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Course Description
This course applies economic concepts to make management decisions. Students employ the concepts of scare resources and opportunity costs to perform economic analysis. Other topics include supply and demand, profit maximization, market structure, macroeconomic measurement, money, trade, and foreign exchange.
Course Topics & Objectives
Week One
:
The Basic Concepts for Economic Reasoning
·
Analyze how economics explores the use of scarce resources and forces choice among alternatives.
· Explain the economizing problem and the models used in economics.
· Analyze how the laws of supply and demand determine equilibrium price and quantity.
Week Two
:
Cost Concepts & Profit Maximization
· Differentiate the costs of production in a firm.
· Explain profit maximization principles in a purely competitive market.
· Apply incremental cost and contribution analysis to make a business decision.
Week Three
:
Market Structure & Strategic Choice
· Differentiate among the pure competition, monopolistic competition, oligopoly, and monopoly market models.
· Describe pricing and non-pricing strategies in monopolistic competition, oligopoly, and monopoly market models.
· Describe the role of technology, R&D, and efficiency within the market models.
Week Four
:
Macroeconomic Measurement & Basic Concepts
· Explain the concepts and measurement of Gross Domestic Product (GDP).
· Analyze the trends and cycles of real GDP growth in business cycle.
· Analyze the causes and remedies of unemployment and inflation.
· Analyze the basic macroeconomic relationships.
Week Five
:
Money, Creation & Control and Monetary Policy
· Explain the concepts of money and interest rates.
· Explain how banks create money.
· Evaluate the effectiveness of the central banks monetary policy in stabilizing the economy.
Week Six
:
Global Context: Business Beyond National Borders
· Explain the concept of comparative advantage and its recommendation for specialization.
· Explain the effects of barriers to free trade and the reasons countries impose them.
· Explain how the foreign exchange market works and how exchange rate risk is managed.
Course Materials
McConnell, C. R. & Brue, S. L. (2004). Economics: Principles, problems, and policies (16th ed.). New York: McGraw Hill/Irwin.
Pugel, T. A. (2007) International Economics (13th ed.). New York: McGraw Hill/Irwin.
Weekly Point Values
Individual Assignment: Quizzes
2Individual Assignment: Scenario Concept
5
Individual Assignment: Quizzes
2Learning Team Assignment: Scenario Analysis
8
Individual Assignment: Cost Scenario
8
Individual Assignment: Simulation Analysis10
Individual Assignment: Interest Rate Report
18
Learning Team Assignment: International Paper
20
All Weeks
Participation & Discussion Questions
24
Point Total
100
Grading Criteria
|
100-95 |
76-74 |
|
94-90 |
73-70 |
|
89-87 |
69-67 |
|
86-84 |
66-64 |
|
83-80 |
63-60 |
|
79-77 |
59 or less |
Week One The Basic Concepts for Economic Reasoning· Analyze how economics explores the use of scarce resources and forces choice among alternatives.· Explain the economizing problem and the models used in economics.· Analyze how the laws of supply and demand determine equilibrium price and quantity.
Course Assignments
1. Readings
· Read objectives and welcome.
· Read this week’s Electronic Reserve Readings.
· Read Ch. 1-3, & 20 of Economics
.
2.
Individual Assignment: Scenario Concept
· Resources: Will Bury’s Price Elasticity Scenario
· Read the University of Phoenix Material – Will Bury’s Price Elasticity Scenario.
· Write a 350- to 700-word paper explaining the economic concepts found in the reading assignment.
· Discuss how the course readings relate to the context of the scenario. Be sure to include citations and references where appropriate.
3. Individual Assignment: Quizzes
· Visit the MBA Web Prep for Economics site at:
http://cwx.prenhall.com/bookbind/pubbooks/uop_casefair/
· Complete Quizzes 1 & 2.
· Submit the results to your faculty member.
Week Two Cost Concepts & Profit Maximization · Differentiate the costs of production in a firm.· Explain profit maximization principles in a purely competitive market.
· Apply incremental cost and contribution analysis to make a business decision.
Course Assignments 1. Readings
· Read Ch. 22-23 of Economics; and the University of Phoenix Material – Opportunity Cost.
· Read this week’s Electronic Reserve Readings.
2. Activities
· Simulation: Cost and Revenue Curves
o Complete the simulation
Economics for Managerial Decision Making: Cost and Revenue Curves.
o Write a 1 page summary about the simulation.
3. Individual Assignment: Quizzes · Visit the MBA Web Prep for Economics site at: http://cwx.prenhall.com/bookbind/pubbooks/uop_casefair/
· Complete Quizzes 3, 4, & 5.
· Submit the results to your faculty member.
4.
Learning Team Assignment: Scenario Analysis
· Review the University of Phoenix Material – Will Bury’s Price Elasticity Scenario introduced in Week One. You may also use information from your own organization. If you use your own organization, get approval from your instructor before proceeding.
· Prepare a 350- to 700-word report where you explain the following concepts in the context of the Will Bury scenario:
o The effect on revenue when there is a change in price (assuming competitors do not follow)
o Estimate the elasticity of demand in your scenario using either the arc method of elasticity or base your estimate on the number and closeness of substitutes (including foreign substitutes)
o Justify your estimate of the elasticity
Week Three Market Structure & Strategic Choice · Differentiate among the pure competition, monopolistic competition, oligopoly, and monopoly market models.· Describe pricing and non-pricing strategies in monopolistic competition, oligopoly, and monopoly market models.· Describe the role of technology, R&D, and efficiency within the market models. Course Assignments 1. Readings
· Read Ch. 23-26
of Economics
· Read this week’s Electronic Reserve Readings.
