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Economics for business

Chapter 1, B&W

Consumers in the marketplace

Chapter 2, B&W

Firms in the marketplace

Chapter 3, B&W

Markets in action

Chapter 4, B&W

Market structure and firm performance

Chapter 5, B&W

Strategic rivalry and growth strategies

Chapter 6 AND 7, B&W

Governing business

Chapter 8, B&W

Introduction to the macroeconomy

Chapter 9, B&W

Measuring macroeconomic variables and policy issues

Chapter 10, B&W


Supply side policies and economic growth

Chapter 14, B&W



Chapter 16, B&W


Unit Revision

Exam and related information:

Exam is 70% of your total assessment. There are 8

questions with sections; you need to answer 7 out of 8
questions. There could be sections under each question.
Each question will carry 10 marks. Draw graphs, give
hypothetical examples whenever possible. Syllabus covers
all topics in Lectures plus tutorials and other related
Formula sheet will not be supplied; calculator is needed for final exam
Contact your tutor/lecturer ASAP if you have not received your
mark for major report yet
If you did not submit your major report, you receive
Read unit outline for rules of special consideration in case
you miss exam due to serious illness. Remember rules of
special considerations are very strict these days. Make

every efort to appear on the schedule date in your exam

Contact me/or your tutor using direct email not via Moodle

Lecture 1-chapter 1, B&W

The concept of opportunity cost Next best alternative that has to
be foregone to obtain a good
Lecture 2-chapter 2, B&W
Factors afecting demand curve Number of substitutes, time horizon,
type of market
Elasticity of demand-price, income and cross price elasticities
Cross Price Elasticity = XYe =
Percentage Change in Demand of Product X
Percentage Change in the Price of Product Y
- defines a market
Elasticity and substitutability
Elasticity and total revenue
Elasticity and product life cycle
- Changes over time period
- Creative destruction
- How to interpret elasticity
- PED, Why is it important? Substitutability, Total revenue
Lecture 3-chapter 3, B&W
The difference between the short(cannot be changed) and long
run(all can be changed )
The difference between variable, fixed and total costs, cost curves
in short and long run

The concepts of marginal product and marginal costs

The law of diminishing returns as more of a variable factor is

added to a fixed factor of production, at some point, returns to
variable factor will diminish
- short run, rigid, some factors are fixed, some are variable
- long run, its u shaped due to economies of scale
- loss of control, political risk will increase cost in long run
Economies of scale, entry barrier
- infrastructure, regulations, institutional rigidity.
The concept of minimum eficient scale
- Draw graph, MES = production level
Lecture 4-chapter 4, B&W

The concept of market equilibrium

How changes in demand and supply lead to changes in the

market equilibrium
How price elasticity influences the size of changes in market price
and output
Market shortages and surpluses as instances of market

The difference between pooling and separating disequilibria

Lecture 5-chapter 5, B&W

Why firms maximize profits by producing an output where

marginal cost equals marginal revenue

Perfect competition

The difference between normal and supernormal profits, shut


How profits and losses lead to entry and exit

Monopoly-natural monopoly and related costs and entry barrier

- monopoly extract consumer surplus, allows for DWL,

How barriers to entry protect supernormal profits

The key differences in profit, output and prices between perfect

competition and monopoly
- monopolistic competition cannot reach minimum pt of long run
cost curve, perfect competition can. Homogenous product

Lecture 6-chapter 6 and chapter 7, B&W

Monopolistic competition-major characteristics, short and long run profit

Monopolistic competition and product differentiation

Monopolistic competition and excess capacity

Oligopoly and interdependence

Concentration, market share and merger

Natural and strategic entry barriers

The kinked demand curve model: Only model we have done under

The diference between horizontal, vertical and diversified growth

Learning curves

Transaction costs

The hold-up problem

Economies of scope, diversification- example Google

Lecture 7-chapter 8, B&W

Principal Agent problems

The separation of ownership from control

Alternative theories of the firm

The concept of positive and negative externalities-example,


Difference between marginal social cost and marginal private

cost; marginal social benefit and marginal private benefit

The notion of market failures

The use of tax and subsidies to correct market failures

The regulation of monopoly

Deregulation of any industry-related to eficiency, productivity,

entry barriers

Lecture 8-chapter 9, B&W

Business cycle and macroeconomic output
Circular fows of income-injection and lickage
Aggregate demand, aggregate supply both in short and long run
Business applications related to the above issues
- Why AD negatively sloped
- Long run, AS is constant, vertical
- Long run AS shifts because of advances in technology, migration etc
- Short run AS shifts, input cost, wages
- full explanations, step by step

Lecture 9-chapter 10, B&W

GDP different measures

Infation, unemployment-demand pull and cost push
Interest rate policy
Measures of infation and unemployment
Balance of payments and related concepts
Demand side and supply side policies to correct

Lecture 10-chapter 14, B&W

How economic growth is linked to growth in long run aggregate

The neo classical model of economic growth

The convergence hypothesis

The endogenous growth model

The types of policies used to develop economic growth

Lecture 11-chapter 16, B&W

The cultural, political and economic drivers of globalization

The concept of comparative advantage

The use of tariffs and quotas, efects of tarifs on consumers,

producers ad society
o What is consumer and producers surplus

How to assess the rise in international trade

The reasons behind the rise and fall in foreign direct investment


For ECF3900
For Thandi

Oct 30 12-3 pm (H4.30)

Nov 2 11-2 pm (H4.30)

Oct 29 1-2 pm (H4.52)
Nov 2 2-3 pm (H4.30)