Economics and the Business Environment | My Assignment Tutor

Ulster University Ulster University Business School Module: Economics and the Business Environment ECO701 (CRN 90326 ) Academic Year 2020 – 21 Semester II Level 7 Retention of Information You are advised that you should retain this module booklet for future reference. You may be asked to provide documentary evidence of modules taken and their content by potential employers or in connection with an application to undertake further study. MODULE TITLE: Economics and the Business Environment MODULE CODE: ECO701 YEAR OF INTRODUCTION/ REVISION: 2018 MODULE LEVEL: 7 CREDIT POINTS: 15 SEMESTER: 2 MODULE STATUS: Compulsory LOCATION: Jordanstown and Magee E-LEARNING: Blended learning PREREQUISITE(S): None COREQUISITE(S): None MODULE CO-ORDINATOR(S): Tridimas, G (Ulster University). TEACHING STAFF Shaun Bisheswar (Module Leader) RESPONSIBLE FOR MODULE E–mail: Shaun[email protected] DELIVERY: Riz Pirzada (Module Lecturer) E-mail: [email protected] HOURS Lectures 24 hours Seminars 12 hours Private study 114 hours TOTAL EFFORT HOURS 150 hours ACADEMIC SUBJECT Economics Retention of Information You are advised that you should retain this module booklet for future reference. You may be asked to provide documentary evidence of modules taken and their content by potential employers or in connection with an application to undertake further study. RATIONALE This module examines the internal and external environments within which firms must operate and helps managers to audit their business environment so as to establish a strategic approach to their business activity. AIMS To introduce managers to the principles of economics as they apply to the business environment. The aim is to enhance mangers’ understanding of, and ability to adapt to, changes in the environments in which operate. LEARNING OUTCOMES Successful students will be able to: 1 Describe fundamental concepts in Economics, and understand the key elements of the economic environment, micro, macro and international, within which businesses operate 2 Analyze and assess developments that shape the business environment and the impact of these on managerial decision making 3 Appreciate and understand the economics underlying the decisions that business managers make and the effects of business decisions on a number of key stakeholders. 4 Apply economic reasoning to a range of business decisions and contemporary economic issues/problems CONTENT Business and the Economic EnvironmentThe Working of Competitive Markets – Demand, Supply and Market EquilibriumConsumer Behaviour, Estimating, Predicting and Stimulating Demand.The Supply DecisionThe Competitive Environment of the FirmThe Growth of the firmGoverning BusinessDomestic macroeconomics: Business Cycles, Growth, Inflation and Unemployment; National income and Fiscal Policy; Money and Monetary PolicyThe International Economy: Trade; Balance of Payments and Exchange rates TEACHING AND LEARNING METHODS Lectures/seminars are the primary method of knowledge transfer. Lectures will provide both an overview and analysis of the subject matter, as well as an opportunity for guidance relating to reading and related course materials. Seminars will enable students to review material covered in lectures, to engage in online interactive activities so as to test their knowledge and understanding of the topics covered in lectures, to develop their analytical skills through the application of economic theory to actual economic problems, current issues and case studies, and to prepare for assessment through study of relevant problems and questions. The Web based materials will provide students with a range of “interactive” materials designed to deepen their knowledge and understanding of key concepts and issues in economics. Students will have access to Blackboard Learn notes prepared in advance of the module and detailed reading lists per topic. ASSESSMENT AND FEEDBACK 100% Coursework The coursework will comprise two written assignments of up to 2000 words. These assignments will integrate major themes of the module and assess the quantity and quality of relevant knowledge; awareness of and ability to contribute to contemporary economic policy debate; the application and development of economic thought; and the quality of the argument pursued including understanding of the literature, critical and balanced thinking and clarity of presentation The assignments must be submitted electronically at the BlackBoard Feedback on assignments is provided by discussion in class and short comments on each essay returned READING LIST Useful textbooks which cover the same material Core text: Begg and Ward (2016) Economics for Business. 5th edition. McGraw-Hill: London. (330/BEG) Supplementary text: The Core Team (2017) The Economy, Oxford University Press Bade, R. and Parkin, M. (2011) Essential Foundations of Economics, London: Pearson Griffiths, A., Sloman, J. and Jones, E. (2011) Economics and the Business Environment. 