Section I E Module Outline plan Maharaja Surajmal Institute Affiliated to GGSIPU Delhi Course Bachelor of Business Administration Business Economics BBA BBA B I 17107 18107 Semester I Credit 4 Module Contributor s Dr Jasbir Singh Dr Suhasini Parashar Subject Module On July 2021 1 SYLLABUS Syllabus of Business Economics Paper Code 17107 18107 Introduction to Business Economics and Fundamental concepts Definitions of Business Economics Nature of Business Economics Scope of Business Economics Difference between Business Economics and Economics Contribution and Application of Business Economics to Business Micro vs Macro Economics Opportunity Costs Time Value of Money Marginalism Incrementalism Market Forces and Equilibrium Risk Return and Profits Consumer Behavior and Demand Analysis Cardinal Utility Approach Diminishing Marginal Utility Law of Equi Marginal Utility Ordinal Utility Approach Indifference Curves Marginal Rate of Substitution Budget Line and Consumer Equilibrium Theory of Demand Law of Demand Movement along vs Shift in Demand Curve Concept of Measurement of Elasticity of Demand Factors Affecting Elasticity of Demand Income Elasticity of Demand Cross Elasticity of Demand Advertising Elasticity of Demand Demand Forecasting Need Objectives of Demand Forecasting Methods of Demand Forecasting Unit I Unit II Unit III Theory of Production Meaning and Concept of Production Fixed and Variable Factors Law of Variable Proportion Short Run Production Analysis ISO QUANTS Assumptions Properties Equilibrium Law of Returns to a Scale Long Run Production Analysis through the use of ISO QUANTS Increasing Constant Diminishing Return to Scale Unit IV Cost Analysis Price Output Decisions Concept of Cost Cost Function Short Run Cost Function Long Run Cost Function Economies and Diseconomies of Scale Explicit Cost and Implicit Cost Private and Social Cost Modern Theory of Cost Pricing Under Perfect Competition Pricing Under Monopoly Equilibrium in Short Long Run Control of Monopoly Price Discrimination Pricing Under Monopolistic Competition Pricing Under Oligopoly Kournot s Duopoly model Bertrand Duopoly Model Edgeworth Model Collusive Non Collusive model Kink Demand Curve Price leadership Low Cost Dominant Firm Barometric Price Leadership 2 TABLE OF CONTENT Contents Introduction Unit 1 Introduction to Business Economics Fundamental Concept Page Number 5 23 Chapter1 Nature Scope Definition of Business Economics 5 8 Chapter 2 Difference between Business Economics and Economics Micro VS Macro 9 10 Economics Positivistic Normative Approach Chapter 3 Contribution and Application of Business Economics to Business Chapter 4 Opportunity Cost Time Value of Money Chapter 5 Marginalism and Incrementalism Chapter 6 Market Forces and Equilibrium Chapter 7 Risk Return and Profit Unit 2 Consumer Behavior and Demand Analysis Chapter 1 Cardinal Utility Approach Diminishing MU Chapter 2 Law of Equi MU Chapter 3 Ordinal Utility Approach Indifference Curve MRS Budget Line and 32 37 Consumer Equilibrium Chapter 4 Theory of Demand and Law of Demand Movement and Shift in Demand 38 43 Chapter 5 Elasticity and Measurement of Elasticity of Demand Nature of Goods and Elasticity of Demand Chapter6 Forecasting Need Objective and Methods Unit 3 Theory of Production Chapter 1 Factor of Production and production Function Chapter 2 Short Run Production Analysis Laws of variable Proportion Chapter 3 Long Run Production Analysis Laws of Returns to scale Isoquants and producer equlibrium Chapter 4 Economies and Diseconomies Scale Unit 4 Cost Analysis and Price out put Decision Chapter 1 Types of Costs Short and Long Term Chapter 2 Pricing under Perfect Competition Chapter 3 Pricing Under Monopoly and Price Discrimination 3 11 12 13 14 15 17 18 18 19 23 24 60 24 29 30 31 44 55 56 60 61 91 61 75 76 82 83 85 86 91 92 130 92 100 101 109 110 119 120 124 125 130 131 151 Chapter 4 Pricing under Monopolistic Competition Chapter 5 Pricing under Oligopoly Competition MCQ Multiple Choice Question Glossory and Key Words References and Further Readings 1 Samuelsons Nordhans W D 19th ed 2010 Economics Tata Mcgraw Hill 2 Diwedi D N 8th edition 2015 Managerial Economics Vikas Publishing House 3 Thomas CR 10th edition 2014 Managerial Economics Mcgraw Hill Education 4 Kreps D 2nd edition 2010 Micro Economics for Managers Viva Books Pvt Ltd 5 Mankin N G 7th edition 2014 Principles of Economics Cengage Learning 6 Petersons 2nd edition 2012 Managerial Economics Pearsons Education 7 Chaturvedi D D Latest Edition Business Economics 4 NATURE AND SCOPE OF BUSINESS ECONOMICS UNIT I CHAPTER 1 Nature of Economics WHAT IS ECONOMICS i Economics is a social science that studies man s activities concerning with the maximum Satisfaction of wants or with the promotion of welfare and economic growth by the efficient consumption production and exchange of scarce means having alternative uses ii Economics is regarded as both science and art at the same time since science requires art art requires science each being complementary to each other LIMITATIONS I II Study of human activities only Study of economic activities III Study of social man IV Study of average or normal man IV Measuring rod of money SIGNIFICANCE THEORETICAL IMPORTANCE PRACTICAL IMPORTANCE It inculcates the logical faculty Advantage to consumer Increase in knowledge Advantage to the producer Development of reasoning power Advantage to the laborers Advantage to the society BUSINESS ECONOMICS MEANING i Business or managerial economics is that part of economic theory which deals with the application of economic tools and concepts to the solution of business problem or the problem of resource allocation among the competing ends ii Business economics refer to the application of economic theory and decision science tools to find the optimal solution of business decision problems iii Business economics is concerned with decision making of economic nature iv Business economics is goal oriented and prescriptive It deals with how decisions should be made by the managers to achieve the organisational goals v Business economics is both conceptual and metrical 5 1 2 3 4 vi It is pragmatic It is concerned with those analytical tools which are useful in decision making vii Business economics is both science and art Since business economics is used as a systematic knowledge therefore it is a science As it studies factual situations so it is a real science and at the same time as it determines ideals for the
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