Economics for Business 5th edition by Damian Ward, David Begg 007717528X 9780077175283

Section 1 Introduction

1 Economics for business

Economics for business at a glance

1.1 What is economics?

1.2 Why study economics for business?

1.3 Business data application: understanding the main economic resources within major economies

1.4 Appendix: the economist’s approach

Summary

Learning checklist

Questions

Exercises

Section 2 Understanding markets

2 Consumers in the marketplace

Demand theory at a glance

2.1 Business problem: what is the best price?

2.2 Introducing demand curves

2.3 Factors influencing demand

2.4 Measuring the responsiveness of demand

2.5 Income and cross-price elasticity

2.6 Business application: pricing strategies i—exploiting elasticities

2.7 Business application: pricing strategies ii—extracting consumer surplus

2.8 Business data applications

Summary

Learning checklist

Questions

Exercises

3 Firms in the marketplace

Cost theory at a glance

3.1 Business problem: managing fixed and variable costs

3.2 The short and long runs

3.3 The nature of productivity and costs in the short run

3.4 Output decisions in the short run

3.5 Cost inefficiency

3.6 The nature of productivity and costs in the long run

3.7 Business application: linking pricing with cost structures

3.8 Business application: footballers as sweaty assets

3.9 Business data application: wages and productivity

Summary

Learning checklist

Questions

Exercises

4 Markets in action

Market theory at a glance

4.1 Business problem: picking a winner

4.2 Bringing demand and supply together

4.3 Changes in supply and demand

4.4 Disequilibrium analysis

4.5 Price floors and ceilings

4.6 Pooling and separating equilibria

4.7 Business application: marketing pop concerts—a case of avoiding the equilibrium price

4.8 Business application: labour markets

4.9 Business data application: understanding supply and demand in the car market

Summary

Learning checklist

Questions

Exercises

Section 3 Competition and profitability

5 Market structure and firm performance

Perfect competition and monopoly at a glance

5.1 Business problem: where can you make profits?

5.2 Profit maximization

5.3 The spectrum of market structures

5.4 Perfect competition

5.5 Monopoly

5.6 When is a monopoly not a monopoly?

5.7 Business application: ‘Oops, we’re in the wrong box’—the case of the airline industry

5.8 Business data application: understanding the forces of competition

Summary

Learning checklist

Questions

Exercises

6 Strategic rivalry

Strategic rivalry at a glance

6.1 Business problem: will rivals always compete?

6.2 Monopolistic competition

6.3 Oligopoly theory: natural and strategic entry barriers

6.4 Oligopoly theory: competition among the big ones

6.5 Competition among rivals

6.6 Game theory

6.7 Game theory extension: reaction functions

6.8 Business application: compete, co-operate or gain a first-mover advantage?

6.9 Business application: managing supply costs— anonymous auctions for supermarket contracts

6.10 Business data application: competition in the cinema market

Summary

Learning checklist

Questions

Exercises

7 Growth strategies

Growth strategies at a glance

7.1 Business problem: how should companies grow?

7.2 Reasons for growth

7.3 Horizontal growth

7.4 Vertical growth

7.5 Diversified growth

7.6 Evidence on mergers

7.7 Business application: horizontal growth by merger

7.8 Business application: vertical growth—moving with the value

7.9 Business application: economies of scope

7.10 Business data application: trends in mergers and acquisitions

Summary

Learning checklist

Questions

Exercises

8 Governing business

Governing business at a glance

8.1 Business problem: managing managers

8.2 Profit maximization and the separation of ownership from control

8.3 Principal–agent theory

8.4 Business application: stock options and the reduction of agency costs

8.5 Regulation of business

8.6 Externalities

8.7 Dealing with externalities

8.8 Merit, demerit and public goods

8.9 Price volatility

8.10 Market power and competition policy

8.11 Assessing government interventions

8.12 Business application: carbon trading

8.13 Business data application: impact analysis and smart metering

Summary

Learning checklist

Questions

Exercises

Section 4 Domestic macroeconomics

9 Introduction to the macroeconomy

Macroeconomics at a glance