2. Individual Assignment: Cost Scenario
In this assignment, make a decision whether to accept an order for a product which requires displacing another product from production. This employs contribution analysis, opportunity cost, and cost concepts. The University of Phoenix Material – ClearHear Scenario
provides a problem statement, opportunities, and end state goals.
· Resources: ClearHear Scenario
· Write a 350- to 700- word report where you explain the following in the context of the scenario:
o Identify alternative solutions to meet the end-state goals
o Analyze and evaluate the alternatives that you identified
o Perform risk analysis to identify potential risks and negative consequences of the alternative solutions
o Make a recommendation of the best alternative solution and explain how it best meets the desired end state
Week Four Macroeconomic Measurement & Basic Concepts · Explain the concepts and measurement of Gross Domestic Product (GDP).· Analyze the trends and cycles of real GDP growth in business cycle.· Analyze the causes and remedies of unemployment and inflation.· Analyze the basic macroeconomic relationships. Course Assignments 1. Readings
· Read Ch. 7-9 of Economics
· Read this week’s Electronic Reserve Readings. 2. Activities
· Visit the U.S. Bureau of Economic Analysis (BEA) at
http://www.bea.gov/. Use this site as a resource for Weeks 4, 5, & 6.
3.
Individual Assignment: Simulation Analysis
Using the link provided on Week Four of the rEsource page, access and complete the simulation, Economics for Managerial Decision Making: Market Structures.
· Resources: Economics for Managerial Decision Making: Market Structures simulation
· Write a 700- to 1,050- word
paper where you explain the following in the context of the simulation:
o Create a solution using strategic variables available to you to sustain the economic profits the firm can earn.
o What are some of the pricing strategies that you would recommend?
o What are some of the non-pricing strategies that you would recommend?
o What kind of innovations would you propose to sustain the organization’s uniqueness?
5.
Individual Assignment: Quizzes
· Visit the MBA Web Prep for Economics site at:
http://cwx.prenhall.com/bookbind/pubbooks/uop_casefair/
· Complete Quizzes 6 & 7.
· Submit the results to your faculty member.
4. Learning Team Instructions: Big Drive Auto
· Resources: Review the scenario contained in the University of Phoenix Material – Big Drive Auto
which you use in your assignments for Week Five and Six. This Scenario enables you to relate an organization’s operations and planning to macroeconomic data.
· Identify how these relationships can help Big Drive Auto to plan better. Begin working on this assignment during Week Four, and submit it in Week Six. If you want to use your own organization’s data, get the
approval from your instructor before proceeding.
Week Five Money, Creation & Control and Monetary Policy · Explain the concepts of money and interest rates. · Explain how banks create money.· Evaluate the effectiveness of the central banks monetary policy in stabilizing the economy. Course Assignments 1. Readings
· Read Ch. 13-15 in Economics
· Read this week’s Electronic Reserve Readings. 2. Activities
· Visit the International Monetary Fund site at: http://www.imf.org/external/pubs/ft/weo/2007/02/weodata/weoselgr.aspx. Use this site as a resource for Weeks 5 & 6.
3. Individual Assignment: Interest Rate Report
· Resource: University of Phoenix Material – Big Drive Auto
· Write a 350- to 700-word report in which you address the following issues in the context of the scenario:
o Identify decisions made by key organizational stakeholders that are affected by interest rates
o Identify how interest rates affect the cost of operating the business
o Find the current yield curve and interpret the effect of its shape on decision-making within the organization
o Evaluate how changes in interest rates affect the customer demand for the product in the scenario
o Explain how business planning and operations are dependant on monetary variables other than interest rates
Explain how banks create money.
o
4. Individual Assignment: Quizzes
· Resources: Visit the MBA Web Prep for Economics site at:
http://cwx.prenhall.com/bookbind/pubbooks/uop_casefair/
· Complete Quiz 8.
· Submit the results to your faculty member. Week Six Global Context: Business Beyond National Borders · Explain the concept of comparative advantage and its recommendation for specialization.· Explain the effects of barriers to free trade and the reasons countries impose them.
· Explain how the foreign exchange market works and how exchange rate risk is managed.
Course Assignments 1. Readings
· Read Ch. 6 & 37 of Economics
· Read Ch. 17 & 18 of International Economics
· Read this week’s Electronic Reserve Readings.
2. Learning Team Assignment: International Paper
· Resources: The data compiled from the University of Phoenix Material – Big Drive Auto in Week Four (or the material from your own organization in which you faculty member has approved)
· Write a 700- to 1,050- wordpaper addressing the following issues in the context of the scenario:
o Identify and justify the macroeconomic measures of output and prices which you have selected for Big Drive Auto’s planning.
o What are the relationships between the organization’s data and the macroeconomic measures you have selected?
o Explain how specific planning and operating decisions at the organization can be improved using the macroeconomic data.
o How would you get reliable forecasts of these macroeconomic variables?
o In your planning, how would you deal with the uncertainty in macroeconomic forecasts?
o How do business cycles affect the performances of Big Drive Auto (or the organization of your choice)? What could the organization do to mitigate any undesirable effects of business cycles?
o Identify to what extent tariffs or quotas would affect international trade in your product
o How would you pay for imports, receive payment for exports, and manage exchange rate risk?
