[Business Economics]

COURSE BASICS
Course Code
Credit Hours Three
Lectures [No. of Lec(s) Per Two Duration 3hrs/ week
Week]
Lab Sessions Duration

COURSE DISTRIBUTION
Program(s) Attached To MBA
Course Category Compulsory
Course Pre-requisites
Semester 3

COURSE DESCRIPTION
A one-semester introduction to the basic tools of micro- and macroeconomic analysis. Microeconomics deals with
consumers, firms, markets and income distribution. Macroeconomics deals with national income, employment,
inflation and money. This course provides an introduction to a broad range of economic concepts, theories and
analytical techniques. It considers both microeconomics - the analysis of choices made by individual decision-making
units (households and firms) - and macroeconomics - the analysis of the economy as a whole. The use of a market,
supply and demand, model will be the fundamental model in which trade-offs and choices will be considered through
comparison of costs and benefits of actions. Production and market structure will be analyzed at the firm level.
Macroeconomic issues regarding the interaction of goods and services markets, labor and money at an aggregate level
will be modelled. The role of government policy to address microeconomic market failures and macroeconomic
objectives will be examined.

COURSE OBJECTIVES

The program aims to:

CO1: Policy influences of microeconomic choices and macroeconomic outcomes

To provide necessary instructional package for the economics principles course.

CO2:

CO3: To introduce the essential principles for an understanding of fundamental economic problem.
To provide orderly and objective way of thinking about economic policy problems.
CO4:

To develop preliminary knowledge of economic concepts for understanding of national and

CO5:
international economy.
COURSE LEARNING OUTCOMES
This course of principles of economics would enable students to apply their minds to real life
CLO1:
managerial problems of demand and supply side (profit making) business decisions
CLO2:
Students will have a theoretical understanding of the concepts of elasticity of demand and supply
and all the sub-concepts of price, income and cross elasticities of demand etc.
Students will be able to understand theory of production and cost. And practical behaviors of
CLO3:
different market structures, the free market mechanism of perfect competition, the social cost of
monopoly, the strategic behaviors of oligopolistic markets and the product differentiation and price
discrimination in the monopolistic competition.
On successful completion of this course, students will be able to: Describe and explain how
CLO4: microeconomic models can be used to consider fundamental economic choices of households and
firms.
Describe and explain how national income accounts and macroeconomic models can be used to
CLO5:
analyze the economy as a whole.
CLO6: Understand working of monetary and fiscal policy and their potential impact on economy

CLO7: Understand major macroeconomic challenges faced by Pakistan economy

MBA PROGRAM OBJECTIVES

PEO1: Introduce the contemporary knowledge base and best practices with a futuristic outlook.

PEO2: Instill curiosity and sharp analytical capabilities for problem-solving among students.

PEO3: Train the students to identify and analyze emerging trends in the local and global business environment.

Offer opportunities to the students to refine and present their innovativeness and make it part of their
PEO4:
managerial repertoire.

Ensure that the curriculum is aligned with the contemporary needs of the industry and serve as an
PEO5:
instrument to bridge the gap between academia and industry.

MBA PROGRAM LEARNING OUTCOMES

Integrating business knowledge and management techniques to effectively manage and eventually spearhead
PLO1:
growth-oriented organizations and businesses.
PLO2: Apply critical and analytical skills to support management decision making.

PLO3: Conceive out-of-box ideas and present their ingenuity to execute in unconventional ways when necessary.

PLO4: Demonstrate their effective communication skills.

PLO5: Build effective teams with result-oriented group dynamics and general leadership traits.
Map if course objectives or outcomes specifically relate to any program objectives (along with corresponding assessment item):

PROGRAM OBJECTIVES (COURSE) LEARNING OUTCOMES COURSE ASSESSMENT ITEM

PEO3 CLO1, CLO2 Quiz #1 and Assignment #1
PEO3, PEO5 CLO3, CLO4 Quiz#2 and Assignment #2
PEO3, PEO5 CL01,CLO2,CLO3, CLO4 Mid-term and feedback
PEO4, PEO8 CLO5 Quiz #3 and Assignment #3
PEO6 CLO6 Quiz #4 and Assignment #4
PEO3, PEO4, PEO5, PEO6, PEO8 CLO1, CLO2, CLO3, CLO4, CLO5, Project presentation and Final Exam
CLO6, CLO7

ASSESSMENT STRUCTURE
Assessment Items Percentage
Quiz(s) **10
Assignments(s) **10
Class Participation ** 5
Midterm Examination * 20
Final Examination * 40
Project/Presentation ** 10
Other(s) **5

Note: *Fixed
**Variable

COURSE CONTENT AND DELIVERY PLAN

Application (Learning
Assessment Item
Lecture Topics Outcomes achieved
(Used for this topic)
through this topic)
Introduction to Micro Economics: CLO1
• What is microeconomics?
• Main problems in microeconomics
• How people make decisions?
1
• How people interact?
• Circular flow diagrams
• Scarcity and Choices

