BITM Economics for Business
bitmsemester 4
Economics for Business
Subject Code: ECO206
Course Title: Economics for Business
Course No: ECO206
Nature of Course: Theory & Practical
Full Marks: 60
Pass Marks: 30
Credit Hours: 3
Course Description
This course comprises the basic economic issues; concepts, scope, and business applications of micro and macroeconomics; analysis of demand, supply and market efficiency, production, cost, and profit analysis, market structures and pricing practices, and fundamentals of macroeconomics.
Course Objective
This course aims to develop students' understanding of fundamentals of the microeconomics and macroeconomics in order to enhance their skill in analyzing business opportunities and markets for optimum use of resources in business practices blending with information technology.
Course Contents
| Course Contents | Teaching Methodology | Teaching Hours |
|---|---|---|
| Unit 1: Introduction (5 Hrs.) | ||
| Basic economic issues: scarcity, choice, and alternatives | Lecture | |
| Microeconomics: concepts and scope, microeconomics and business operations | ||
| Macroeconomics: concepts and scope, macroeconomics and business environment | ||
| Unit 2: Analysis of Demand, Supply, and Market Efficiency (14 Hrs.) | ||
| Demand function: concept and types | Lecture | |
| Movement along a demand curve and shifts in demand curve | ||
| Supply function: concept and types | ||
| Movement along a supply curve and shifts in supply curve | ||
| Market Equilibrium | ||
| Economic efficiency: concept and measurement | ||
| Price elasticity of demand: concept and calculation | ||
| Price elasticity of demand in demand curve | ||
| Concept of revenue and relationship between revenue and price elasticity of demand | ||
| Uses of price elasticity of demand in business decision making | ||
| Concept and calculation of income elasticity of demand, cross elasticity of demand and advertisement elasticity of demand | ||
| Price elasticity of supply: concept and calculation | ||
| Unit 3: Production, Cost, and Profit analysis (12 Hrs.) | ||
| Production function: concept and types | Lecture | |
| Factors of production | ||
| Law of variable proportions and optimal employment of one variable input | ||
| Isoquants: assumptions, properties and principle of marginal rate of technical substitution, Optimal employment of two variable inputs | ||
| Laws of returns to scale | ||
| Cost function | ||
| Various concepts of costs: opportunity cost, explicit and implicit costs, accounting and economic costs | ||
| Short run costs: behavior of short-run total, average and marginal costs and cost curves | ||
| Derivation of LAC and LMC | ||
| Relation between AC and MC | ||
| Economies and diseconomies of scale | ||
| Business profit and economic profit | ||
| Unit 4: Market Structure and Pricing Practices (5 Hrs.) | ||
| Market structure: concepts and characteristics of perfect competition, monopoly, monopolistic competition and oligopoly market | Lecture | |
| Goal of the firm: profit maximization | ||
| Pricing practices: price discrimination, cost plus pricing, two-part tariffs, bundling | ||
| Concept of wage differentials and interest rate differentials | ||
| Unit 5: Fundamentals of Macroeconomics (12 Hrs.) | ||
| Concept and measurement of national accounts: GDP, GNP, NI, PDI, and per capita income | Lecture | |
| Nominal GDP, Real GDP, and GDP deflator | ||
| Consumption, saving, and investment functions | ||
| Inflation: concepts and measurement | ||
| Demand-pull and cost-push inflation | ||
| Concept of deflation | ||
| Business cycles: concept and phases | ||
| Balance of payments: concept and components | ||
| Exchange rate determination: concepts, fixed and flexible exchange rate | ||
| Monetary policy: concept, instruments and objectives | ||
| Fiscal policy: concept, instruments and objectives |
Text Books
1. Browning and Browning. Microeconomic Theory and Applications, New Delhi, Kalyani Publishers Latest Edition
2. Case, K. E., and Fair, R.C. Principles of Economics, Singapore, Pearson Education. Latest Edition
3. Dwivedi, D.N. Macroeconomics: Theory and Policy, Delhi, Pearson Education Pvt. Ltd. Latest Edition
4. McConnell C.R. and Brue, S. Economics: Principles, Problems, and Policies, New York, McGraw Hill. Latest Edition
5. Shreshtha, R.G. and Adhikari, G.M. Economics for Business, Kathmandu, KEC Publications. Latest Edition