Institute of Commercial Management | Qualification Subject

Economics for Business

Main Topics of Study

The Foundations of Economics

  • The economic problem: scarcity choice and opportunity cost
  • Production possibility and utility
  • Microeconomics and macroeconomics
  • Alternative economic systems
  • Growth and sustainable development

Microeconomics: The Theory of Price Determination

  • Demand
  • Supply
  • Market equilibrium, the price mechanism and market efficiency
  • Concept of elasticity
  • Indirect taxes, subsidies and price controls

Microeconomics: Costs and Revenues

  • Short and long run costs
  • The scale of production and economies of scale
  • Average, marginal and total revenues
  • Profit theory
  • Perfect competition: the short and long run
  • Productive and allocative efficiency

Microeconomics: Imperfect Markets

  • Monopoly, sources and profit maximisation
  • Comparison of perfect competition and monopoly
  • Advantages and disadvantages of monopoly
  • Monopolistic competition
  • Oligopoly, sources, collusive activity and non-price competition
  • Price discrimination

Macroeconomic Fluctuations and the Hospitality Industry

  • Boom follows slump follows boom: stages of the macroeconomic cycle
  • Aggregate demand and supply
  • Why fluctuations in output occur
  • Government macroeconomic policy
  • Views on macroeconomic policy
  • The impact of the macroeconomy on the hospitality industry
  • Predicting macroeconomic changes
  • Implications for management

Microeconomics: Market Failure

  • Public goods and merit goods
  • Externalities
  • Sustainability and government response
  • Imperfect information and imperfect competition

Macroeconomics: The Level of Economic Activity

  • The circular flow of income, leakages and injections
  • The measurement of national income
  • Limitations of national income data
  • The business cycle
  • Aggregate demand and its components
  • Government policies affecting aggregate demand (fiscal and monetary)
  • Aggregate supply in the short and long run
  • Supply side policies

Macroeconomics: Equilibrium, Employment and Inflation

  • Short and long run equilibrium
  • The multiplier effect
  • The measurement and costs of unemployment
  • Causes of unemployment
  • Solutions to unemployment
  • Measurement and costs of inflation and deflation
  • Demand pull and cost push inflation
  • Reducing inflation
  • The inflation-unemployment trade off

Macroeconomics: Growth and Equity

  • Definition of economic growth
  • Consequences of growth
  • The distribution of national income
  • Taxation and income distribution

International Economics: Trade

  • Why countries trade
  • The principle of free trade. Absolute and comparative advantage
  • The world trade organisation
  • The arguments for and against protection
  • Types of protection
  • Economic integration and trade blocs
  • The terms of trade

International Economics International Monetary Issues

  • Exchange rate determination
  • Fixed, floating and managed exchange rate systems
  • The balance of payments, current, capital and financial account
  • Balance of payments and the exchange rate
  • Correcting a current account deficit

Development Economics

  • Sources of growth and economic development
  • Characteristics and diversity of developing countries
  • Measuring development
  • Domestic factors affecting development
  • International trade and development
  • The role of foreign direct investment
  • Aid, debt and development
  • Market aid and interventionist strategies

Maintaining and Developing Your Economic Skills

  • An analytical framework
  • Planning reading
  • Reading the industry literature

Recommended Reading

Main Text:

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Economics – Course Companion, 2nd edition, 2012, Jocelyn Blink & Ian Dorton, Oxford University Press.

Indicative Text:

Alternative Text and Further Reading:

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Business Essentials, Economics, BPP Learning Media.

Essentials of Economics, 7th edition, John Sloman & Dean Garratt, Pearson.