Economics for Business

Description

Develop an understanding of economics applied to the world of business. Economics for Business, 9th Edition is the ideal textbook for students studying Economics as part of a Business Studies degree or diploma. Clear, engaging, and packed with useful features, the text introduces the key principles of economics, illustrating how they can be used to understand real business problems and aspects of the business environment. The new, thoroughly updated edition reflects recent events that have shaken the business world. These include the Covid-19 pandemic, Brexit, and rampant inflation caused first by supply-chain problems after global lockdowns and then by the surge in energy and food prices following the invasion of Ukraine. Each chapter includes topical examples, news stories, and case studies from real businesses to explain and illustrate key economic concepts, as well as activities, questions, and useful summaries to help you check your understanding. Access the free student website which accompanies this book for additional learning support, including animated explainers of key economic models, extra case studies and answers to in-text questions. Pair this text with MyLab®Economics MyLab®is the teaching and learning platform that empowers you to reach every student. By combining trusted author content with digital tools and a flexible platform, MyLab Economics personalises the learning experience and improves results for each student. If you would like to purchase both the physical text and MyLab® Economics, search for: 9781292440255 Economics for Business,9th Edition ’MyLab via Bundle’ which consists of:  Print textbookeBookMyLab®Economics Front Cover Half Title Title Page Copyright Page About the authors Brief contents Detailed contents Preface Publisher's acknowledgements Part A BUSINESS AND ECONOMICS 1 The business environment and business economics 1.1 The business environment 1.2 The structure of industry 1.3 The determinants of business performance Box 1.1 A Lidl success story Box 1.2 The biotechnology industry Summary Review questions 2 Economics and the world of business 2.1 What do economists study? 2.2 Business economics: microeconomic choices 2.3 Business economics: the macroeconomic environment 2.4 Techniques of economic analysis Box 2.1 What, how and for whom? Box 2.2 The opportunity costs of studying economics Box 2.3 Looking at macroeconomic data Summary Review questions 3 Business organisations 3.1 The nature of firms 3.2 The firm as a legal entity 3.3 The internal organisation of the firm Box 3.1 Exploiting asymmetric information Box 3.2 Managers, pay and performance Box 3.3 The changing nature of business Summary Review questions Additional Part A case studies on the Economics for Business student website Websites relevant to Part A Part B BUSINESS AND MARKETS 4 The working of competitive markets 4.1 Business in a competitive market 4.2 Demand 4.3 Supply 4.4 Price and output determination Box 4.1 UK house prices Box 4.2 Stock market prices Box 4.3 Controlling prices Summary Review questions 5 Business in a market environment 5.1 Price elasticity of demand 5.2 The importance of price elasticity of demand to business decision making 5.3 Other elasticities 5.4 The time dimension of market adjustment 5.5 Dealing with uncertainty Box 5.1 The measurement of elasticity Box 5.2 Elasticity and the incidence of tax Box 5.3 Adjusting to oil price shocks Box 5.4 Bubble, bubble, toil and trouble Summary Review questions Additional Part B case studies on the Economics for Business student website Websites relevant to Part B Part C BACKGROUND TO DEMAND 6 Demand and the consumer 6.1 Marginal utility theory 6.2 Demand under conditions of risk and uncertainty 6.3 The characteristics approach to analysing consumer demand Box 6.1 Calculating consumer surplus Box 6.2 The marginal utility revolution: Jevons, Menger, Walras Box 6.3 Adverse selection in the insurance market Box 6.4 Dealing with moral hazard and adverse selection Summary Review questions Web appendix in the case studies section of the Economics for Business student website 7 Behavioural economics of the consumer 7.1 How does behavioural economics differ from standard theory? 