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BS1102 – ECONOMIC ENVIRONMENT OF BUSINESS
Module Number:
BS1102
Title of Module:
Economic Environment of Business
Number of Aston Credits:
10
Total Number of ECTS Credits: 5
Staff Member Responsible for the Module:
Dr Chris Jones
Economics & Strategy Group
South Wing, Room 1020a, Extension 3036
Email: [email protected]
Availability: Office hour appointments can be booked using the online booking
system: https://wass.aston.ac.uk/wass/pages/login.page.php Please just search
for my name. Appointments are limited to 10 minutes, if there is space available
this can be extended. I would highly encourage students to come in groups if
they wish.
Other Staff Contributing to the Module Include:
TBC
Pre-Requisite(s) for the Module: None
Module Learning Outcomes:
Upon successful completion of the module students will be able to:
(1) Appreciate economic concepts, relationships and economic policy and why
they are important to the business environment.
(2) Describe and illustrate the differences between Microeconomics and
Macroeconomics. And an appreciation of the different schools of thought
in the later.
(3) Explain why economists use economic models to help understand the
complexity of much economic phenomenon.
(4) Evaluate, analyse and put into practice economic models in both
Microeconomics and Macroeconomics
(5) Critically understand and evaluate the workings of an advanced mixed
economy such as that of the United Kingdom.
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BS1102 – ECONOMIC ENVIRONMENT OF BUSINESS
Module Content:
Microeconomics
1. Introduction (week 15)
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
2. Part 1: Demand & Supply Responsiveness (week 16)
Price elasticity of demand, elasticity and total revenue, cross price elasticity of
demand, income elasticity of demand, elasticity of supply.
Part 2: An Introduction to the Theory of the Firm (week 16)
Short run vs. long run
The firm as a “black-box”
Profit Maximisation
Cost & Revenue
The Shut-down rule
Long-run average cost
3. Market Structure 1: Perfect Competition & Monopoly (week 17)
Perfect Competition
Monopoly
Joseph Schumpeter
4. Market Structure 2: Imperfect Competition (week 18)
Monopolistic Competition
Oligopoly – Kinked Demand Curve
Game Theory
Summary of Market Structure
5. Market Failure (week 19)
Equity & Efficiency
Competitive Equilibrium: Marginal Private Cost and Benefit.
Examples of Market Failure
Externalities
Public Goods
Aymmetric Information
Moral Hazard
Adverse Selection
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Macroeconomics
1. Introduction to Macroconomics (week 20)
The Circular Flow of Income (Simple)
The Output, Income and Expenditure measures of GDP.
The Circular Flow of Income (Advanced)
Economic growth: A simulation
The Business cycle
2. The Keynesian Model (week 21)
John Maynard Keynes
The Circular Flow re-cap
Aggregate Demand
The Consumption Function
The equilibrium level of output: The 45 degree line.
The multiplier.
Paradox of Thrift
Demand Management: Fiscal policy & Monetary Policy.
3. Money and Banking (week 22)
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
Modeling the Money Market
The Monetary Transmission Mechanism
The Costs of inflation
The Exchange Rate
4. AD and AS Analysis (week 23)
AD with flexible prices and wages
Short rum aggregate supply.
Long run aggregate supply.
Applying the model: (1) Credit Crunch; (2) Stagflation.
Economic Schools of Thought
Unemployment
5. The Global Economy (week 24)
Globalisation
Foreign Direct Investment
International Trade
Ricardo’s Theory of Comparative Advantage
Trade Policy
Revision
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BS1102
BS1102 – ECONOMIC ENVIRONMENT OF BUSINESS
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.
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
Learning and Teaching Rationale and Methods
Ten two-hour lectures, (weeks 15-24), and five fortnightly seminars (weeks 1524)
The lecture programme introduces students to key concepts, and indicates the
appropriate areas for further study. The seminar programme provides an
opportunity for students to clarify, reinforce, and extend their understanding of the
subject. Seminars will focus on the most challenging aspects of the course and
will be very relavant for the essay component of the exam.
How are the 100 Learning Hours per Module Achieved?
Contact time
Private Study
Mid-term Quiz
Exam
Total
25 hours
70 hours
3 hours
2 hours
100 hours
Ethical Approval:
This module does not require any primary research and no ethical approval will
be necessary.
Assessment and Feedback Rationale and Methods
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
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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.
In addition to the formal assessment there will also be an online quiz posted on
Blackboard during Week 22. 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.
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