MGT4209 ECONOMICS FOR MANAGEMENT L T P C

Version 1.1 Latest Approved 2 0 0 2

Catalog Description
In this course the students are introduced with various concepts of economic science that
relates to decision making process in management of business organization. To begin with,
introductory concepts of economic theory and their implications on managerial decision
process are analyzed. Thereafter concepts related to demand analysis, demand forecasting
supply analysis, and equilibrium market conditions are discussed in detail. The next phase
deals extensively concepts related to production theory, cost theory and revenue aspects.
Third, various concepts related to market structure are discussed in detail. Finally, various
macroeconomic concepts, policy perspectives of government and other institutions are
explored in detail. The overall aim of this course is to make the students familiar with
working knowledge of economic decision process based on rational choice approach in
workplace.

Course Objectives:
The objective of this course is to:
1. Introduce to students theoretical concepts of economic science so that they can analyze
situations and improve upon their managerial decision process in workplace.
2. Provide students with meaningful exposure about the micro and macro level variables and
government policies that influence business operations and strategies of the firm under
dynamic business environment in an increasingly globalized and integrated business
architecture.

Course Outcomes
On completion of this course, the students will be able to:
CO1: Explain basic concepts of economic analysis, demand and supply dynamics, demand
forecasting techniques and their application, and analyze the working of free market
mechanism and appreciate how forces of demand and supply reinforce each other for
attaining market equilibrium.
CO2: Analyze rationally the dynamics of production and cost aspects in order to make a
holistic assessment of the complexities inherent in production system.
CO3: Describe the various forms of market structure and their implications in managerial
decision process.
CO4: Discuss holistically the various macroeconomic aspects of business, economic
variables affecting business operations, and implications of government policies in shaping
the dynamics of business environment.
Blooms Number
Modules
level* of Hr
MODULE 1: Introduction to Managerial Economics, Demand
L1, L2,
Analysis and Demand Forecasting: 7
L4, L5
Introduction to Managerial Economics: Meaning and Nature of
Managerial Economics, Significance of Managerial Economics, Scope
of Managerial Economics. Demand Analysis: Meaning of Demand,
Determinants of Demand, Individual and Market Demand Functions,
Individual and Market Demand Curves, Law of Demand, Exception of
Law of Demand. Elasticity of Demand: Types of Elasticity of Demand,
Significance of Elasticity of Demand. Demand Forecasting: Purpose of
Demand Forecasting, Steps Involved in Forecasting, Determinants of
Demand Forecasting, Methods of Demand Forecasting.
MODULE 2: Theory of Supply, Production, Cost and Revenue
Analysis:
Supply: Law of Supply, Determinants of Supply, Shift of Supply and
Change in Supply, Elasticity of Supply, Kinds of Elasticity of Supply,
Determinants Elasticity of Supply. Theory of Production: Meaning of
L1, L2,
Production, Short –run Analysis of Production, Law of Variable
L4, L5, 11
Proportion, the Three Stages of Production, Returns to Scale. Analysis
L6
of Cost: Cost and Managerial Decision-making, Types of Cost, Cost
Function, Relationship between Production and Cost, Short Run Cost
Function, Long Run Cost Function, Relation between Short-run and
Long-run Cost Curves, Economies of Scale. Break-Even Analysis.
Concept of Revenue.
MODULE 3: Market Structure and Price Determination
Perfect Competition: Introduction of Perfect Competition,
Characteristics of Perfect Competition, Demand Curve of Firm and
Industry, Equilibrium of the Firm in the Short Run and Long Run.
Effects of Tax Imposition under Perfect Competition. Monopoly:
Assumptions, Causes of Monopoly, Demand, Average Revenue and
L1, L2,
Marginal Revenue of a Monopolistic, Profit Maximization Price 8
L3, L4
Determinants of the Monopolist in Short-run and Long-run. Measures of
Monopoly Power. Monopolistic Competition: Assumptions, Product
Differentiation, Demand Curve, Equilibrium of the Firm in Short-run
and Long-run, Selling cost and Monopolistic Competition. Oligopoly:
Assumptions, Non-collusive Oligopoly and Collusive Oligopoly,
Kinked Demand Curve Analysis.
MODULE 4: Macroeconomics Analysis
National Income: An Indicator of Economic Activity, The Parameters
that Influence Level of Economic Activity. Business
Cycles: Characteristics of Business Cycle, Phases of Business Cycle, Ill
Effects of Business Cycles, General Measure to Control Business
Cycles.
The Role of Government in Market Economy and Strategic Business
Implications: Rationale of Government Intervention, Government L1, L2,
Macroeconomic Policy Measures – GST, Demonetization – and their L3, L4, 10
impact on Business; Macro Economic variables and their functional L5, L6
relationship; Economic Functions of Government in a Market Economy,
Legal and Social Framework, Restraining Unfair Competition and
Increasing Market Power, Reallocation of Resources in the Presence of
Externalities, Redistribution of Income, Regulation of Natural
Monopoly, Stabilization of Economy;
Macroeconomic Variables affecting Business: Consumption Function,
Saving Function, Investment Multiplier; Transaction, Precautionary,
Speculative Demand for Money; Liquidity Preference; Components of
Money Supply; Fiscal Policy & Monetary Policy and their implications
on business and management; Inflation and Deflation - Demand pull
and Cost push inflation; Government policies to control inflation.
International Trade Regime and its implications on Business: GATT,
World Trade Organization, Regional Trade Agreements – EU, NAFTA,
ASEAN, SAFTA, MERCUSOR.
*Bloom’s Level: L1-Knowledge; L2-Comprehension; L3-Application; L4: Analysis;
L5:Synthesis, L6:Evaluation

Text Books
1. Thomas, Christopher R., S. Charles Maurice, Sumit Sarkar, Managerial Economics, 9th
Edition, Tata McGraw Hills.
2. Samuelson, Paul A., and William Nordhaus, Economics, 19th Edition, McGraw Hills
India Pvt. Ltd.
3. Krugman, Paul and Maurice Obstfeld (2008), International Trade Policy, Pearsons.
4. Salvatore, D (2010), Managerial Economics, Oxford University Press

Reference Books
1. Peterson, H.C and Lewis, W.C. (2005), Managerial Economics, Prentice Hall of India
2. Bhattacharya, Govind and Debasis Bhattacharya. (2018), GST and Its Aftermath: Is
Consumer Really the King, SAGE Publications.
3. Gupta, G.S. (2006), Managerial Economics, Tata McGraw Hill
4. Mishra, S.K., and V.K. Puri. (2009), Indian Economy, Himalaya Publishing House.

Modes of Evaluation: Quiz/Assignment/ Seminar/Written Examination

Examination Scheme:
Components A CT S/V/Q HA EE
Weightage (%) 5 15 5 5 70

CT: Class Test, HA: Home Assignment, S/V/Q: Seminar/Viva/Quiz, EE: End Semester
Examination; Att: Attendance
CO, PO and PSO mapping
PO1 PO2 PO3 PO4 PO5 PO6 PO7 PO8 PO9 PSO1 PSO2 PSO3 PSO4
CO1 1 1 2 -- -- -- -- -- 2 1 1 -- --
CO2 1 1 2 -- -- -- -- 2 -- 1 1 -- --
CO3 1 1 2 -- -- -- -- -- -- 1 1 2 2
CO4 1 1 1 -- -- -- 2 2 2 1 1 2 2
1: strongly related, 2: moderately related and 3: weakly related