7.2 Framing and the reference point for decisions 7.3 Caring about the pay-offs to others 7.4 Government policy to influence behaviour Box 7.1 Choice overload Box 7.2 The endowment effect Box 7.3 The best made plans Box 7.4 A simple experiment to test for social preferences Summary Review questions 8 Firms and the consumer 8.1 Estimating demand functions 8.2 Forecasting demand 8.3 Product differentiation 8.4 Marketing the product 8.5 Advertising Box 8.1 The battle of the brands Box 8.2 Different types of online advertising Summary Review questions Additional Part C case studies on the Economics for Business student website Websites relevant to Part C Part D BACKGROUND TO SUPPLY 9 Costs of production 9.1 The meaning of costs 9.2 Production in the short run 9.3 Costs in the short run 9.4 Production in the long run 9.5 Costs in the long run Box 9.1 Should we ignore sunk costs? Box 9.2 How vulnerable are you? Box 9.3 Lights, camera, action Box 9.4 Minimum efficient scale Box 9.5 Fashion cycles Summary Review questions 10 Revenue and profit 10.1 Revenue 10.2 Profit maximisation Box 10.1 Costs, revenue and profits Box 10.2 Selling ice cream when I was a student Box 10.3 Monarch's turbulence Summary Review questions Additional Part D case studies on the Economics for Business student website Websites relevant to Part D Part E SUPPLY: SHORT-RUN DECISION MAKING BY FIRMS 11 Profit maximisation under perfect competition and monopoly 11.1 Alternative market structures 11.2 Perfect competition 11.3 Monopoly 11.4 Potential competition or potential monopoly? The theory of contestable markets Box 11.1 A fast food race to the bottom Box 11.2 E-commerce Box 11.3 Premier league football: the Sky is the limit Box 11.4 'It could be you' Summary Review questions 12 Profit maximisation under imperfect competition 12.1 Monopolistic competition 12.2 Oligopoly 12.3 Game theory Box 12.1 OPEC Box 12.2 Oligopoly and oligopsony Box 12.3 The prisoners' dilemma Box 12.4 The Hunger Games Summary Review questions 13 Alternative theories of the firm 13.1 Problems with traditional theory 13.2 Behavioural economics of the firm 13.3 Alternative maximising theories 13.4 Multiple aims Box 13.1 How firms increase profits by understanding 'irrational' consumers Box 13.2 Constraints on firms' pricing Box 13.3 Stakeholder power Summary Review questions Additional Part E case studies on the Economics for Business student website Websites relevant to Part E Part F SUPPLY: ALTERNATIVE STRATEGIES 14 An introduction to business strategy 14.1 What is strategy? 14.2 Strategic analysis 14.3 Strategic choice 14.4 Business strategy in a global economy 14.5 Strategy: evaluation and implementation Box 14.1 Business strategy the Samsung way Box 14.2 Hybrid strategy Summary Review questions 15 Growth strategy 15.1 Growth and profitability 15.2 Constraints on growth 15.3 Alternative growth strategies 15.4 Internal growth 15.5 External growth through merger 15.6 External growth through strategic alliance 15.7 Explaining external firm growth: a transaction costs approach Box 15.1 Global merger activity Box 15.2 How many firms does it take to make an iPhone? Box 15.3 The day the world stopped Summary Review questions 16 The small-firm sector 16.1 Defining the small-firm sector 16.2 The survival, growth and failure of small businesses 16.3 Government assistance and the small firm Box 16.1 Capturing global entrepreneurial spirit Box 16.2 Hotel Chocolat Summary Review questions 17 Pricing strategy 17.1 Pricing and market structure 17.2 Alternative pricing strategies 17.3 Price discrimination 17.4 Multiple product pricing 17.5 Transfer pricing 17.6 Pricing and the product life cycle Box 17.1 Personalised pricing in digital markets Box 17.2 A quantity discount pricing strategy Box 17.3 Selling goods separately or together? The impact of bundling Summary Review questions Additional Part F case studies on the Economics for Business student website Websites relevant to Part F Part G THE FIRM IN THE FACTOR MARKET 18 Labour markets, wages and industrial relations 18.1 Market-determined wage rates and employment 18.2 Power in the labour market 18.3 Low pay and discrimination 18.4 The flexible firm and the market for labour Box 18.1 What do post, airlines, bins, buses, rail, tube and universities have in common? Box 18.2 UK tax credits Box 18.3 New ways of working Summary Review questions 19 Investment and the employment of capital 19.1 The pricing of capital and capital services 19.2 The demand for and supply of capital services 19.3 Investment appraisal 19.4 Financing investment 19.5 The stock market Box 19.1 Investing in roads Box 19.2 The ratios to measure success Box 19.3 Financing innovation Summary Review questions Additional Part G case studies on the Economics for Business student website Websites relevant to Part G Part H THE RELATIONSHIP BETWEEN GOVERNMENT AND BUSINESS 20 Reasons for government intervention in the market 20.1 Markets and the role of government 20.2 Types of market failure 20.3 Government intervention in the market 20.4 The case for less government intervention 20.5 Firms and social responsibility Box 20.1 Can the market provide adequate protection for the environment? Box 20.2 A commons solution Box 20.3 Deadweight loss from taxes on goods and services Box 20.4 ESG scores Summary Review questions 21 Government and the firm 21.1 Competition policy 21.2 Policies towards research and development (R&D) 21.3 Policies towards training Box 21.1 Expensive chips or are they? Box 21.2 The R&D scoreboard Box 21.3 The Apprenticeship Levy Summary Review questions 22 Government and the market 22.1 Environmental policy 22.2 Transport policy 22.3 Privatisation and regulation Box 22.1 The economics of biodiversity Box 22.2 Placing a price on CO2 emissions Box 22.3 Road pricing in Singapore Box 22.4 The right track to reform? Summary Review questions Additional Part H case studies on the Economics for Business student website Websites relevant to Part H Part I BUSINESS IN THE INTERNATIONAL ENVIRONMENT 23 Globalisation and multinational business 23.1 Globalisation: setting the scene 23.2 What is a multinational corporation? 