COURSE OUTLINE

Business Economics (ECO409)

Course Title and Code: Business economics (ECO 409)
Total Credit hours: 45 hrs
Duration: 15 sessions (3-hrs per session)
1. Overall aims of course
This course covers the core economics thatwill needed as a business student. Business economics is
the application of economic theory and methodology to decision making problems within various
organizational settings such as a firm or a government agency. The emphasis in this course will be
on demand analysis and estimation, production and cost analysis under different market conditions,
forecasting and decision making under uncertainty. Students taking this course are expected to have
had some exposure to economics and be comfortable with basic algebra. Some knowledge of
calculus would also be helpful.

2. Course Contents:
i. Business and the economic environment
 The economist’s approach to business
 The business organization
 Profit Maximization calculation
 The external business environment

ii. Market Forces: The Basics of Demand, Supply

 The working of competitive markets
 Business in a perfectly competitive market Demand, Supply
 Price and output determination
 Elasticity of demand and supply

iii. Demand and the firm

 Understanding consumer behaviour
 Estimating and predicting demand
 Stimulating Demand

iv. Supply decisions in a perfectly competitive market

 Production and costs: short run, Production and costs: long run, Revenue ,Profit
maximization

v. Government, the firm and the market

 Market failures
 Business ethics and corporate social responsibility
 Government intervention in the market
 Environmental policy
 Competition policy and business behaviour
 The regulation of business

vi. The macro-economy and business activity

 Business activity and the circular flow of income
 The determination of business activity
 The business cycle
  Money, interest rates and business activity
 Unemployment
 Inflation

vii. National macroeconomic policy

 Fiscal policy, Monetary policy, Supply-side policy

viii. The International Economy,

 International trade, Trade restrictions, The world trading system and the WTO,
 The European Union and the Single Market

ix. The balance of payments

 The exchange rate, The growth of global financial flows
 Economic and monetary union in the EU
 International economic policy: managing the global economy
 Postscript: is globalization a ‘good thing’?

3. Teaching and learning methods

 Class room lectures

 Research Articles / Assignments
 Presentations & Individual Report
4. Student assessment methods
Midterms …………………………………. 30
Final ………………………………… 40
Assignments/CP ……………………………..… 10
Quizzes ……………………….………… 10
Presentations …………………….………….. 10

TOTAL 100
5. Recommended Texts:

 Business Economics, 1st Edition N. Gregory Mankiw, Mark P. Taylor, and Andrew Ashwin
 Sloman, J., & Jones, E. (2011). Economics and the business environment (3rd Ed.). Harlow:
Financial Times Prentice Hall. (SJ)
Website http://www.pearsoned.co.uk/sloman
 Harris, N. (2001), Business Economics; Theory and Application, Oxford, Butterworth
Heinemann. (HN)
 Harold Demsetz (1997), The economics of the business firm Seven critical commentaries,
Cambridge University Press.

6. Additional Readings:

 Mark Hirschey. (2009) Managerial Economics 12 th edition South Western Cengage

Learning
 Nick Wilkinson (2005) Managerial economics: a problem-solving approach,Cambridge
University Press
 Michael R. Baye (2014), Managerial Economics and Business Strategy, McGraw-Hill 8th
Edition. (MB)
http://highered.mheducation.com/sites/0073523224/student_view0/chapter1/chapter_overvi
ew.html