Economics For Managers - Dr. Kalika Bansal

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SBM-NMIMS: COURSE TEACHING PLAN

With Assurance of Learning components

Course Code

Course Title Economics for Managers

Course Dr. Kalika Bansal


Instructor/s

Credit Value 3
Programme MBA (DSA) - Trimester 1
& Trimester

Pre-requisite None
CLOs – (in bracket state the PLOs to map with)

CLO1- To establish basic understanding of micro economic concepts. (PLO2a)

CLO2 - To relate the conceptual understanding of these fundamental building


blocks with their real life applications to business decision-making. (PLO2b)

Learning CLO3 - To make the students develop an understanding of national and


Objectives international macroeconomic factors that may impact the businesses and be able to
critically analyze them. (PLO2b)

CLO4 - To enable students to take cognizance of these national and international


macroeconomic factors and incorporate the same in their business decisions
(PLO2b)

After completing the course, the student is expected to

1) Develop a basic understanding of Economic concepts, their application in


Learning
their day to day decision making at an individual, and at an organization
Outcomes
level.
2) Analyze the macroeconomic environment facing an organization.

Course An essential pre-requisite for any business enterprise be it large, small, profit-
Description making or non-profit-making is to understand the dynamics of the market and
hence to make the best of the opportunities given the various constraints. To take a
decision on what to produce, how to produce, at what cost to produce, how much
quantity to be produced etc. the manager of the enterprise needs to have a clear
understanding of the market. Business Economics is concerned with the application
of economic principles and methodologies to such business decision problems.
However, business enterprises and managers, in the course of their decision making
exercise more than often need to have an idea about the aggregate demand, interest
rates, price-levels & exchange rates situations etc. that are prevailing in the
economy. None of these variables are under the control of the enterprises or the
managers but any change in them has significant impact on the activity plans of the
enterprises. Macroeconomics is that branch of economics that deals with such
variables and their interrelationships and thus explains the way an economy
functions.

This course on Economics for Managers aims at providing the participants with an

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increased understanding of business decision making against the backdrop of
macroeconomic scenario of an economy. It will enable them to learn a variety of
techniques that will help them to solve various business problems relating to costs,
prices, revenues, profits, and competitive strategies as also enable them to have a
basic understanding of macroeconomics.

Specific assessment % AOL


methods / tasks Weightage Instrument Intended CLOs to be assessed
s
CLO 1 CLO 2 CLO 3 CLO 4
Class Participation
10 - - -
Evaluation
Pattern Quiz 1 Embedded
10  
questions
Quiz 2 10 
Group Assignment
20 Rubrics 
Embedded
Final Examination 40   
questions

Sessions Topics Chapter /article reference Cases / remarks


Pre-reads/ Articles/
Chapters
1 Introduction to economics: Reading: Lecture and Discussion
Micro and macroeconomics. Text- Chapter 1, pp: 39- 54
Individual’s economizing Chapter 2, pp: 65-77
problem: limited income and
unlimited wants.
Choice/tradeoffs.
Society’s economizing problem:
scarce resources. Factors of
production.
Economic systems: The
command economy and the
market system.
Characteristics of the market
system.
Five fundamental questions.
The ‘invisible hand’.
The demise of the command
system.
Economic cost of using
resources: The opportunity cost.
Explicit costs, implicit costs.
Economic profit versus
accounting profit

2 The Basics of Demand and Reading: Lecture and Discussion


Supply: Demand and supply; The Text- Chapter 3, pp: 84- 100
market mechanism; Changes in
market equilibrium

3 Applications of Demand and Reading: Case Discussion: The Economics


Supply. Text- Chapter 3 Appendix, pp: of U.S. Farm Support Programs
105 - 109 (Source: Dominick Salvatore, pp:
Government interventions in the

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Sessions Topics Chapter /article reference Cases / remarks
Pre-reads/ Articles/
Chapters
market: Ceiling and Floor prices 37-39)

Discussion: Diesel and Kerosene


prices in India

4 Elasticity of Demand and supply: Reading: Lecture and Discussion


Text- Chapter 4, pp: 111- 125
Elasticity of Demand - Price
Elasticity, Income Elasticity and
Cross Price Elasticity, After class self-activity: hands on
Determinants of elasticity of exercise on elasticity (feedback to
demand; Elasticity of supply and be given in session 5)
its determinants

5 Production and cost: Reading: Discussion/Feedback on the after


Text - Chapter 10, pp: 244-256 class self-study activity assigned in
Businesses and the costs of the previous session
production: Short run production
relations and costs. Case Discussion: Don’t cry over
sunk costs (Source: Text, pp:262-
263)

6 Production and cost: Reading: Case Discussion: Returns to Scale


Text - Chapter 10, pp: 256-261 in the Carpet Industry (Source:
Businesses and the costs of Pindyck & Rubinfeld, pp:167-168)
production: Long run production
relations and costs.

