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Module Information for BS1102, 2015/6 - APPROVED
Module Title/Name: Economic Environment of Business
Module Code: BS1102
School: Aston Business School
Module Type: Standard Module
New Module? No
Module Credits: 10
Module Management Information
Module Leader Name
Email Address
Christopher Jones
[email protected]
Telephone Number
Not Specified
Office
Not Specified
Additional Module Tutor(s):
None Specified
Level Description:
Cert He/Level 4 (Enhanced Honours)
Programmes in which available:
None Specified
Contributing School & Subject Groups (and %):
None Specified
Credit Value & ECTS Credits:
10
Available to Exchange Students?
Module Dependencies
Pre-requisites:
None Specified
Co-requisites:
None Specified
Prohibited Combinations:
None Specified
Module Learning Information
Module Aims:
The aim of this module is to provide training in the introductory principles of economics and their application under a variety of
different contexts. Students will study the key theoretical models used in Microeconomics and Macroeconomics to allow them to be
able to solve both theoretical and applied problems and in order to develop the analytical skills needed to apply these models for
studying real world economic phenomenon.
Module Learning Outcomes:
? Intellectual Skills
Upon successful completion of the module students will be able to:
Appreciate economic concepts, relationships and economic policy and why they are important to the business environment.
Describe and illustrate the differences between Microeconomics and Macroeconomics. And an appreciation of the different schools
of thought in the later.
Explain why economists use economic models to help understand the complexity of much economic phenomenon.
Evaluate, analyse and put into practice economic models in both Microeconomics and Macroeconomics
Critically evaluate the workings of an advanced mixed economy such as that of the United Kingdom.
? Knowledge & Understanding
Students will begin to gain knowledge concerning the core economic principles. These will be presented both verbally, graphically
and in some instances using basic mathematics.
The microeconomic principles will include issues of decision and choice the production and exchange of goods, the pricing and
use of inputs, the interdependency of markets, the relationships between principals and agents, and economic welfare.
The macroeconomic principles will cover issues of employment, national income, the balance of payments, distribution of income,
inflation, growth and business cycles, money and finance.
The understanding will extend to economic policy at both the microeconomic and macroeconomic levels. Students will be able to
show an understanding of the analytical methods used to evaluate different types of economic policy.
? Professional Skills
As a first year module this course will begin to develop professional skills in the following areas: (1) analysing and using evidence;
(2) Problem solving skills; (3) Numeracy skills and their application; (4) the ability to write clearly and construct an argument; (5)
Self-Motivation as this will be new for many students who have not studies economic before; and (6) Time Management.
? Transferable Skills
Students will begin to gain subject-specific but highly transferable rigorous skills. These include: (1) the ability to use abstraction;
(2) the ability to reason: analyse, deduce and induce; (3) the ability to present data; and (4) the ability to frame for example how to
isolate factors of critical importance when dealing with a problem.
Indicative Module Content:
Microeconomics
Lecture 1: Introduction
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
Lecture 2 Part 1: Demand & Supply Responsiveness
Price elasticity of demand, elasticity and total revenue, cross price elasticity of demand, income elasticity of demand, elasticity of
supply.
Lecture 2 Part 2: An Introduction to the Theory of the Firm
Short run vs. long run
The firm as a ?black-box?
Profit Maximisation
Cost & Revenue
The Shut-down rule
Long-run average cost
Lecture 3: Market Structure 1 Perfect Competition & Monopoly
Perfect Competition
Monopoly
Joseph Schumpeter
Lecture 4: Market Structure 2 Imperfect Competition
Monopolistic Competition
Oligopoly ? Kinked Demand Curve
Summary of Market Structure
Game Theory
Nash Equilibrium
Bachelor Pad
Mixed Strategies
Lecture 5: Market Failure
Equity & Efficiency
Competitive Equilibrium: Marginal Private Cost and Benefit.
Examples of Market Failure
Externalities
Public Goods
Asymmetric Information
Moral Hazard
Adverse Selection
Macroeconomics
Lecture 6: An Introduction to Macroeconomics
The Circular Flow of Income (Simple)
Measuring GDP
The Circular Flow of Income (Advanced)
Economic growth: A simulation
The Business cycle
Lecture 7: The Keynesian Model
John Maynard Keynes
The Circular Flow Again
Aggregate Demand
The Consumption Function
The equilibrium level of output: The 45 degree line.
The fiscal multiplier.
Paradox of Thrift
Demand Management: Fiscal policy & Monetary Policy.
Lecture 8: Money and Banking
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
Modelling the Money Market
The Monetary Transmission Mechanism
The Costs of inflation
The Exchange Rate
Lecture 9: The Neo-Classical Model AD and AS Analysis
AD with flexible prices and wages
SRAS
LRAS
Applications: (1) The Credit Crunch; (2) Stagflation 1970?s.
Economic Schools of Thought
Lecture 10: Unemployment
US and UK Unemployment History
Definitions & Concepts
Classical Unemployment
Keynesian Unemployment
Tax Incentives ? Supply Side Policy
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.
Ethical Approval:
(If primary research is involved)
n/a
Links to Research:
Various parts of the course, particularly the lectures on economic growth and international trade will link in with Dr Chris Jones?s
research
Ethics, Social Responsibility and Sustainability:
None Specified
Module Delivery
Methods of Delivery & Learning Hours (by each method):
Method of Delivery
Learning Hours
Lecture:
20 hours
Tutorial:
5 hours
Independent Study:
Total Learning Hours:
75 hours
100 hours
Learning & Teaching Rationale:
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.
Module Assessment
Methods of Assessment & associated weighting (including approaches to formative assessment as well as summative):
Assessment
Type
EXAM TOTAL
Details
Category
Duration/
Submission
Date
Common Modules/
Exempt from Anonymous
Marking Assessment
Weight
Closed
Book
2:00hrs
-
100%
Total:
100%
Method of Submission:
Hard Copy Only
Assessment Rationale:
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 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.
Feedback Rationale:
There will be an online quiz posted on Blackboard after the 3rd lecture. 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. There is a commentary for
each question that describes why an answer is correct or incorrect.
Students are advised to seek verbal feedback by attending office hours which operate twice a week for 2 hours.
Module Teaching Frequency, Room & AV Requests
Teaching Frequency:
1 lecture per week (2 hours). Very large class so need the Great Hall.
Room & AV Requirements:
No Room Requirements Specified Lecture Theatre