3rd edition. London: Prentice Hall Sloman,J., Hinde, K. and Garratt D. (2010) Economics for Business. 5th ed. London: Prentice Hall. Please note that if a more recent / later edition is used, chapter numbers may have changed Electronic sources The Economist (www.economist.com ) The European Economic Review (access via ABI Global database– UU Library) The Financial Times (www.ft.com via UU Library) Harvard Business Review (access via Business Source Premier database – UU Library) Journal of Common Market Studies (access via ABI Inform– UU Library) Journal of International Business Studies (access via ABI-Global database via UU Library) OECD Economic Outlook http://www.oecd.org These and other journals can be accessed at: ABI-Global database; Business Source Premier and Emerald databases through the UU Library. Business Week (www.businessweek.com ) Financial Times (www.ft.com ) Economist (www.economist.com ) European Union http://www.europa.eu.int/index-en.htm NAFTA Secretariat http://www.nafte-sec-alena.org/ World Trade Organisation http://www.wto.org International Monetary Fund http://www.imf.org/ OECD http://www.oecd.org World Bank http://www.worldbank.org US Central Bank http://www.federalreserve.gov European Central Bank http://www.ecb.int Better Business Bureau http://www.bbb.org The use of Wikipedia and other such dubious sources of information is completely unacceptable! SUMMARY DESCRIPTION This module examines the internal and external environments within which firms must operate and helps managers to audit their business environment so as to establish a strategic approach to their business activity. It introduces managers to the principles of economics as they apply to the business environment and aims to enhance mangers’ understanding of, and ability to adapt to, changes in the environments in which operate Coursework 1(50% of Total Mark) Details on Coursework 1 can be found in the Assessment section of the Blackboard site for this module. Submission date: Essays must be submitted electronically at the Blackboard by 23:59 Sunday 11th July 2021 (week 7). Word Limit: 2000 words Plagiarism Plagiarism is the act of taking or copying someone else’s work, including another student’s, and presenting it as if it were one’s own. The University’s policy is that plagiarism, whether deliberate or unintentional, is a form of cheating and is unacceptable. The University has a plagiarism policy in place with the framework of penalties available at http://www.ulster.ac.uk/academicservices/staff/offences.pdf Exceeding the word limit Penalties for exceeding the word limit: Up to 10%: no penalty 11-20%: 10% deduction >20%: fail, with a mark of zero awarded Feedback Summative feedback will be provided within 20 working days of submission. Feedback and provisional marks can accessed via the submission link for the module. Please note that all modules go through a moderation process. Therefore all provisional marks are subject to change as part of the moderation process. The final ratified mark for the module will be confirmed via your Portal following review by the Exam Board. Coursework 2(50% of Total Mark) Details on Coursework 2 can be found in the Assessment section of the Blackboard site for this module. Submission date: Essays must be submitted electronically at the Blackboard by 23:59 Sunday 22nd August 2021. Word Limit: 2000 words Plagiarism Plagiarism is the act of taking or copying someone else’s work, including another student’s, and presenting it as if it were one’s own. The University’s policy is that plagiarism, whether deliberate or unintentional, is a form of cheating and is unacceptable. The University has a plagiarism policy in place with the framework of penalties available at http://www.ulster.ac.uk/academicservices/staff/offences.pdf Exceeding the word limit Penalties for exceeding the word limit: Up to 10%: no penalty 11-20%: 10% deduction >20%: fail, with a mark of zero awarded Feedback Summative feedback will be provided within 20 working days of submission. Feedback and provisional marks can accessed via the submission link for the module. Please note that all modules go through a moderation process. Therefore all provisional marks are subject to change as part of the moderation process. The final ratified mark for the module will be confirmed via your Portal following review by the Exam Board. Plan of LecturesWeek 1 – 2Introduction. Theory of Demand and ElasticityWeek 2 – 3SupplyWeek 3Market EquilibriumWeek 4Perfect Competition and MonopolyWeek 5Imperfect CompetitionWeek 6Firm Growth and Mid Semester RevisionWeek 7Market Failure and the Role of the GovernmentWeek 8Introduction to MacroeconomicsWeek 9 – 10Macroeconomic Equilibrium & Stabilisation PolicyWeek 11Inflation – Unemployment Trade–offWeek 12Exchange Rates and Revision Plan of Seminar Questions Week 2 Your