Essential Economics for Business (formerly Economics and the Business Environment)

Cover......Page 1
Title Page......Page 4
Copyright Page......Page 5
Brief Contents......Page 6
Contents......Page 8
Preface......Page 10
Acknowledgements......Page 13
Aublisher’s Acknowledgements......Page 14
Part A Introduction......Page 16
 1 Business and the economic environment......Page 17
  1.1 The business organisation......Page 21
  1.2 The external business environment......Page 25
  Box 1.3 The changing nature of business......Page 33
  Box 1.1 A perfect partnership 3......Page 18
  Box 1.2 The biotechnology industry......Page 28
  Questions......Page 36
  Part end – additional case studies and relevant websites......Page 37
  2.1 Business in a perfectly competitive market......Page 39
  2.2 Demand......Page 41
  2.3 Supply......Page 45
  2.4 Price and output determination......Page 47
  2.5 Elasticity of demand and supply......Page 52
  Box 2.1 Stock market prices......Page 49
  Box 2.2 UK house prices......Page 53
  Box 2.3 Shall we put up our price?......Page 58
  Box 2.4 Speculation......Page 61
  Box 2.5 Market intervention......Page 63
  Questions......Page 65
  3.1 Demand and the firm......Page 66
  3.2 Understanding consumer behaviour......Page 67
  3.3 Behavioural economics......Page 74
  3.4 Estimating and predicting demand......Page 77
  3.5 Stimulating demand......Page 80
  Box 3.1 Rogue traders......Page 70
  Box 3.2 Problems for unwary insurance companies......Page 73
  Box 3.3 Nudging people......Page 76
  Box 3.4 Brands and own-brands......Page 83
  Box 3.5 Advertising and the long run......Page 86
  Questions......Page 88
 4 Supply decisions in a perfectly competitive market......Page 89
  4.1 Production in the short Run......Page 90
  4.2 Production and Costs: long Run......Page 97
  4.3 Revenue......Page 105
  4.4 Profit maximisation......Page 107
  Box 4.1 Diminishing returns and business......Page 91
  Box 4.2 Understanding your fixed costs......Page 95
  Box 4.3 Industrial clusters and competitiveness......Page 101
  Box 4.4 Minimum efficient scale......Page 103
  Box 4.5 C ost, revenue and profits......Page 106
  Box 4.6 E-commerce......Page 111
  Questions......Page 113
  Part end – additional case studies and relevant websites......Page 114
  5.1 Alternative market structures......Page 117
  5.2 Monopoly......Page 121
  5.3 Oligopoly......Page 126
  5.4 Game theory......Page 132
  5.5 Alternative aims of the firm......Page 137
  5.6 Setting price......Page 141
  Box 5.1 C oncentration ratios......Page 120
  Box 5.2 Windows cleaning......Page 124
  Box 5.3 O ligopolies: the good, the bad and the ugly......Page 130
  Box 5.4 The prisoners’ dilemma......Page 134
  Box 5.5 Stakeholder power?......Page 140
  Box 5.6 Pricing in practice......Page 145
  Questions......Page 147
  6.1 Strategic analysis......Page 148
  6.2 Strategic choice......Page 152
  6.3 Growth strategy......Page 158
  6.4 Financing growth and investment......Page 167
  6.5 Starting small......Page 169
  Box 6.1 Business strategy the Samsung way......Page 153
  Box 6.2 The ratios to measure success......Page 156
  Box 6.3 R ecessionary strategies......Page 163
  Box 6.4 The Dyson Dual Cyclone vacuum cleaner......Page 172
  Questions......Page 174
 7 Multinational corporations and business strategy in a global economy......Page 175
  7.1 Multinational corporations......Page 176
  7.2 Business strategy in a global economy......Page 181
  7.3 Problems facing multinationals......Page 189
  7.4 Multinationals and the host state......Page 190
  Box 7.1 Merger activity......Page 180
  Box 7.2 Attracting foreign investors......Page 185
  Box 7.3 Grocers go global......Page 188
  Box 7.4 Investing in China......Page 191
  Questions......Page 194