Market forces of Demand and Supply: CLO1

(i). Demand:
• The Demand Curve.
• Individual vs. Market
2
Demand.
• Shifts in the demand curve.
(ii). Supply:
• The Supply Curve.
 • Individual vs Market
Demand.
• Shifts in the Supply Curve.
(iii). Demand and Supply together:
• Market equilibrium
Analyzing the changes in equilibrium
Concept of Elasticity: CLO2 Quiz 1, Assignment 1
• The elasticity of demand
• Price Elasticity of Demand
and its determinants.
• Computing the Price
Elasticity.
• The variety of demand curve
• Total Revenue and Price
Elasticity.
• Other Demand Elasticities:
3-4 • Income Elasticity.
• Cross Price Elasticity.
• Elasticity of Supply.
• Price Elasticity of supply and
its determinants.
• The variety of supply curve
Supply, demand and government policies:
• Control on prices
▪ Price ceilings
▪ Price floors
▪ Taxes
Theory of Production: CLO3

• Concept of TP, AP and MP

5
• Isoquant curves
• Returns to Scale (Economies and
Diseconomies)

The Costs of Production: CLO3 Assignment 2

• What are costs?
• Production and costs
6 • The various measures of
costs
• Cost analysis in the short-run
and the long-run.
Firms in the Competitive Market: CLO3, CLO4 Quiz 2
• Defining Competitive
Market.
7-8 • Profit Maximization and
Competitive Firm.
• Supply Curve in the
Competitive Market.
 MID TERM
9
A first look at Macroeconomics CLO5

National Income Accounts

• GDP, GNP and other national
income measures
• GDP growth
• Real and Nominal GDP
• GDP deflator
Elements of an Economy

• Public Sector
• Private Sector
10-11 • Foreign Sector

Business Cycle, Unemployment, and

Inflation

• The Business Cycle

• Unemployment
• Natural Rate of
Unemployment
• Inflation
• Redistribution effect of
inflation

Basic Macroeconomic relationship CLO5 Project Announcement

Quiz 3, Assignment 3
• Income and consumption
(and income and Saving)
• The interest rate and
investment
• Changes in spending and
changes in output
• Multiplier Effect
12 Business Cycle, Unemployment, and
Inflation

• The Business Cycle

• Unemployment
• Natural Rate of
Unemployment
• Inflation
• Redistribution effect of
inflation
How banking system create money CLO6
Assignment 4
13
Interest Rate and Monetary Policy.
 • Interest Rate
• Tools of Monetary Policy
o Open market operations.
▪ Changes in reserve
requirements
▪ Changes in discount
rate
Inflation: Its causes and effects

Open economy Macroeconomics: Basic

Concepts.

•
Net exports and Net foreign
investment
• Saving, investment and their
relationship to international
trade
• Real and nominal exchange
rates
• Determination of Nominal
exchange rate:
Aggregate Demand and Aggregate Supply CLO6 Quiz 4

• AD and Changes in AD
• AS and Changes in AS
• Equilibrium and Changes in
Equilibrium
14
Fiscal Policy, Deficit, and Debt

• Fiscal policy-Components,
Functions
• Evaluating Fiscal Policy
• The Public Debt
Current Issues in Macro Theory and Policy CLO7

• What Causes Macro

Instability
•
15
• Major Issues in Pakistan
Economy:
• China-Pakistan Economics
Corridor (CPEC)

Project Presentations
16
Revision

LEARNING RESOURCES
 Books:
- O'Sullivan, A., Sheffrin, S., & Perez, S., (2019). Survey of Economics: Principles, Applications, and Tools, 8th
Edition, Boston: Pearson Education (Older editions are OK; the digital version is much cheaper). - Krugman, P.,

Wells, R., & Graddy, K., (2016). Essentials of Economics, 4th Edition, New York: Worth Publishers (3rd edition is
fine but 1st and 2nd are outdated).

Economics by McConnel, C. R. And Brue, S. L. , 14 Edition, Published by McGraw- Hill, Toronto, (Year: 2016)

Recommended References books: -

O'Sullivan, A., Sheffrin, S., & Perez, S., (2017). Economics: Principles, Applications, and Tools, 8th Edition, Boston:
Pearson Education. (Contains all the chapters from the compulsory textbook plus some material that will not be
covered in class, but it is usually cheaper). - Hubbard, G., & O’Brien, A., (2019). Economics, 7th Edition, Boston:
Pearson Education. - Parkin, M., (2019). Economics, 13th Edition, Boston: Pearson Education. - Acemoglu, D.,
Laibson, D., & List, J., (2018). Economics, 2nd Edition, Boston: Pearson Education. - Samuelson, P., & Nordhaus, W.,
(2009).
Economics, 19th Edition, Boston: McGraw-Hill Higher Education. - Mankiw, G., (2018). Principles of Economics, 8th
Edition, Boston: Cengage Learning. Additional Sources The following magazines, newspapers, and think tanks’
websites are recommended for familiarizing yourself with the most recent events and developments.

Press
www.ft.com (the Financial Times)
www.nytimes.com (the New York Times)
www.economist.com (The Economist)
www.wsj.com (The Wall Street Journal)
www.bloomberg.com (Bloomberg News)
www.forbes.com (Forbes Magazine)