BS1102 ECONOMIC ENVIRONMENT OF BUSINESS

Module Number: Title of Module: BS1102 Economic Environment of Business 10

Number of Aston Credits:

Total Number of ECTS Credits: 5 Staff Member Responsible for the Module: Dr Chris Jones Economics & Strategy Group South Wing, Room 1020a, Extension 3036 Email: c.jones2@aston.ac.uk Availability: Office hour appointments can be booked using the online booking system: https://wass.aston.ac.uk/wass/pages/login.page.php Please just search for my name. Appointments are limited to 10 minutes, if there is space available this can be extended. I would highly encourage students to come in groups if they wish. Other Staff Contributing to the Module Include: TBC Pre-Requisite(s) for the Module: None Module Learning Outcomes: Upon successful completion of the module students will be able to: (1) Appreciate economic concepts, relationships and economic policy and why they are important to the business environment. (2) Describe and illustrate the differences between Microeconomics and Macroeconomics. And an appreciation of the different schools of thought in the later. (3) Explain why economists use economic models to help understand the complexity of much economic phenomenon. (4) Evaluate, analyse and put into practice economic models in both Microeconomics and Macroeconomics (5) Critically understand and evaluate the workings of an advanced mixed economy such as that of the United Kingdom.

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Module Content: Microeconomics 1. Introduction (week 15) Module arrangements, aims, approach to teaching and learning, parameters. What is economics. Some history Scarcity and opportunity cost. Friedman vs. Galbraith: video Government vs. The Market 1st Economic model: Demand & Supply 2. Part 1: Demand & Supply Responsiveness (week 16) Price elasticity of demand, elasticity and total revenue, cross price elasticity of demand, income elasticity of demand, elasticity of supply. Part 2: An Introduction to the Theory of the Firm (week 16) Short run vs. long run The firm as a black-box Profit Maximisation Cost & Revenue The Shut-down rule Long-run average cost 3. Market Structure 1: Perfect Competition & Monopoly (week 17) Perfect Competition Monopoly Joseph Schumpeter 4. Market Structure 2: Imperfect Competition (week 18) Monopolistic Competition Oligopoly Kinked Demand Curve Game Theory Summary of Market Structure 5. Market Failure (week 19) Equity & Efficiency Competitive Equilibrium: Marginal Private Cost and Benefit. Examples of Market Failure Externalities Public Goods Aymmetric Information Moral Hazard Adverse Selection

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BS1102 ECONOMIC ENVIRONMENT OF BUSINESS

Macroeconomics 1. Introduction to Macroconomics (week 20) The Circular Flow of Income (Simple) The Output, Income and Expenditure measures of GDP. The Circular Flow of Income (Advanced) Economic growth: A simulation The Business cycle 2. The Keynesian Model (week 21) John Maynard Keynes The Circular Flow re-cap Aggregate Demand The Consumption Function The equilibrium level of output: The 45 degree line. The multiplier. Paradox of Thrift Demand Management: Fiscal policy & Monetary Policy. 3. Money and Banking (week 22) The functions of money How banks create money The money multiplier Different measures of money How Central Banks control the rate of interest. Why Central Banks control the rate of interest Quantitative Easing Modeling the Money Market The Monetary Transmission Mechanism The Costs of inflation The Exchange Rate 4. AD and AS Analysis (week 23) AD with flexible prices and wages Short rum aggregate supply. Long run aggregate supply. Applying the model: (1) Credit Crunch; (2) Stagflation. Economic Schools of Thought Unemployment 5. The Global Economy (week 24) Globalisation Foreign Direct Investment International Trade Ricardos Theory of Comparative Advantage Trade Policy Revision
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International Dimensions: While much attention will focus on the UK economy, the module offers an appreciation of the workings of any mixed enterprise economy. Specific international dimensions include a consideration of the current developments in the World Economy. Corporate Connections: Efforts are made, through mini case studies, to apply relevant economic concepts to real life business situations. Links to Research Various parts of the course, particularly the lectures on economic growth and international trade will link in with Dr Chris Joness research Learning and Teaching Rationale and Methods Ten two-hour lectures, (weeks 15-24), and five fortnightly seminars (weeks 1524) The lecture programme introduces students to key concepts, and indicates the appropriate areas for further study. The seminar programme provides an opportunity for students to clarify, reinforce, and extend their understanding of the subject. Seminars will focus on the most challenging aspects of the course and will be very relavant for the essay component of the exam. How are the 100 Learning Hours per Module Achieved? Contact time Private Study Mid-term Quiz Exam Total Ethical Approval: This module does not require any primary research and no ethical approval will be necessary. Assessment and Feedback Rationale and Methods Assessment is 100% based on a closed book 2 hour examination in term 3. The examination will comprise a multiple choice test worth 40%, with 40 multiple choice questions. 20 questions will be on Microeconomics and 20 questions will be on Macroeconomics. The remaining 60% consists of 2 essays. 1 essay will be
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25 hours 70 hours 3 hours 2 hours 100 hours

BS1102 ECONOMIC ENVIRONMENT OF BUSINESS

on Microeconomics (30%) and 1 essay will be on Macroeconomics (30%). There will be a choice of two essays for Microeconomics and a choice of two essays for Macroeconomics. So in total there will be 4 essay questions on the exam paper in which students will do 2. The multiple choice test is designed to assess the range of student knowledge and understanding of the subject, including the students appreciation of key issues in the module, and their ability to apply them. The essay questions are designed to assess the students ability to analyse various economic phenomenon and to enhance their report writing skills. In addition to the formal assessment there will also be an online quiz posted on Blackboard during Week 22. This will be comprised of 30 multiple choice questions. The quiz will enable students to get detailed feedback from their answers and it will help as a revision tool.

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