different perceptions of
Macroeconomic policies and examine how current market conditions in Pakistan and
global economies affect individual business and personal decisions. 

 It will be seen that a fundamental working knowledge of the firm’s economic
environment and the macro economy can improve both day today managerial decision
making and long term strategic planning. 

 The relevance of an economics perspective for the many functional areas of
business
will also be made clear using multiple Case Study sessions and text book
reference from Campbell R McConnell & Stanley L.Brue, Economics, 19th Edition and
Lipsey & Chrystal, Economics, 12th Edition. 

Assignments / Problem sets :
There will be approximately 10-11 problem sets/assignments throughout the semester. Students
may work together on problem sets, with a maximum of seven students per group. However,
each student in the group must turn in their OWN responses to the problem set (i.e. one
assignment with seven names on it will not be accepted). If a problem set is turned in one day
late, 20 points will be deducted from the grade, and no problem set will be accepted more than
one day late.
Lahore School of Economics Plagiarism Policy: 
Lahore School adheres strictly to HEC
plagiarism policies which are available on the HEC website and Lahore School handbook on
plagiarism policy. 
The policy can be found at
http://hec.gov.pk/english/services/faculty/Documents/Plagiarism/Plagiarism%20Policy.pdf

The Lahore School Regulations on Student Code of Behaviour specifies penalties for
plagiarism in reports, research papers and presentations in courses taken and in articles published
while studying at the Lahore School. 


Additional Readings:
Lahore School Policy Papers: http://lahoreschoolofeconomics.blogspot.com
Case studies from Harvard Business School
1. The Challenge of the Century: Inclusive Growth and Development
2. India Shedding Tears over Onion Prices
3. China's Miracle Economy: Causes, Consequences, and Current Status
 LECTURE SESSION I LECTURE SESSION II
1.The Nature & Method of Economics, the The Economizing Problem. Opportunity
Market System &the Circular Flow Cost and Production Possibility Frontiers
Assignment Case Study: Cutting up the Military
Problem Set 1 as Quiz 1
2.Individual Markets; Demand &Supply Demand &Supply, Market System & The
Case: Ford is Bullish about its New Taurus Determination of Price
Case: Grocery cart wars Problem Set 2
(Quiz 2)
3.Elasticity of Demand Elasticity of Supply
Case Study: Nintendo, Sega Zap, Prices as Problem Set 3
video games war heats up Quiz 3
4. Consumer Behavior and Utility HBS Case: India Shedding Tears over
Maximization Onion Prices
Quiz on case

5. The Intermediate theory of supply, firm Problem Set 4

,production and costs, the firm in practice
in the Short run & Long run Quiz 4
Case Study: German firms bemoan costs

6.Perfect competition, market structure and Monopoly

firm behavior, elements of theory of perfect Problem set 5
competition in Short run & Long run Quiz 5
Equilibrium
7.Monopoly a single price monopolist, Imperfect competition among the few
cartels as monopolies, a multi price Quiz 6
monopolist: price discrimination Problem set 7
Problem set 6
8.Imperfect competition among the many Mid revision session
Problem set 8 Quiz 7
9. MID TERM EXAM MID TERM EXAM
10. Introduction to Economic Growth and Business cycles, Unemployment, and
Instability. Problem set 9 Inflation (Quiz 8)
The Challenge of the Century: Inclusive Problem set 10
Growth and Development
11 Measuring Domestic Output, National Quiz 9

Income and the Price Level.

12. Building the Aggregate Expenditure Aggregate Expenditures: The Multiplier,

Model. Net Exports and Government
Quiz 10
13 Aggregate Demand /Aggregate Supply Quiz 11
&Fiscal Policy Presentation
14 Money & Banking & Monetary policy Presentation
 Final Revision
15.FINAL EXAM FINAL EXAM