9.1 Business problem: business cycles and economic uncertainty

9.2 Macroeconomic issues

9.3 The circular flow of income

9.4 National income determination and business cycles

9.5 Business application: predicting the business cycle

9.6 Business application: profiting from recession

9.7 Business data application: finding and understanding data on key components of aggregate demand

Summary

Learning checklist

Questions

Exercises

10 Measuring macroeconomic variables and policy issues

Measurement and policy issues at a glance

10.1 Business problem: what are the macroeconomic policy issues?

10.2 GDP: measurement and policy

10.3 Inflation: measurement and policy

10.4 Unemployment

10.5 Balance of payments

10.6 Macroeconomic policies

10.7 Business application: international competitiveness and the macroeconomy

10.8 Business policy: inflation targeting?

10.9 Business data application: accuracy of economic data measurements

Summary

Learning checklist

Questions

Exercises

11 Expenditure and fiscal policy

Economic stability and demand-side policies at a glance

11.1 Business problem: who’s spending and where?

11.2 Consumption, investment expenditure and the business cycle

11.3 Fiscal policy

11.4 Government’s approach to managing fiscal policy

11.5 Foreign trade and aggregate demand

11.6 Business application: debt funding and crowding out

11.7 Business application: taxation or government spending?

11.8 Business data application: understanding the fiscal position and the implications for business

Summary

Learning checklist

Questions

Exercises

12 Money, banking and interest

Money, banking and interest at a glance

12.1 Business problem: understanding how the monetary environment influences the commercial environment

12.2 What is money?

12.3 The banking system

12.4 Regulation

12.5 Credit creation and the money supply

12.6 The demand for money

12.7 Money market equilibrium

12.8 Monetary policy

12.9 Business application: monetary policy and investment

12.10 Business application: the importance of banking to the economy

12.11 Business data application: financial markets and the impact of quantitative easing

Summary

Learning checklist

Questions

Exercises

13 Inflation, output and economic policy

Inflation, output and economic policy at a glance

13.1 Business problem: following a severe economic crisis, how does an economy return to equilibrium?

13.2 Short- and long-run macroeconomic equilibria

13.3 Employment, inflation and output

13.4 Inflation, aggregate demand and supply

13.5 Short- and long-run equilibria

13.6 Monetary policy rules

13.7 Adjustment speed

13.8 Business application: understanding the interest-rate path

13.9 Business application: recognizing the importance of real business cycles

13.10 Business data application: understanding the formation of inflationary expectations

Summary

Learning checklist

Questions

Exercises

14 Supply-side policies and economic growth

Supply-side policies and economic growth at a glance

14.1 Business problem: assessing economic growth

14.2 Growth and aggregate supply

14.3 Neoclassical growth theory

14.4 Endogenous growth theory

14.5 Supply-side policies

14.6 Business application: how does innovation promote business?

14.7 Business application: the BRIC economies

14.8 Business data application: digging behind gross capital formation

Summary

Learning checklist

Questions

Exercises

Section 5 Global economics

15 Exchange rates and the balance of payments

Exchange rates at a glance

15.1 Business problem: should the UK be a member of the euro?

15.2 Forex markets and exchange rate regimes

15.3 Fixed versus floating exchange rates

15.4 The balance of payments

15.5 Exchange rates and government policy

15.6 European monetary union

15.7 Business application: monetary sovereignty, exchange rate depreciation and export growth

15.8 Business application: hedging

15.9 Business data application: real exchange rates within the eurozone

Summary

Learning checklist

Questions

Exercises

16 Globalization

Globalization at a glance

16.1 Business problem: how do we take advantage of the global economy?

16.2 Why is the global economy developing?

16.3 A closer look at the EU

16.4 To what extent are markets becoming global?

16.5 Business application: globalization—exploiting comparative advantage

16.6 Business application: sources of international competitiveness