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EC229: Economics of Strategy

  • Christian Soegaard

    Module Lecturer
12/15 CATS - Department of Economics

Principal Aims

To develop the concepts and insights gained from Economics for Business which mainly explores short run business issues. This module will examine the longer run aspects of business and the economic environment in which companies operate in order to equip students with an understanding of fundamental concepts in micro and macroeconomics, as relevant for the study of strategic decisions of firms; develop a range of appropriate analytical skills, including descriptive, graphical and elementary mathematical methods used in the economic analysis of strategy; develop in students the capacity to apply analytical techniques to real world business problems and strategy choices.

Principal Learning Outcomes

By the end of this module, students should be able to understand key concepts such as long run cost curves, human capital investment, yield curves, aggregate supply/aggregate demand models, imperfect competition; demonstrate knowledge of economic trends, institutions and policies, especially in the context of strategic decisions of businesses; abstract and simplify basic economic problems through the application of simple theoretical models.

Syllabus

The module will typically cover the following topics:

Business economic approaches to business performance and strategy; Internal economics of firms. Costs in long run. Investment in physical and human capital. Intertemporal decisions; Firms and consumers in the market place. Indifference curve analysis of product choice and savings. Imperfect information; Exposure and macroeconomy recap of economics for business; Interest rates and financial markets; Understanding aggregate demand and aggregate supply. Price levels, inflation and unemployment. The importance of expectations; Exchange rates, exchange rate regimes fixed and floating. Optimum currency areas; Current macro issues e.g. oil prices, global imbalances; The long run. Illustrating how and exploring why GDP growth rates differ across countries and through time; Imperfect product markets. Differentiation, monopolistic competition and monopoly, barriers to entry; Strategic rivalry. Oligopoly, game theory, entry deterrence; Growth strategies. Horizontal and vertical growth, diversification; Governance and regulation. Market failure and government failure; Imperfect labour markets. The economics of trades unions; Summary of the economic approach to strategy.

Context

Pre or Co-requisites
EC131
Pre-requisite for
EC335
Restrictions
For 2nd year WBS students only
Part-year Availability for Visiting Students
Available on a part-year basis at the discretion of the module leader

Assessment

Assessment Method
12 CATS - 2 hour exam (100%)
15 CATS - Coursework (10%) + 2 hour exam (90%)
Coursework Details
One assignment (10%)
Exam Timing
May/June

Exam Rubric

12 CATS - Time Allowed: 2 Hours.

Answer ALL THREE questions from Section A (60 marks total). Answer ONE question from Section B (40 marks total). Answer Section A questions in one booklet and Section B questions in a separate booklet.

Approved pocket calculators are allowed.

Read carefully the instructions on the answer book provided and make sure that the particulars required are entered on each answer book. If you answer more questions than are required and do not indicate which answers should be ignored, we will mark the requisite number of answers in the order in which they appear in the answer book(s): answers beyond that number will not be considered.


15 CATS - Time Allowed: 2 Hours.

Answer ALL THREE questions from Section A (60 marks total). Answer ONE question from Section B (40 marks total). Answer Section A questions in one booklet and Section B questions in a separate booklet.

Approved pocket calculators are allowed.

Read carefully the instructions on the answer book provided and make sure that the particulars required are entered on each answer book. If you answer more questions than are required and do not indicate which answers should be ignored, we will mark the requisite number of answers in the order in which they appear in the answer book(s): answers beyond that number will not be considered.

Previous exam papers can be found in the University’s past papers archive. Please note that previous exam papers may not have operated under the same exam rubric or assessment weightings as those for the current academic year. The content of past papers may also be different.

Reading Lists