23.3 Trends in multinational investment 23.4 Why do businesses go multinational? 23.5 The advantages of MNC investment for the host state 23.6 The disadvantages of MNC investment for the host state 23.7 Multinational corporations and developing economies Box 23.1 M&As and greenfield FDI Box 23.2 Attracting foreign investment Box 23.3 Grocers go shopping in the Eastern aisle Summary Review questions 24 International trade 24.1 Trading patterns 24.2 The advantages of trade 24.3 Arguments for restricting trade 24.4 The world trading system and the WTO Box 24.1 Strategic trade theory Box 24.2 Giving trade a bad name Box 24.3 The Doha development agenda Summary Review questions 25 Trading blocs 25.1 Preferential trading 25.2 Preferential trading in practice 25.3 The European Union 25.4 The UK and Brexit Box 25.1 Features of the European single market Box 25.2 The Single Market Scoreboard Summary Review questions Additional Part I case studies on the Economics for Business student website Websites relevant to Part I Part J THE MACROECONOMIC ENVIRONMENT 26 The macroeconomic environment of business 26.1 Introduction to the macroeconomic environment 26.2 Economic volatility and the business cycle 26.3 The circular flow of income 26.4 Unemployment 26.5 Inflation 26.6 Long-term economic growth Box 26.1 Output gaps Box 26.2 The duration of unemployment Box 26.3 Output gaps and inflation Box 26.4 The UK's stock of human capital Summary Review questions Appendix: Measuring national income and output Summary to appendix Review questions to appendix 27 The balance of payments and exchange rates 27.1 The balance of payments account 27.2 The exchange rate 27.3 Exchange rates and the balance of payments 27.4 Fixed versus floating exchange rates Box 27.1 Nominal and real exchange rates Box 27.2 Dealing in foreign exchange Box 27.3 The importance of international financial movements Box 27.4 The euro/dollar see-saw Summary Review questions 28 The financial system, money and interest rates 28.1 The meaning and functions of money 28.2 The financial system 28.3 The supply of money 28.4 The demand for money 28.5 Equilibrium 28.6 Money, aggregate demand and inflation Box 28.1 Financial intermediation Box 28.2 Growth of banks' balance sheets Box 28.3 Residential mortgages and securitisation Box 28.4 Minsky's financial instability hypothesis Summary Review questions 29 Business activity, unemployment and inflation 29.1 The simple Keynesian model of business activity 29.2 Alternative perspectives on aggregate supply 29.3 Output, unemployment and inflation 29.4 Inflation rate targeting and unemployment 29.5 The volatility of private-sector spending Box 29.1 Short-run aggregate supply Box 29.2 The accelerationist hypothesis Box 29.3 Confidence and spending Summary Review questions Additional Part J case studies on the Economics for Business student website Websites relevant to Part J Part K MACROECONOMIC POLICY 30 Demand-side policy 30.1 Fiscal policy and the public finances 30.2 The use of fiscal policy 30.3 Monetary policy 30.4 Attitudes towards demand management Box 30.1 The fiscal impulse Box 30.2 The evolving fiscal frameworks in the European Union Box 30.3 The operation of monetary policy in the UK Box 30.4 Quantitative easing Box 30.5 Monetary policy in the eurozone Summary Review questions 31 Supply-side policy 31.1 Supply-side problems 31.2 Market-orientated supply-side policies 31.3 Interventionist supply-side policies 31.4 Regional policy Box 31.1 Measuring labour productivity Box 31.2 Getting intensive with capital Box 31.3 Apprenticeships and the economic arguments for intervention Summary Review questions 32 International economic policy 32.1 Global interdependence 32.2 International harmonisation of economic policies 32.3 European economic and monetary union 32.4 Alternative policies for achieving currency stability Box 32.1 Trade imbalances in the USA and China Box 32.2 Optimal currency areas Box 32.3 The Tobin tax Summary Review questions Additional Part K case studies on the Economics for Business student website Websites relevant to Part K Web appendix Key ideas Glossary Index Back Cover