Expand+ECON10720 Microeconomics for Business
Academic Year 2021/2022
The aim of this module is to introduce students to core microeconomic principles and how they can be used to help understand decision making and behaviour in a business environment. The ...

Hide-ECON10720 Microeconomics for Business
Academic Year 2021/2022
The aim of this module is to introduce students to core microeconomic principles and how they can be used to help understand decision making and behaviour in a business environment. The module focuses on markets as the principle arena where these decisions are made and stresses that both firms and consumers make choices under conditions of scarcity and do not have unlimited resources. A model of consumer demand is presented showing how consumers respond to changes in prices, incomes and other factors. On the supply side, a model of the production decisions of firms is presented and the roles of costs and technology are explored. Market structure is also explicitly considered ranging from perfect competition to monopoly and the strategic interaction of firms is also addressed. Finally, it is stressed throughout the module that markets often fail and in those cases some form of intervention, typically but not exclusively provided by government, to correct these failures is warranted. The impact of Covid-19 will also be integrated into the analysis showing how it can impact decisions of consumers and firms and also its relevance for social interactions. The module assumes no previous knowledge of economics.

Learning Outcomes:
On completion of this module, students will be able to:
1. understand how economics views the concepts of scarcity and choice and how consumers make decisions regarding consumption, work and lesiure
2. understand the role of markets in co-ordinating decisions of buyers and sellers
3. understand the different factors affecting markets and the usefulness of concepts such as elasticity
4. understand the concept of efficiency and how economic surplus is divided between agents
5. gain a knowledge of concepts vital to firm decision making such as production, costs, revenues and profits.
6. describe profit maximization and price/ouput decisions under conditions of perfect and imperfect competition
7. understand interactions in the form of altruism and trust between agents such as consumers and firms
8. understand how and when markets can fail and how government intervention may correct such failures.

Indicative Module Content:
The module assumes no prior knowledge of economics and so initially some introductory material is provided. The module then discusses how economics models the decisions made by consumers in areas such as work/leisure and consumption. Concepts such as supply, demand, markets and elasticity are introduced at this stage. The module then models decisions made by firms in areas such as technology, costs , output and pricing. The module then discusses market structure covering the spectrum from perfect competition, to monopolistic competition to oligopoly and monopoly. The final two parts of the course examines

(a) strategic interactions between consumers and firms not always covered in traditional models of economics and

(b) how markets can fail and how interventions, sometimes but not always by governments, can attempt to correct for these failures.

The Covid-19 pandemic will not be explicitly modelled but account will be taken of how such events may impact upon decisions of consumers and producers. It becomes particularly relevant in the final section of the course when examining social interactions, externalities and market failure.