Master of Business Administration (International Business)
Master of Business Administration (International Business)
Semester I
Course 114: ECONOMICS FOR MANAGERS
Marks: 100 (Theory = 70, Internal Assessment = 30)
Objective: The objective of the paper is to acquaint the students with the economic concepts and
principles and to enable them to use them to address business problems in a globalized economic
environment.
Unit I: Demand and The Firm: Demand and its Determination: Demand function; Determinants of
demand; Demand elasticity – Price, Income and cross elasticity. Use of elasticity for analyzing demand,
Demand estimation, Demand forecasting, Demand forecasting of new product.
Firm and its Organization: Nature of the Firm and types of organizations. The Corporation: Ownership
and Control.
Unit II: Production, Cost and Market Forms: Production: Law of variable proportions. Production
function: Concept of productivity and technology, Isoquants; Least cost combination of inputs,
Producer’s equilibrium; Return to scale; Estimation of production function, Relationship between cost
and production function, Cost: Classification of costs; Short run and Long run cost functions.
Market Forms: Shapes of AR, MR curve and their relationship in different market forms. Market
Imperfections–Monopolistic, Collusive oligopoly and price discrimination.
Unit III: Pricing: Pricing practices; Commodity Pricing: Economics of advertisement costs; Types of
pricing practices. Factor Pricing: Demand and supply of factor of production; Collective bargaining,
Concept of rent, profit, interest- Rate of return and interest rates; Real vs. Nominal interest rates. Basic
capital theory–Interest rate and return on capital. Measurement of profit.
Unit IV: Macro-Economic Markets and Integration: Product market: Saving and Investment
function, Consumption function, Aggregate supply and Aggregate demand, Investment multiplier,
Foreign trade and budget multiplier.
Money market: Motive for holding money; Liquidity preference, Money demand, Money market
equilibrium.
IS-LM Analysis: Derivation of nominal IS-LM and equilibrium.
Unit V: Trade Cycles and The Open Economy: Trade Cycles: Theories of trade cycles and Aggregate
demand. Open economy macro economics: Determination of Exchange Rate. Effects of changes in
trade on exchange rate. Purchasing Power Parity and Exchange Rates: Fixed and Flexible. Net Export
and Output in an open economy. Impact of trade on GDP. Open economy multiplier.