university has an honors program that accepts exactly 40 freshmen each year. Every year before soliciting applications, students are informed of the standards for program participation. The admissions staff observed that whenever the difficulty of the program requirements increased (decreased), they received fewer (more) applicants than in the previous year and have since begun to adjust requirements for each incoming group of students in an attempt to equate the number of applicants with the number of spots in the program. Though the system is not perfect, the administrators are able to estimate their applicant pool relatively accurately. a. In this situation, what is the “price” that determines how many students will apply to the honors program? Also, assume that the people who run the honors program do not plan to expand or contract it. Depict the demand and supply curves that represent this situation. b. How does the way “price” is determined in this situation differ from the way we normally think about the determination of equilibrium price? c. Assume that applicants to the honors program are usually the most qualified students at the university. If the university began offering merit scholarships to incoming students, how would we expect the difficulty of the program to change over the next few years? Demonstrate your answer with a graph. d. The principal of the university became so impressed with the rigor of the first honors program that she decides to double its size. Assuming that the larger program accepts applicants in the same way, what will likely happen to the standards of the expanded honors program? Demonstrate your answer with a graph. e. Instead of expanding the first honors program, the faculty recommends introducing a whole new one. Suppose the first was an honors program in science. How would standards change for the science honors program if the new honors program were in math? How about art history? Explain your answers. Week 3 The demand for premium beer is summarized in the equation QD= 10000 – 1000P, where quantity is in bottles and price is in sterling pounds per bottle. How much would consumer welfare (as measured by consumer surplus) fall if a new tax on alcohol led breweries the price from £1 to £2? Week4: You act as an advisor to the Treasury and your economics team estimates that the demand for financial capital is highly elastic with respect of the price of capital as shown by the AT curve in the graph below, while the demand for housing is highly inelastic with respect to the house prices as shown by the curve BT The supply curves for capital and housing are identical and show by the horizontal line PEE The government sets a tax rate at PEPT in order to to raise a given tax revenue and asks your recommendation. Would you levy a tax on capital transactions or on house sales? Justify your answer Using the tools of demand and supply analyse how the move of the University of Ulster from Jordanstown to the Belfast City Centre to affect House rentals in BelfastHouse prices in JordanstownBelfast taxi fares Week 5 (6) Sally sells seashells by the seashore. When Sally prices her shells at £7 each, she sells 5 shells every day. When she prices her shells at £6, she sells 6. a. What is Sally’s total revenue when she chooses to sell 5 shells (by pricing at £7)? b. What is Sally’s total revenue when she chooses to sell 6 shells (by pricing at £6)? c. What is the marginal revenue Sally receives from deciding to sell a 6th shell? d. The 6th shell sells for a price of £6. Why is the marginal revenue from selling a 6th shell so much lower than £6? (7) A monopolistic seller of designer handbags faces the following demand curve: P = 50 – 0.4Q. The seller can produce handbags for a constant marginal and average total cost of £10. Calculate the profit-maximizing price for this seller.Suppose the government levies a £4 tax per unit on sellers of handbags. Calculate how this tax will affect the price the monopolist charges its customers. NB: Solving this requires the use of the following derivative rule: The derivate of the function Y = X2 with respect to X is 2X; (X2)’ = 2X (8) The graph below shows the Demand curve for an industry, DD, the associated Marginal Revenue, RR, and the Marginal Cost, MC, which is horizontal and hence equal to the Average Total Cost Identify the market equilibrium if the industry operates under perfect competitionIdentify the market equilibrium if the industry operates as a monopolyBy comparing the consumer and producer surpluses under the two different market structures show that the monopoly is inefficient Week 6 – Revision & Coursework surgery Week 7 (9) Why does a monopoly always operate on the elastic part of the demand curve? (10) People are always complaining about Facebook: It changed the way its news feed works, the privacy settings are awful, there are too many game notifications, and so on. Recognizing dissatisfaction