  8.1 Market-determined wage rates and employment......Page 195
  8.2 Power in the labour market......Page 201
  8.3 Minimum wages......Page 205
  8.4 The flexible firm and the market for labour......Page 207
  8.5 The labour market and incentives......Page 211
  Box 8.1 ‘Telecommuters’......Page 197
  Box 8.2 The winter of discontent......Page 203
  Box 8.3 Does gender inequality still exist?......Page 209
  Box 8.4 Education, earnings, productivity and talent......Page 214
  Questions......Page 217
 9 Government, the firm and the market......Page 218
  9.1 Market failures......Page 219
  9.2 Business ethics and corporate social responsibility......Page 224
  9.3 Government intervention in the market......Page 227
  9.4 Environmental policy......Page 228
  9.5 C ompetition policy and business behaviour......Page 235
  9.6 The regulation of business......Page 239
  Box 9.1 The problem of free-riders......Page 222
  Box 9.2 The Body Shop......Page 226
  Box 9.3 A stern warning......Page 229
  Box 9.4 The problem of urban traffic congestion......Page 233
  Box 9.5 From paper envelopes to canned mushrooms: the umpire strikes back......Page 238
  Questions......Page 241
  Part end – additional case studies and relevant websites......Page 242
  10.1 The key macroeconomic objectives......Page 245
  10.2 Business activity and the circular flow of income......Page 247
  10.3 The determination of business activity......Page 250
  10.4 The business cycle......Page 255
  10.5 Money, interest rates and business activity......Page 260
  10.6 Unemployment......Page 264
  10.7 Inflation......Page 268
  Box 10.1 Doing the sums......Page 252
  Box 10.2 The economics of playing host......Page 253
  Box 10.3 Business expectations and their effect on investment......Page 258
  Box 10.4 Inflation and unemployment: how costly?......Page 269
  Box 10.5 Inflation or deflation......Page 273
  Questions......Page 274
 11 National macroeconomic policy......Page 275
  11.1 Fiscal policy......Page 276
  11.2 Monetary policy......Page 284
  11.3 Supply-side policy......Page 294
  Box 11.1 The fiscal framework in the eurozone......Page 283
  Box 11.2 The central banks of the USA and the eurozone......Page 289
  Box 11.3 The credit crunch......Page 291
  Box 11.4 Japan’s volatile past and present......Page 295
  Box 11.5 Productivity......Page 299
  Box 11.6 R esearch and development......Page 301
  Questions......Page 303
 12 The global trading environment......Page 304
  12.1 International trade......Page 305
  12.2 Trade restrictions......Page 311
  12.3 The world trading system and the WTO_......Page 315
  12.4 The european union and the single market......Page 320
  Box 12.1 The changing face of comparative advantage......Page 309
  Box 12.2 Strategic trade theory......Page 313
  Box 12.3 Beyond Bananas......Page 317
  Box 12.4 Preferential trading......Page 319
  Box 12.5 The EU referendum debate and the aftermath of the brexit vote......Page 323
  Questions......Page 326
 13 The global financial environment......Page 327
  13.1 The balance of payments......Page 328
  13.2 The exchange rate......Page 330
  13.3 The growth of global financial flows......Page 339
  13.4 Economic and monetary union in the EU......Page 342
  13.5 International economic policy: managing the global economy......Page 345
  Postscript: is globalisation a ‘good thing’?......Page 348
  Box 13.1 The importance of international financial movements......Page 333
  Box 13.2 Exchange rate fluctuations and the plight of SMEs......Page 335
  Box 13.3 The euro/dollar seesaw......Page 337
  Box 13.4 A worldwide epidemic......Page 346
  Questions......Page 350
  Part end – additional case studies and relevant websites......Page 351
Web appendix......Page 354
Key ideas......Page 358
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