Economic Theory

1. Distinguish between microeconomic and macroeconomic principles.
2. Apply tools of economic analysis to business decision-making.
3. Analyze consumer behavior and market dynamics.
4. Evaluate the theories of production, cost, and profit.
5. Explain general equilibrium, inflation, and unemployment.
6. Apply economic theories to real-world business scenarios.

13 weeks, about 48 hours in total. Yours will differ.

1. Week 1Module 1:

   • Unit 1: The Basic Economic Principles · 2 hours

     Read the unit introduction to understand the scope of micro and macroeconomics.. Differentiate between microeconomic and macroeconomic analysis.. Define the concept of equilibrium in economics and its importance..

   • Unit 2: Tools and Models of Economic Analysis · 2 hours

     Define economic data and economic models.. Enumerate and explain the tools of economic analysis including diagrams, lines, and equations.. Explain the use of data and equations in the analysis of economic issues..

2. Week 2Module 1:

   • Unit 3: Market Participants and Circular Flow of Economic Activity · 2 hours

     Define the circular flow of economic activities.. Enumerate the major characteristics of market participants on a macro level.. Explain business decisions based on the information acquired from the unit..

   • Unit 1: Consumer Choice and Maximisation of Utility · 2 hours

     Explain consumer choice and the factors influencing it.. Define the concept of utility and its role in consumer decisions.. Explain the principle of utility maximization and how consumers make optimal choices..

3. Week 3Module 2:

   • Unit 2: Analysis of Individual and Market Demand · 2 hours

     Define individual and market demands and differentiate between them.. Explain demand schedules and how they represent consumer behavior.. Explain demand functions and their role in analyzing market demand..

   • Unit 3: Determinants of Market Demand · 2 hours

     List and explain the factors that affect the market demand for given products.. Explain the law of demand and its implications for businesses.. Describe and apply strategic production decisions based on demand determinants..

4. Week 4Module 2:

   • Unit 4: Price-Elasticity of Demand, the Demand Function, Total Revenue, and other Important Elasticities · 3 hours

     Describe the relationship between price elasticity and demand for a given commodity.. Explain the importance of income-elasticity of demand, promotional elasticity of sales, and elasticity of price expectations.. Explain the use of economic variables in pricing and marketing decisions..

5. Week 5Module 3:

   • Unit 1: The Theory of Production · 3 hours

     Understand the basic principles of production and how inputs are transformed into outputs.. Know how to develop a production function for given input combinations.. Begin to think in terms of optimal input combinations for production activities..

6. Week 6Module 3:

   • Unit 2: Optimal Input Combinations · 3 hours

     Know how to come up with the optimal input combinations for cost minimization.. Understand the two major instruments in the maximization of output, the isoquant curves and the budget constraint.. Understand how changes in input prices can affect optimal input combinations and make strategic input combinations..

7. Week 7Module 3:

   • Unit 3: The Cost Functions · 3 hours

     List the types of costs in a given production process.. Define average and marginal costs and their significance.. Explain the difference between Accounting and Economic profits.. Explain the relationship between short-and long-run costs of a given firm..

8. Week 8Module 3:

   • Unit 4: Profit Maximisation by Linear Programming Methods · 3 hours

     Define the basic concepts in linear programming techniques.. Enumerate the basic assumptions of linear programming.. Explain the linear programming technique in optimization problems.. Describe the efficient method of solving linear programming problems..

9. Week 9Module 4:

   • Unit 1: The Simple Model of National Income Determination · 3 hours

     Effectively identify the components of national income.. Determine the national income of a country given the necessary data.. Understand and use the concept of multiplier in macroeconomics.. Apply the national income concept in business decision making..

10. Week 10Module 4:

    • Unit 2: Government, Foreign Trade and the Economy · 3 hours

      Explain national income determination with government and foreign trade.. Enumerate the roles of the public and foreign sector in the development of an economy.. Define the balanced budget multiplier and its implications.. Explain the impact of marginal propensity to import on the income multiplier..

11. Week 11Module 4:

    • Unit 3: The Money Market Equilibrium, General Equilibrium, and Monetary Effects of Federal Government Budget · 3 hours

      Explain how an economy's equilibrium state is derived and how it can be used in policy analysis.. Explain the monetary effects of federal government budgets and how budget policies can be applied to business decisions.. Explain the liquidity trap and its implications for monetary policy..

12. Week 12Module 5:

    • Unit 4: Goals, Instruments, Targets, and Problems associated with Monetary Policies · 3 hours

      Explain monetary policies, their goals, instruments and targets.. Explain business decisions under different monetary policies.. Explain those monetary targets that can affect the business environment and know how to account for them in business decisions..

    • Unit 1: Income, Employment and the Price Level · 3 hours

      Explain the supply curve of a firm and its determinants.. Explain the aggregate supply and aggregate demand analysis in various perspectives.. Explain the relationship between aggregate demand and the level of employment.. Describe the interdependence between aggregate supply and aggregate demand, and the determination of the price level..

13. Week 13Module 6:

    • Unit 2: Inflation, Output and Unemployment · 3 hours

      Explain inflation and unemployment and their interrelation.. Define the long run relationship between money supply and inflation.. Explain inflation and output in the short run.. Explain the expectations-augmented Phillips curve.. Explain the relationship between aggregate demand and expected inflation..

    • Unit 1: Distribution of Income, Resource Allocation, and the Theory of Welfare Economics · 3 hours

      Explain the theory of income distribution and its relevance.. Enumerate the factors responsible for income inequality.. Enumerate and explain alternative income re-distribution programmes available to governments..