with Facebook, Google tried three times to enter the social networking market, first with Buzz, then with Wave, and now with Google Plus. Users say that the Google Plus platform is far superior to Facebook’s, yet Google Plus appears to be failing. Explain why consumers might reject a superior product for an inferior one in a market like this. (11) Indicate whether the following is true or false, and explain your answer: It seems strange to the casual observer that bestselling novels sell for the same price as novels that are of much lesser quality (and much lower sales volume). Clearly, the publisher, who has a monopoly on the rights to such books, must not be accounting for the strength of demand for the books in question, and therefore is failing to maximize profit. Week 8 QUESTION 12 1. In the circular flow model, the source of the factors of production used to create goods and services is a. the product market. b. the resource market. c. firms. d. households. 2. In the circular flow model, firms use the money they earn from selling their goods and services to pay for the a. goods and services they buy on the product market. b. resources they buy on the product market. c. goods and services they buy from government. d. resources they buy in the factor market. 3. In the circular flow model, for every flow of goods, services, and resources there is a counter-flow of a. more goods, services, and resources. b. people from firms to households. c. people from households to firms. d. money. 4. In producing a sweater, a man who shears sheep pays a farmer $4 for a sheep. The shearing shop sells the wool to a knitting mill for $7. The knitting mill buys he wool and makes it into a fine fabric and sells it to a sweater-making firm for $13. The sweater-making firm sells the sweater to a clothing store for $20, and the clothing store sells the sweater, gift wrapped, for $50. What is the contribution to GDP of the previous sales transactions a. $4. b. $44. c. $50. d. $94. 5. Which of the following would be counted in GDP? a. the purchase of an historical house b. the purchase of a haircut c. the purchase of a government savings bond d. the value generated when you wash your car in your driveway 6. If private investment increased by $50 billion while GDP remained the same, which of the following could have occurred, all else being the same? a. Consumption spending decreased by $50 billion. b. Exports increased by $50 billion. c. Imports decreased by $50 billion. d. Net exports increased by $50 billion. 7. The four categories of expenditures that make up GDP are consumption, investment, a. exports, and government purchases. b. imports, and government purchases. c. net exports, and government purchases. d. net exports, and government transfer payments. 8. Real GDP is nominal GDP a. plus depreciation. b. adjusted for changes in the price level. c. minus depreciation. d. minus taxes. An economy produces only two goods, oranges and VCRs. The quantities and prices for the years 1998 and 1999 are shown in the table. The base year is 1998. 1998 1999 Price Quantity Price Quantity Oranges $2 5,000 $3 4,000 VCRs $400 1,000 $300 2,000 9. Nominal GDP in 1998 is a. $402. b. $12,000. c. $200,200 d. $410,000 10. Nominal GDP in 1999 is a. $18,000. b. $180,000 c. $612,000. d. $1,250,000. 11. Real GDP in 1998 is a. $6,000 b. $240,000 c. $410,000 d. $612,000 12. Real GDP in 1999 is a. $6,000. b. $410,000. c. $612,000. d. $808,000. Weeks 9 – 10: 1 Explain the meaning of inflation. 2 What is meant by aggregate demand? 3 Explain what is meant by aggregate supply 4 What are the conditions necessary for equilibrium in an economy? 5 Explain two factors that might affect the level of injections in an economy 6 What is the effect of an increase in injections on the level of national income? 7 Explain two factors that might lead to a decrease in aggregate demand. 8 Explain two factors that would increase the size of the effect of the multiplier. 9 What is the effect on national income if autonomous savings increase? 10 What is likely to happen to national income if aggregate demand exceeds aggregate supply? 11 Explain what is meant by a deflationary gap. 12 What is the economic cycle? 13 What is the difference between actual and potential growth? 14 Explain the difference between a boom and a recession. How might these stages affect a firm’s decisions? 15 Explain how a government might promote faster economic growth Week 11: (1) What factors cause inflation? (2) Why there is no unemployment – inflation trade-off in the long-run? (3) Why governments want to avoid deflation? (4) Use the macro-economic equilibrium diagram to show that both government spending and tax cuts increase total expenditure. In the light of the latter discuss whether the form of fiscal stimulus matters to the aggregate economy Week 12: 2nd coursework surgery & Discussion

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