PROGRAMME: Interdepartmental Programme of Postgraduate Studies in Business Administration (M.B.A.)

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1 PROGRAMME: Interdepartmental Programme of Postgraduate Studies in Business Administration (M.B.A.) Compulsory Course: Principles of Economic Theory and Policy Semester: 1st Instructors: Velentzas Konstantinos, Professor Off: 406 tel: vele@uom.gr Course Description The nature and method of economics. Basic assumptions and definitions. Production possibilities curve, opportunity cost, and the benefits of trade. Demand, supply and the market. Elasticities of demand and supply. Consumer surplus and producer surplus. Production and cost of production. Price and output determination in pure competition, pure monopoly, monopolistic competition and oligopoly. Course Objectives The objective of this course is to give the student the basis to understand how firms and households respond to changes in price of goods and services, differing economic conditions, or other factors that influence behavior using the principles of supply and demand. The student, using the concepts learned, will be able to describe the cause and effect of a change in one or more economic conditions on markets, households and firms. Student Evaluation Final exam 80% and homework 20%. Recommended Textbook Begg, D., Fischer, S. and Dornbusch, R. (2005), "Economics", 8th edition, McGraw- Hill. Additional Bibliography Orchard, E.W., Glen, J. and Eden, J. (1997), "Business Economics", Blackwell. Salvatore, D. (1984), "Managerial Economics", McGraw-Hill. Velentzas, K. (2011), "Introduction to Economic Analysis: Problems and Applications", second edition, E. Benou, Athens.

2 Lecture Outline WEEK DISCUSSION TOPIC Part One: Microeconomics 1 Basic assumptions and definitions. Production possibilities curve, opportunity cost, and the benefits of trade. 2 Demand and elasticities of demand. Consumer surplus. 3 Supply and elasticity of supply. Producer surplus. The market. 4 Production and cost of production. 5 Perfect competition. 6 Pure monopoly, monopolistic competition and oligopoly. Part two: Macroeconomics Final Exams

3 Part two: Macroeconomics The basic macroeconomic magnitudes National accounts The simple Keynesian model. The importance of aggregate demand in the determination of the equilibrium level of income Operation of the simple keynesian model. Multipliers & fiscal policy Money & its functions, money demand and supply, monetary control, factors affecting money demand, short run interest rate Inflation: definition & measurement, types of inflation, inflation as a monetary phenomenon, the cost of inflation, disinflation. Unemployment: measurement & problems, the labour market in the classical model, labour market equilibrium and full employment, natural rate of unemployment 13 Final Exams

4 UNIVERSITY OF MACEDONIA MBA PRINCIPLES OF ECONOMIC THEORY AND POLICY Part 1 : Microeconomics Syllabus, Winter 2017 Instructor: Christos Constantatos Office: 503 (economics), Tel.: , cconst@uom.gr Course Objective: To present and analyze firms economic decisions, as well as the workings of different types of market structures. Special emphasis will be given to price and quantity strategies of firms in imperfectly competitive markets. For this purpose, some basic elements of game theory will be also reviewed. Main reference: Thomas, Christopher R., and S. Charles Maurice, Managerial Economics, Foundations of Business Analysis and Strategy. McGraw-Hill International Edition Student evaluation : A final exam will determine the mark for the microeconomics part. The final mark will be calculated as an equal-weights average between the micro- and macro exams. Description of the Material : Lecture 1: Consumer Value and Exchange Total and Marginal Value The Demand Function (2.1, 2.4) Movements along vs shifts of the demand curve Consumers Surplus Individual vs market demand (5.5) Price Elasticity of Demand ( ) Other Elasticities of Demand (6.6) Lecture 2: Cost Opportunity Cost vs Accounting Cost Sunk costs and economic decisions

5 Short-run Cost Function and related curves (8.3, 8.4) Long-run Cost Function (9.5, 9.6, 9.7) Economies and Diseconomies of Scale Lecture 3: Principles of Profit maximization and Monopoly Marginal Revenue; why is it generally lower than price? The optimality rule: MR = MC (12.3) Profits or Losses When must a firm shut down? Causes of monopoly (12.2) Measurement of market power (12.1) Lecture 4A: Equilibrium in competitive markets Definition of a perfectly competitive market (11.1) The supply curve (2.2) Market equilibrium (2.3) Demand and supply shifts (2.5) Lecture 4B: Price Discrimination The idea (14.1) 3 rd Degree pd (14.4) 1 st Degree pd and two-part tariffs (14.2) 2 nd Degree pd (14.3 General idea and description of practices 2 nd Degree with two-part tariffs Lecture 5: Games I: Introduction and simultaneous games (13.1) The idea of games, and the description of a game Equilibrium in Dominant Strategies and Prisoner s Dilemma Nash equilibrium and best-reply functions Application: Cournot competition Lecture 6: Games II: Sequential Games (13.2) Subgame perfect Equilibrium The strategic role of commitment Backwards induction and Stackelberg equilibrium Entry Deterrence (13.4)