Introduction to Economics
| Module title | Introduction to Economics |
|---|---|
| Module code | BEP1120 |
| Academic year | 2025/6 |
| Credits | 15 |
| Module staff | Akhil Vohra (Convenor) |
| Duration: Term | 1 | 2 | 3 |
|---|---|---|---|
| Duration: Weeks | 11 | 0 | 0 |
| Number students taking module (anticipated) | 60 |
|---|
Module description
This module equips you with the tools and frameworks to analyse incentives and how changes in rules and environments shape behaviour. You will explore key economic concepts and learn to apply quantitative models that are relatively straightforward to use, to analyse economic phenomena. By emphasising real-world applications, the module will demonstrate how economic principles can be used to address business challenges and evaluate policy impacts. While the high-level ideas are applied within a business framework, they are relevant in many other situations and contexts.
Module aims - intentions of the module
This module presents an integrated approach to understanding the economic behaviour of economic actors, focusing on strategic decisions for economic organizations and the transactions they perform. The module aims to discuss a number of advanced topics in economic organization theory, institutional and organization economics, and theory of the firm of distinct relevance for management research.
In particular, this module aims to:
- Provide an essential, simple, useable body of economic theories
- Inspire you to ‘think like an economist’ in your everyday life
- Encourage you to think critically about incentives and trade-offs
- Give you an understanding of how businesses use economic theory to make decisions
- Develop your ability to think critically about strategic situations
- Foster an ability to reason through and form cohesive, rigorous arguments
Intended Learning Outcomes (ILOs)
ILO: Module-specific skills
On successfully completing the module you will be able to...
- 1. apply the economic way of thinking to enable students to understand economic and incentive problems;
- 2. explain how the economic environment will affect business strategies;
- 3. explain the ways in which firms make decisions and the factors that determine these decisions;
- 4. describe the competitive environment in which firms operate and explain how that will affect decision-making;
ILO: Discipline-specific skills
On successfully completing the module you will be able to...
- 5. demonstrate the ability to reason coherently about strategic situations;
- 6. apply economic theory to current economic problems;
- 7. identify relevant sources of data, manipulate and interpret the data and apply critical thinking to economic problems;
ILO: Personal and key skills
On successfully completing the module you will be able to...
- 8. demonstrate problem-solving and independent study skills;
Syllabus plan
This course introduces fundamental economic theories and strategies that shape firm behaviour. We will learn and apply game theory and microeconomics’ tools to understand how firms choose different levers at their disposal, such as price, capacity, positioning, and cost, to achieve and retain a competitive advantage. Additionally, we will examine the impact of externalities and asymmetric information in competitive settings to highlight the role of institutions and government in mitigating their adverse effects.
We will cover the following topics:
- Pricing Theory: How do firms optimally price goods when buyers have private information about their values for the good?
- Game Theory: How do we model strategic interactions between counterparties? How can we predict the outcomes of strategic settings?
- Competition: What is the effect of competition on pricing and consumer welfare? How can we apply models of competition to understand what factors shape different industries?
- Externalities: When firm production decisions have unintended consequences (e.g. pollution), how do we incorporate it into our models? What steps can be taken to mitigate the damage associated with externalities? What is the role of government in this?
- Asymmetric Information: How does differential levels of information amongst counterparties affect contracts, marketplaces, and transactions?
Learning activities and teaching methods (given in hours of study time)
| Scheduled Learning and Teaching Activities | Guided independent study | Placement / study abroad |
|---|---|---|
| 20 | 130 | 0 |
Details of learning activities and teaching methods
| Category | Hours of study time | Description |
|---|---|---|
| Scheduled learning and teaching activity | 16 | Lectures (2 hours per week for 8 weeks) |
| Scheduled learning and teaching activity | 4 | Tutorials with discussion (4 x 1-hour) |
| Guided independent study | 130 | Reading, analysis, research and assessment preparation - both revision for examination and assessment |
Formative assessment
| Form of assessment | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|
| Exercise Sheets | Weekly | 1-8 | Detailed solutions posted on ELE; Additional feedback as requested. |
Summative assessment (% of credit)
| Coursework | Written exams | Practical exams |
|---|---|---|
| 30 | 70 | 0 |
Details of summative assessment
| Form of assessment | % of credit | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|---|
| Final Exam | 70 | 2 hours | 1-8 | Detailed solutions and verbal feedback as requested |
| Individual Problem Set | 30 | Equivalent to 1200 words maximum. Two weeks | 5, 7, 8 | Detailed solutions and verbal feedback as requested |
Details of re-assessment (where required by referral or deferral)
| Original form of assessment | Form of re-assessment | ILOs re-assessed | Timescale for re-assessment |
|---|---|---|---|
| Final exam (70%) | Final exam (70%), 2 hours | 1-8 | Referral/deferral period |
| Individual Problem Set (30%) | Individual Problem Set (30%), equivalent to 1200 words maximum | 5, 7, 8 | Referral/deferral period |
Re-assessment notes
A student if deferred via a single component of the assessment will be re-assessed in that component only.
Indicative learning resources - Basic reading
Basic reading:
- Akerlof, G. A. (1970). The Market for “Lemons": Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics, 84(3), 488-500
- Armstrong, M. (2006). Price Discrimination.
- Besanko, D., D. Dranove, M. Shanley, and S. Schaefer (2009). Economics of Strategy. John Wiley and Sons.
- Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386-405
- Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management Review, 14(1), 57-
- Pepall, L., D. Richards, and G. Norman (1999). Industrial Organization: Contemporary Theory and Practice. South-Western/Thomson.
- Rosser Jr, J. B. (2003). A Nobel prize for asymmetric information: the economic contributions of George Akerlof, Michael Spence and Joseph Stiglitz. Review of Political Economy, 15(1), 3-21
- Singh, N. and X. Vives. (1984). Price and Quantity Competition in a Differentiated Duopoly. The Rand Journal of Economics, 15(4), 546-554.
- Varian, H. (1989). Price Discrimination. The Handbook of Industrial Organization, 1, 597-654.
- Vohra, R. (2020). Prices and Quantities: Fundamentals of Microeconomics. Cambridge University Press.
Indicative learning resources - Web based and electronic resources
ELE – http://vle.exeter.ac.uk/course/view.php?id=5903
Key words search
Economic Modelling, Strategy, Pricing, Game Theory, Competition, Externalities, Asymmetric Information
| Credit value | 15 |
|---|---|
| Module ECTS | 7.5 |
| Module pre-requisites | None |
| Module co-requisites | None |
| NQF level (module) | 4 |
| Available as distance learning? | No |
| Origin date | 23/06/2021 |
| Last revision date | 10/02/2025 |
