Introduction to Economics
This applied module will enable you to consider how economic analysis can be a useful technique for businesses and their managers. This industry-relevant focus on the application of economics provides an essential, useable body of economic theories, which will provide the basis for further study and a real understanding of the role of economics in business, public and private decision making. The module considers how economics can be used to understand particular business problems or aspects of the business environment, using a variety of case studies. It will allow students to develop a greater understanding of the economic issues businesses must deal with and how government and international policy can affect their behaviour. The module aims to set business decision-making in the current macroeconomic ad institutional environment.
Full module specification
|Module title:||Introduction to Economics|
|Duration of module:||
Duration (weeks) - term 1: |
This module presents an integrated approach to understanding the economic behaviour of economic actors, focusing on strategic decisions for economic organizations and the transactions they perform. The module aims to discuss a number of advanced topics in economic organization theory, institutional and organization economics, and theory of the firm of distinct relevance for management research.
Particularly this module aims at:
• To provide an essential, simple, useable body of economic theories
• To encourage you to ‘think like an economist’ in your everyday life
• To give you an understanding of how businesses use economic theory to make decisions
• To illustrate how economics is relevant to management practice
• To develop your understanding of the macroeconomic and institutional environment in which firms operate
• To examine how changes in economic policy and in the institutional environment can affect business behaviour
• To consider the issue of the global economy and the challenges businesses are facing
ILO: Module-specific skills
- 1. apply the economic way of thinking to enable students to understand economic problems such as why markets allocate resources where they are most wanted; why prices and wages rise and fall; how consumers allocate their budgets and how firms arrive at production decisions;
- 2. explain how the economic environment will affect business strategy in the domestic economy and in the global economy;
- 3. explain the ways in which firms make decisions and the factors that determine these decisions;
- 4. describe the competitive environment in which firms operate and explain how that will affect decision-making.
ILO: Discipline-specific skills
- 5. demonstrate reasoning and problem-skills. Students will understand what is meant by thinking like and economist;
- 6. apply economic theory to current economic problems.
ILO: Personal and key skills
- 7. demonstrate problem-solving and independent study skills;
- 8. develop IT skills through use of the ELE and the online resources.
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Scheduled Learning and Teaching activity||16||Lectures (2 hours per week for 8 weeks)|
|Scheduled Learning and Teaching activity||4||Tutorials with discussion (4 x 1-hour)|
|Guided Independent Study||130||Reading, analysis, research and assessment preparation - both revision for examination and assessment|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|In class paper presentations and discussions||Throughout the term||1-8||Feedback via online learning environment plus additional feedback as appropriate|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Final exam - open book||70||2 hours||1,5,6,7,8||Tutor feedback and feedback as requested|
|Group report||30||2000 words||1-8||Tutor feedback|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Final exam - open book (70%)||Final exam - open book (70%)||1,5,6,7,8||July/August|
|Group report (30%)||Individual essay (1500 - 1800 words) (30%)||1-8||July/August|
A student if deferred via a single component of the assessment will be re-assessed in that component only.
This module will focus on the various mechanisms, rules and institutions that enable, direct and constrain economic behaviour and are applied to the economic activity of individuals, groups of individuals, firms, and government. More specifically the course introduces students to 5 themes, and namely:
- Principal/agent or agency theory: how does asymmetric information affect transactions between economic agents; what solutions exist for such problems;
- Contract theory: when is a contract incomplete and how does this affect the efficiency of transactions;
- Transaction cost economics explains the make-or-buy decision, the choice of governance structure, and the boundaries of the firm;
- Theory of the firm: the strategy of a firm is the outcome of a negotiation process among multiple stakeholders;
- Institutional economics: how do formal institutions (e.g., laws) and informal institutions (e.g., norms) affect economic behaviour, and how do institutions change over time.
Lectures, seminars and discussion on the basis of the reading materials will be the main teaching method. It is essential that all students read the materials, and actively participate in classroom and group work activities. The module consists of two interconnected learning activities.
First, there are lectures. The lectures will introduce the relevant concepts. Conceptual lectures will be integrated with tutorials and seminars. They will be used to introduce and discuss scientific papers in the relevant field. In each seminar, the module convener will present a relevant paper. After each presentation, there will be a class discussion about the paper that was presented.
Second, there is a group assignment (report). Each group of 4 students will be working together and write a 2,000 words long report. This report will engage with the topics presented in the papers and discussed during the tutorials and seminars. Theoretical approaches presented during the tutorials and seminars represent the primary tools to be used to prepare the report. This report will be based on clear, scientific considerations. Guidelines for preparing the report will be posted on ELE.
Indicative learning resources - Basic reading
Akerlof, G. A. (1970). The Market for" Lemons": Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics, 84(3), 488-500.
Bowles, S., & Gintis, H. (2002). Social capital and community governance. The Economic Journal, 112(483).
Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386-405.
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management Review, 14(1), 57-74.
Kahneman, D. (2003). Maps of bounded rationality: Psychology for behavioral economics. The American economic review, 93(5), 1449-1475.
Masten, S. E., Meehan, J. W., & Snyder, E. A. (1991). The costs of organization. Journal of Law, Economics, & Organization, 7(1), 1-25.
Meier, S. (2006). A survey of economic theories and field evidence on pro-social behavior. FRB of Boston Working Paper No. 06-6
Ménard, C. (2004). The economics of hybrid organizations. Journal of Institutional and Theoretical Economics JITE, 160(3), 345-376.
Ostrom, E. (2008). Institutions and the Environment. Economic affairs, 28(3), 24-31.
Rosser Jr, J. B. (2003). A Nobel prize for asymmetric information: the economic contributions of George Akerlof, Michael Spence and Joseph Stiglitz. Review of Political Economy, 15(1), 3-21.
Shelanski, H. A., & Klein, P. G. (1995). Empirical research in transaction cost economics: a review and assessment. Journal of Law, Economics, & Organization, 335-361.
Simon, H. A. (1991). Organizations and markets. Journal of economic perspectives, 5(2), 25-44.
Williamson, O. E. (1992). Markets, hierarchies, and the modern corporation: An unfolding perspective. Journal of Economic Behavior & Organization, 17(3), 335-352.
Williamson, O. E. (2000). The new institutional economics: taking stock, looking ahead. Journal of Economic Literature, 38(3), 595-613
Module has an active ELE page?
Indicative learning resources - Web based and electronic resources
Indicative learning resources - Other resources
All students on the programme will have access to additional material in the form of a customised e-book or as recommended during classes.
Last revision date