Managerial Economics

Module Instructor: Dr. Humaira Asad

Contact: humaira@ibapu.edu.pk
Module description
This module is an introduction to theories in concepts in economics that underpin much of the world
of modern business. It will help you to understand how businesses and economies work, and why.
Economics concepts and thinking lie at the heart of how markets work, how and why businesses
function and how and why people behave. Understanding economics is essential to more detailed
understanding of business.
Internationalisation: the module will draw on recent scholarship in the areas of innovation and
market studies broadly defined published by researchers internationally (the UK, Europe, the United
States) and case studies based on a variety of national contexts.
Sustainability: you will be encouraged to consider sustainability in relation to both macro and micro
economics.
External Engagement: an external speaker will be invited.
Employability: the module will offer an opportunity to acquire knowledge and develop analytical
skills for explaining the relevance of economics to future employers.
Ethics and Corporate Responsibility: the module will look at ethics and corporate responsibility as
part of several topics.
Research in Teaching: the module will draw research articles in the first instance; use the module
leader’s research expertise in the areas of discussion; and engage you in independent research to
produce a case study.
Duration of module: 16 weeks teaching; Mid-exam 9th week; Final Exam 18th week
2 classes each of 90 minutes. Attendance is compulsory.
Module aims
The aims of this module are to allow you to develop an understanding of the relevance of economics
to managers in business, and to introduce key issues in the economics of a sustainable world: for
example, the economics of climate change, biodiversity, and extending notions of national income to
include natural resources. The first part of the module will focus on microeconomics content and will
concentrate on understanding markets: the way that they work, and the ways in which they fail. The
second part of the module will explore macroeconomics: what growth, inflation and imports/exports
mean; why countries trade; and the effects of globalisation. We will also look at more recent
developments to extend measures of national income; and look at the differences between physical
and economic scarcity of natural resources, and constraints on growth.
ILO: Module-specific skills
1. explain the role of economics in managerial decision-making.
2. explain and evaluate how markets work.
3. comprehend the nature of market failure and the implications for business and government.
Managerial Economics – MBA Semester I – Dr. Humaira Asad
4. evaluate the factors affecting the macroeconomic environment, and their interactions and
interdependencies.
5. appreciate the value of using economics in assessing the external environment for business
decision-making.
6. evaluate emerging economic themes that are having an impact on companies.
ILO: Discipline-specific skills
7. think analytically.
8. interpret economic data.
9. critically reflect on common assumptions held within the business community.

ILO: Personal and key skills

10. demonstrate the capacity for analytical and reasoned discussion.
11. demonstrate effective independent study skills.
12. demonstrate effective written communication skills.
Syllabus plan
Issues in economics for a sustainable world: the big picture: valuing and allocating resources;
emerging issues; relevance to business leaders; understanding, thinking and communicating
economically.
Microeconomics – demand and supply; perfectly competitive markets. Market failure – market
power, externalities, public goods and information failures. The economics of climate
change. Valuing biodiversity.
Macroeconomics - the external economic environment. Growth, inflation and unemployment. Trade
and comparative advantage. Beyond GDP: green national accounting. Constraints on growth.
Conclusion: the role of economics in Business.
Indicative learning resources - Basic reading
Salvatore, Dominick and Srivastava, Ravikesh (2014) Managerial Economics, 7e, Oxford University
Press
Froeb, L.M. and B. T. McCann (2010), Managerial Economics: A Problem-Solving Approach, 2nd Ed.,
South-Western Cengage Learning.
The relationship between economics and sustainability is covered by:
Peter M. Senge et al. (2008) The Necessary Revolution: How Individuals and Organizations are
Working Together to Create a Sustainable World, London: Nicholas Brealey.
Last revision date
16 Dec 2019

Managerial Economics – MBA Semester I – Dr. Humaira Asad