Академический Документы
Профессиональный Документы
Культура Документы
• Contact Details:
• James MacGregor
• J.macgregor@surrey.ac.uk
• Jo Turner
• Joanne.turner@surrey.ac.uk
• How the course is organised
• Lectures: 1 hour; Tutorial: 2 hour
• Office Hours: email us for these – room: 34MS02
• Materials
• SurreyLearn: Lecture slides, tutorial exercises, questions…
• Textbook: BEGG, D., VERNASCA, FISCHER, DORNBUSCH, (2014) Economics, McGrawHill, 11th ed.
• Other: Freakonomics, Financial Times, Guardian, Times, Independent, websites, press articles, youtube….
Value to you
• An economic approach is different….Economics is the language of
business, lateral thinking, questioning
• We aim to change how you see the world and your role in it!
Your first/ second/ third job/ internship
• Dress smart
• Polite, enthusiastic, work hard
Ethical
Trade offs
• Exam (75%):
• Longer questions on theory and exercises
• Includes a short thinking/research question (10% of the
total exam) - check SurreyLearn at the end of Week 3 for a
list of possible questions
Strategy to study and succeed
• Attend lectures and tutorials
• Do the reading/ watching I give you
• Go through the exercise sets before each tutorial and after
• Start working on the research questions from Week 3
• Brush up both your (basic) maths skills and pens/ rulers
• Any course questions: email us
• Any administration questions: email Student Support
Business Economics – MAN1071
Semester 2 2018/19
• Week 1
• Introducing economics
• Scarcity
• Opportunity Costs
• Comparative advantage
Economics as a discipline
• Two perspectives ….in MAN1071 we study both
1. Microeconomics: analysis of how consumers, firms and specific industries make
economic decisions, e.g.
• How to best allocate time between work and leisure
• How to organise production with a given amount of workers and/or machinery
• How an industry sets prices
2. Macroeconomics: interactions in the economy as a whole (typically countries)
• Gross Domestic Product
• Level of unemployment
• Imports and export
Economics and other disciplines
• Psychology – buying everything, wanting everything
• Behavioural economics – drive digital interaction, gamification
• Financial – banking, accounting, insurance, derivatives, lending
• Household/Family – standard of living, poverty, tax
• Late-life care – global ageing population which is super-rich
• Health economics – making cures and prevention affordable
• Environmental – protecting valuable things with no existing
market
How do we learn about economics?
• Theory
• Case studies
• Application to SBS/ UoS students
• Competition
• Efficiency, choice
• Organisational health
• Price-value-cost
• Example: if you were not attending Surrey University, you would be earning
£25,000 per year. The opportunity cost of attending Surrey University for
one year is £25,000.
Scarcity. Production Possibility Frontier (1)
• Scarcity means that we make choices on how to use resources: what to
produce, how to produce and for whom to produce:
• To understand these decisions we need a framework that helps us
understand what we sacrifice when we choose a particular production
plan
• The Production Possibility Frontier (PPF) illustrates the competing
use of resources
• PPF illustrate the sacrifices, trade-offs, opportunity costs of options
• An economy that has a given amount of workers (limited resource) can
allocate them to several productive activities.
• For example: imagine a country that produces cars and phones: the amount
of each good that it is able to produce depends on how workers are
allocated
• If all workers are allocated to produce cars: Point A
• If all workers are allocated to produce phones: Point B
Scarcity. Production Possibility Frontier (2)
The Production Possibility Frontier shows for each quantity of
cars, the quantity of phones that can be produced and vice
versa
• Given the finite amount of workers, the combinations of
output that are possible and those that are not possible
(points inside the frontier, such as point F, and areas outside
the frontier, such as point C, respectively)
• The most efficient combinations of output: those that lie on
the frontier (for example, points A, D, E, B):
• The PPF shows these trade offs - increasing output of one
good, means sacrificing output of the other good
• Law of diminishing marginal returns: each extra worker
added to produce cars, for example, adds less to output than
the previous extra worker added
Comparative and Absolute Advantage
• Comparative Advantage: an individual or country has comparative
advantage compared to another in the production of a good if she/he/it
has a lower opportunity cost in producing it
• Absolute Advantage: the individual or country is she/he/it one with the
lowest cost (smaller quantity of inputs), the most efficient
• Based on comparative advantage, we can identify those producers
(individuals, countries, …) with the lowest opportunity costs
• An individual or country will specialise in those goods or services in which
he/she/it has comparative advantage
• Comparative advantage and specialisation are the foundations of trade
Price £48 NEW
Environmental
Ethical
Company
How much money do I have?
Your time
Trade offs
Minimum wage UK - £7.38 per hour
Cost of buying book (£48) versus its opportunity cost: value of £48 of partying – search for information
Book is roughly equivalent to 6.5 hours of work (BUT … resale value is £30)….
Actual cost is £18
Will I spend more than 2.5 hours (18/7.38 ~ 2.5) searching for information?
Tutorial – Week 1
• This ppt is on SurreyLearn later now
• Bring ruler, pens, paper
• This week:
• Read – Begg chps 1 and 2
• Read Freakonomics chp 3
• Read as widely as possible…Financial Times, Economist, Wall St
Journal
• Personalise these learnings…