At the end of the course the students
should be able to account for the following concepts and theories
and demonstrate their application to business and public policy
issues:
- The method, paradigm and concepts of economics, including what
is a firm, a good, a market, efficiency, equilibrium, and gains
from trade and division of labour.
- The concepts and analytical tools of supply, demand, and
elasticity and how changes in underlying conditions such as cost
structures, preferences and public policy affect prices,
quantities, and the distribution of benefits and costs.
- The notions of market failures relating to externalities,
public goods, resource depletion, and climate change, and the scope
for overcoming them with public policy.
- The underlying conditions for alternative industry structures
(monopoly, competition, etc.), their implication for welfare and
efficiency, and the scope for public policy to regulate them.
- The forces determining the demand and supply of labour using
basic analytical tools.
- The notion of risk, choice under uncertainty, and value of
information, and how it relates to the workings of financial asset
markets and affects economic interaction and coordination at a
basic level.
- The concepts, tools, and insights from organisational
economics, including transaction cost economics, principal-agent
theory, game theory and strategic behavior at a basic level.
- The notions and insights from the economics of strategy at a
basic level.
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Microeconomics provides an introduction to the methodology,
perspective, analytical style, and main theoretical insights of
economics as it applies to individual to organisations, industries,
and markets. By way of introduction, the course starts with an
investigation of what a firm is, and how firms evolve over time,
and basic accounting notions of costs, revenue, profits, assets and
liabilities. Then it moves to the methodology, concepts and
theories from classical economics, such as efficiency, division of
labor and gains from trade, consumer choice and demand, cost
structure and supply, market equilibrium and elasticity of supply
and demand, market structure and competition, welfare, labour
markets, externalities and public policy (particularly issues
related to climate change), and the economics of risk and
information, The last part of the course introduces modern
microeconomics such as transaction cost economics, agency theory,
behavior theories of the firm, game theory. It concludes with a
basic introduction to the concepts and insights from the economics
of strategy which will serve both as a concluding element for the
microeconomics course and as a preview of later courses in business
administration and strategy.
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- [MT]: Mankiw, NG; Taylor, MP (2008) Economics (5th
European ed.), South-Western,
ISBN 978‑1‑84880‑133‑6. (Also used in the Macroeconomics
course)
- [DS]: Douma, S; Schreuder, H (2008) Economic Approaches to
Organizations (4th ed.), Prentice-Hall,
ISBN 978‑0‑273‑68197‑4. (Also used in the Managerial Economics
course, 3rd semester, ASP programme)
- Companion on-line material for the Mankiw textbook.
Additional notes uploaded by the teachers.
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