Economics for Business Decisions

Syllabus

 ECONOMICS FOR BUSINESS DECISIONS

MODULE 1:   INTRODUCTION                                                                             

Introduction to Managerial Economics; The roles of the firm and the Household Decision Making in the Household - Consumer Choice.  Theory of Demand; its Determination, Estimation and Forecasting. Economic principles relevant to managerial decision making. Opportunity cost, production possibility curve, concept of increments and margin, discounting principle, Theory of business firm.

MODULE 2:   DEMAND ANALYSIS AND CONSUMER EQUILIBRIUM                   

Demand theory and analysis, Elasticity of Demand and its role in Managerial decision making, Demand forecasting, Techniques of Demand forecasting. Consumers Equilibrium: Cardinal utility approach, Indifference curve approach, Theory of revealed preference, Consumer surplus.

MODULE 3:   THEORY OF PRODUCTION                                                                 

Production function: Laws of variable proportions and Return to scale, Economies and diseconomies of scale, Isoquants and Isocost, optimum combination of inputs, Elasticity of substitutions.

MODULE 4: COST AND REVENUE CONCEPTS                                    

Cost and Revenue concepts: kind of costs, interrelationship of cost. Cost reduction and cost control, Short run and long run cost functions and Market Equilibrium, Revenue Concepts – Relationship between total, marginal and average revenue, significance of revenue curves, Relation between cost and revenue curves. Optimal Input Choice revisited: Cost Minimization vs. Output Maximization - Relation between SR and LR Costs - Economies of Scale in terms of Cost Function.

MODULE 5:   MARKET STRUCTURE AND EQUILIBRIUM                             

Characteristics of different market structure, Price determination and firm’s equilibrium under perfect competition, monopolistic competition, monopoly and oligopoly, price discrimination, international price discrimination and dumping, pricing methods. Theories of factor pricing, theories of interest and investment decisions.

MODULE 6:   MACROECONOMIC ANALYSIS                                                           

Indian Economic Environment: Measurement of National Income: Basic Concepts, Components of GDP- Measuring GDP and GNP, Difficulties in measuring National Income, Growth Rate.
Business Cycle – Features, Phases, Economic Indicators. Inflation: Types, causes, supply of money, fiscal and monetary Policy.