Assignment
Overview
Economic Practices for Managers This course addresses the fundamental economic principles of decision making, including opportunity costs, factors of production, and competitive and comparative advantage. Risk and uncertainty are also analyzed.
In addition, students would apply sustainable business principles in a rapidly changing economic and social environment.
The course approaches these topics from the perspective of a practicing manager.
Module Readings
Complete the following readings early in the module:
Module overview
From your course textbook, Managerial economics: Economic tools for today's decision makers, read the following chapters:
Introduction
The Firm and Its Goals
Supply and Demand
Demand Elasticity
Assigned Reading:
From the Argosy University online library resources, read:
Cascio, W. F. (2006). The economic impact of employee behaviors on organizational performance. California Management Review, 48(4), 41-59.
Lawler, E. E., III, & Toole, E. (Eds.). America at work: Choices and challenges. Gordonsville, VA: Palgrave Macmillan.
Module In Brief: introduces the basic economic theories and principles that drive a company's day-to-day business decisions. You will also be familiarized with the basic economic problem of a business.
This module also describes the concepts of demand, supply, and elasticity and how their relationship helps predict market outcomes.
You will learn how demand and supply determine the prices of all the goods and services in a market-driven economy.
Module Overview:
Consider the last major sporting event that you watched on television. What did you give up to watch this show-the option of dining out with your friends or spending time with your family?
Let us extend this example to other stakeholders. Think of how competing teams would have traveled to the event. Probably, they chartered a flight. What was their gain? How did the airline decide whether or not to accept the charter?
We all make economic decisions every day of our lives. Economics is the science of making effective choices or decisions by examining the available alternatives
This module introduces the basic concepts of economics that will help you analyze and evaluate various alternatives and make effective day-to-day business decisions. To begin with, you will learn about the basic economic problem that a society faces.
You will then apply this knowledge to analyze the problem and make decisions in the context of your business.
Basic Economic Problem
The basic economic problem in any society is how to allocate resources among individuals to meet their demands for what they want to consume. While the individuals' needs are unlimited, the resources available to a society are limited.
To address this problem, societies take into account the production, the sale, and the consumption of goods and services, and compare alternative ways of using the limited resources. Each society, therefore, must find answers to these three basic questions to satisfactorily run the economy:
What goods and services to produce?
How to produce them?
For whom to produce them?
In the context of your business, these questions will help you analyze the operations within your company from an economic perspective and make decisions on how to make the best use of your company's scarce resources.
It will help you decide what goods and services should be produced and which ones you must forgo, which needs should be satisfied, and how much of the limited resources will be used to satisfy those needs.
Assignment: Effects of Price Changes
Instructions: Price changes can have a significant impact on the overall economy of a nation.
A product experiencing price change can lead to an exponential change in the prices of related products. The price of oil provides a good example of this concept. As oil prices increase, the price of gasoline also increases.
As almost all products rely on gasoline, either in the production process or in the distribution process, the prices of these products also increase.
As prices increase and incomes of consumers remain steady, spending decreases and products or services that have an elastic demand suffer. This assignment looks at some products you may be familiar with and allows you to analyze how price changes impact the overall economy.
Tasks:
Consider the last product or service you purchased for more than $50, excluding gasoline.
If the price of that product or service went up by 10% overnight, how would you adjust your behavior in the short term?
How would you adjust your behavior in the long term?
If you decide not to buy this product again, what will you buy instead?
Analyze who will be more sensitive to price changes in what kind of products.