Close
BEM-V07
(PGCBM 2007-08 : Term-I)

BASIC ECONOMICS FOR MANAGERS

Course Outline

Faculty: Prof. Latha Ravindran



“As you begin your journey into the land of markets, it would be understandable if you are somewhat anxious. But take heart. The fact is that we envy you, the beginning student, as you set out to explore the exciting world of economics for the first time. This is a thrill that, alas, you can experience only once in a life time. So as you embark, we wish you a bon voyage!”
Paul A. Samuelson & William D. Nordhaus


I. Prelude:

Economics is the study of how societies use scarce resources to produce commodities and services and distribute them among different people. There are two main branches of economics, namely, micro and macro - economics. Micro- economics analyses the behavior of individual entities such as a consumer, a producer, a product, a firm, a market and so on; whereas, macro - economics is a study of aggregates and analyses the functioning of an economy as a whole. These aspects are dealt in Part A and Part B respectively, in this course. Both micro and macro - economic theories establish certain sets of important guidelines and principles for business practices. Therefore it is necessary for the participant to acquaint oneself with the basic tools of analysis in economics.

II. Course Objectives:
· To enable the participants to develop a familiarity with the fundamentals of micro and macro-economic principles; understand the complexities and implications of fluctuations; relate such changes to changes in the business environment and imbibe the ability to grasp and analyse the policy implications.
· It is intended that the participants would receive a complete and rigorous introduction to basic principles of both micro and macro economics.
· To provide certain practical insights and demonstrate that application of economic theories can enhance the decision-making skills of the executives.
It is hoped that the analytical inputs imparted through this course will increase the effectiveness of decision making by sharpening the understanding of principles of micro as well as macro economics.

Thus, a working knowledge of the principles of economics can increase the value of the company as well as the manager!!
III. Course Contents:

PART -A:

Topic 1: (2 sessions)
Demand Analysis for Decision-making
Determinants of Demand
Empirical demand function
Law of Demand
Elasticity of Demand
Demand estimation
Utility analysis

Topic 2: (1 session)
Production Analysis for Decision-making
Total product, Average product and Marginal product
The three Stages of Production
Laws of Returns to scale
Empirical Production Function

Topic 3: (1 session)
Cost Analysis for Decision-making
Short run cost functions
Total cost, total fixed cost and total variable cost
Average cost, average fixed cost, average variable cost and marginal cost
Economies and Dis-economies of scale

Topic 4: (1 session)
Break Even Analysis & Profit Analysis
Break even output and capacity
Contribution margin
Conditions for profit maximisation

Topic 5: (2 sessions)
Pricing Strategies and Market Structures
Perfect Competition
Monopoly
Monopolistic Competition
Oligopoly


PART -B:

Topic 1: (2 sessions)
Overview, Gross National Income and Product
Resources of an economy
Two-sector model of circular flow of economic activities
Approaches to estimating GNP
Related indicators
Deflating for inflation
Is GNP a measure of society’s well being?

Topic 2: (1 session)
Macroeconomic models – the Classical Approach
Say’s law of markets
Full employment equilibrium
Critical appraisal of the model

Topic 3: (1 session)
Macroeconomic models – the Contemporary Approach
Effective demand
Consumption function
Investment function
Multiplier and Accelerator
Determination of rate of interest

Topic 4: (1 session)
Business Fluctuations: What and Why?
Phases of business cycles
Business cycle theories
Case analysis of various phases of business cycles

Topic 5: (2 sessions)
Some Salient Features of Money, Banking, Govt. and International Trade
Money: Definition and composition
Money: Definition and composition
Principles behind the issue of paper currency
Measures of credit creation and control
Social goods and redressal of spill over effects
Sources of revenue: where does the money come from?
Public expenditure: where does the money go?
Budget at a glance: learn to read in between lines
Theories of absolute and comparative advantage
Balance of Payments in a double entry book-keeping sense
Measures to check imbalances in Balance of Payments

IV. References:

A textbook and a complied reading material are being provided for basic reference for Part –A and Part – B respectively. Topic-wise books for reference will be given in the class whenever needed. All of these have to be supplemented by additional readings. Besides the text books, reading the business related articles, reports and so on, published in periodicals, journals, news magazines and websites, is a key requirement for the course. In addition, cases, articles, questions for discussion and practice, etc., will be provided in the course web.

V. Evaluation:
Sl. No.
Components of Evaluation
Weights
1
Quizzes (Part – A)
20%
2
Quizzes (Part – B)
20%
3
Assignment (Part – A)
15%
4
Term paper (Part – B)
15%
5
End term Examination
30%

VI Submission of Assignment and Term-paper:

The assignment as well as term paper has to be written individually. The assignment, which pertains to Part -A of the course would consist of a set of problems. The term paper which pertains to Part -B of the course will be written on a topic chosen from amongst a list of topics that will be displayed in the course web.

VII: Contact Details:

E-mail ID: lata@ximb.ac.in
Created By: Bijoy Kar on 10/12/2007 at 04:52 PM
Category: PGCBM Doctype: Document

...........................