7 Market structures: Four market Reading: Case Discussion: Fixed costs:


models. Text - Chapter 11, pp: 267-278 Digging yourself out of a hole
(Source: Text, pp: 281)
Pure competition in the short run:
profit maximization

8 Market structures: Reading: Lecture and Discussion


Text - Chapter 12, pp: 285-293
Pure competition in the long run.
Pure competition and efficiency.

9 Market structures: Reading:


Text - Chapter 13, pp: 298-315 Case Discussion: De Beers
Pure monopoly: Barriers to entry. Diamonds: Are monopolies
Output and price determination. forever? (Source: Text, pp:316)

10 Market structures: Reading: Lecture and Discussion


Text – Chapter 14, pp:320-
Monopolistic competition: Price, 337
Output determination, Excess
Capacity

Introduction to Oligopoly

11 Introduction to macroeconomic Reading: Lecture and Discussion


environment of Business Sloman John and Mark
Sutcliffe, Chapter 26, pp: 575-
Macroeconomic objectives, 600
Economic Growth,
Unemployment, Inflation,

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Sessions Topics Chapter /article reference Cases / remarks
Pre-reads/ Articles/
Chapters
Business cycle and
macroeconomic objectives, The
circular flow of income.

12 National Income Accounts: Reading: Lecture and Discussion


Text – Chapter 27, pp: 589-
Measuring Domestic Product and 604 After class self-activity: Case:
National Income: GDP, GNP, Real Beyond GDP: The Need for New
and Nominal GDP, National Measures of Progress (Source:
income, Other National Accounts. Boston University Papers)
GDP Deflator, Income and
welfare. Omissions in the
measurement of aggregate income.

13 Economic Growth: Reading: Discussion: Economic Growth in


Text – Chapter 28, pp: 609- India vs Economic Growth in China
Factors promoting modern 627
economic growth-supply factors,
demand factor, efficiency factor,
institutional set up, labor
productivity. Economies of Scale
and Resource Allocation.

14 Growth Instability: Reading: Lecture and Discussion


Text – Chapter 29, pp: 630-
Business Cycles, Unemployment, 647 After class self-activity: Readings
Inflation on inflation and unemployment in
India

15 Basic Macroeconomic Reading: Lecture and Discussion


relationships Text – Chapter 30, pp: 651-
666
Income-consumption, income-
saving and interest rate –
investment. The multiplier effect.

16 Introduction to Keynesian Reading: Lecture and Discussion


Economics and the role of fiscal Text- Chapter 1, pp: 671- 687
stimulus: Chapter 32, pp: 693-704 Application: The Recession of
2007-2009 (Source: Text, pp: 687,
The Aggregate Expenditures 689)
Model – C+I+G+NX

Deriving the Aggregate Demand


Curve from the Aggregate
Expenditure Model.

Aggregate Supply model.

17 Fiscal policy Reading: Discussion: Recent US Fiscal


Text- Chapter 33, pp: 717- Policy
Fiscal policy: expansionary and 721
contractionary Shyamal Roy- Chapter 4, pp: Discussion: Budget, Fiscal deficits
104-141 and Public debt in India

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Sessions Topics Chapter /article reference Cases / remarks
Pre-reads/ Articles/
Chapters

18 Introduction to money Reading: Lecture and Discussion


Text- Chapter 34, pp: 739-
Functions of Money, Money 747
creation, Fractional reserve system Chapter 35, pp: 759-771
and money creation by banks

19 Money demand, interest rate Reading: Discussion: India’s Monetary


determination and monetary Text- Chapter 34, pp: 774- Policy
policy 793
Discussion: Recent US Monetary
Policy

20 Introduction to open Reading: Lecture and Discussion


macroeconomics: Trade, exchange Text- Chapter 6, pp: 152- 160
rate, Balance of Payments Chapter 7, pp: 178- 191

Course synthesis

Reading List Prescribed Text book: McConnell, Brue and Flynn, Economics, 19e edition, Mc Graw Hill
and Publication
References
References

1. Pindyck Robert, Daniel Rubinfeld, Prem Mehta, Microeconomics, 7th edition, Pearson

2. Salvatore Dominick: Principles of Microeconomics,5th Edition, Oxford.

3. John Sloman and Mark Sutcliffe, Economics for Business, Third Edition, Pearson.

4. Shyamal Roy, Macroeconomic Policy Environment, 2e, Mc Graw Hill Publication

Prepared by Faculty Team Recommended by Recommended by


Area Chairperson Program Chairperson
Dr. Kalika Bansal

Approved by Faculty Approved by Approved by Dean SBM


Chair AOL Associate Deans

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