Economics | 2020-21

This course addresses key aspects of economics, including microeconomics, macroeconomics, and business economics. It also discusses how managers use economic analysis to make important decisions. Specific topics include Cost-Benefit Analysis; The Demand Curve; Inflation, Unemployment, and Interest Rates; and Strategic Behavior, Price Leadership, and Contribution Margins.

Faculty

Prof. Sebastian Edwards

Prof. Sebastian Edwards

Professor

Sebastian Edwards is the Henry Ford II Professor of International Business Economics at the UCLA Anderson School of Management.

From 1993 until April 1996, he was the Chief Economist for the Latin America and Caribbean Region of the World Bank. He is a research associate of the National Bureau of Economic Research (NBER), a member of the advisory board of Transnational Research Corporation and co-chairman of the Inter American Seminar on Economics (IASE).

He is also past-president of the Latin American and Caribbean Economic Association (LACEA), an international professional association of economists with academic interests in Latin America and the Caribbean region and a member of the Scientific Advisory Council of the Kiel Institute of World Economics, Kiel, Germany. In September 2004, Professor Edwards was appointed to California Governor Arnold Schwarzenegger’s Council of Economic Advisors.

Edwards has been a columnist for the Wall Street Journal, and is the author of more than 200 scientific articles on international economics, macroeconomics and economic development. His articles have appeared in The American Economic ReviewThe Journal of Monetary EconomicsThe Economic JournalOxford Economic PapersThe Journal of Development EconomicsThe Quarterly Journal of Economics, the Journal of Economic Perspectives and others. His work and views are frequently quoted in the media, including by the New York Times, the Financial Times, the Los Angeles Times, the Wall Street Journal and The Economist.

Edwards is an associate editor of The World Economy, the Journal of International Trade and Economic Development, the Journal of International Financial MarketsInstitutions and Money, and Analisis Economico. For almost ten years he was the co-editor of the Journal of Development Economics.

Edwards has been a consultant to a number of multilateral institutions, including the Inter-American Development Bank, the World Bank, the IMF, and the OECD. He has also been a consultant to the United States Agency for International Development and to a number of national and international corporations. He has worked in Argentina, Brazil, Bolivia, Chile, Colombia, Costa Rica, Egypt, Guatemala, Honduras, Indonesia, Korea, Mexico, Morocco, New Zealand, Nicaragua, Tanzania and Venezuela. He has also consulted for a number of international financial institutions and multinational firms.

Sebastian Edwards was born in Santiago, Chile. He was educated at the Catholic University of Chile, and received an M.A. and Ph.D. in economics from the University of Chicago.

Education

Ph.D. Economics, 1981, University of Chicago
M.A. Economics, 1978, University of Chicago
Licenciado Economics, 1975, Universidad Catolica, Chile

Interests

Mercosur, monetary policy, capital markets, Consumer Price Index, currency crises, devaluation, currency, emerging markets, employment, exchange rates, the Federal Reserve, inequality, inflation, Latin America, Mexico, NAFTA, and poverty

Course Learning Objectives:

  • Apply concepts from micro-, macro-, and business economics – including cost/benefits analysis – to managerial decisions such as production, pricing, hiring, competitor-response, marketing, and expansion.
  • Use the concept of the demand curve to inform decisions affecting a product’s costs and revenues.
  • Make managerial decisions based on economic principles and tools such as GDP, PPP, and consumption statistics; inflation, unemployment, and interest rate; public sector debt and deficit; mark-up and price elasticity.
  • Use economic concepts to make managerial decisions about such issues as production, pricing, and hiring.
  • Use cost/benefit analysis to determine the wisdom of a particular managerial decision.
  • Consider macroeconomic complexities such as inflation, interest rates, currency exchange rates, and unemployment rates to evaluate a proposed choice such as global expansion.
  • Analyze a demand curve to identify the number of products that will be sold at several different price points.
  • Analyze a business situation involving incremental revenue to make a valid proposal that solves the issue.
  • Determine the incremental cost of producing one additional item, based on provided data.
  • Select strong economies to consider for market expansion, based on GDP, PPP, and consumption statistics.
  • Evaluate a group of countries as possible market expansion targets, based on inflation, unemployment, and interest rates.
  • Using data on public sector debt and deficits, as well as currency strength, evaluate a group of countries as possible market expansion targets.
  • Calculate mark-up for different countries, based on established standards.
  • Based on data concerning price elasticity, select the optimum loss leader from a group of potential products.
  • Based on data concerning fixed and variable costs, as well as product pricing, determine the contribution margin of a particular product.

Syllabus

Learning Objectives:
  • Use economic concepts to make managerial decisions about such issues as production, pricing, and hiring.
  • Use cost/benefit analysis to determine the wisdom of a particular managerial decision.
  • Consider macroeconomic complexities such as inflation, interest rates, currency exchange rates, and unemployment rates to evaluate a proposed choice such as global expansion.
Module Components:

Video Lectures:

  • Economics as a Decision Tool for Managers
  • Cost-Benefit Analysis
  • Economic Complexities

Readings:

  • Importance of Economics
  • A Brief Note on Cost-Benefit Analysis
  • Classical Theory of Economics
  • The Four schools of Economic Thought

Case Study:

  • Case Study: Good Home, Inc.

Quiz:

  • Economics
Learning Objectives:
  • Analyze a demand curve to identify the number of products that will be sold at several different price points.
  • Analyze a business situation involving incremental revenue to make a valid proposal that solves the issue.
  • Determine the incremental cost of producing one additional item, based on provided data.
Module Components:

Video Lectures:

  • The Demand Curve
  • Economics and Revenues
  • Economics and Costs

Readings:

  • Microeconomics and Macroeconomics
  • Demand and Supply Equilibrium
  • Deriving the Demand Curve
  • Economics – Profit and Revenue

Case Study:

  • Case Study: Good Home, Inc. (Continued – Part 1)

Quiz:

  • Microeconomics
Learning Objectives:
  • Select strong economies to consider for market expansion, based on GDP, PPP, and consumption statistics.
  • Evaluate a group of countries as possible market expansion targets, based on inflation, unemployment, and interest rates.
  • Using data on public sector debt and deficits, as well as currency strength, evaluate a group of countries as possible market expansion targets.
Module Components:

Video Lectures:

  • Macroeconomics – Key Concepts
  • Inflation, Unemployment and Interest Rates
  • Public Deficit, Debt, International Trade and Currencies

Readings:

  • The Macroeconomic Perspective
  • An In-Depth Look at the Economics of Bitcoin

Case Study:

  • Case Study: Good Home, Inc. (Continued – Part 2)

Quiz:

  • Macroeconomics
Learning Objectives:
  • Calculate mark-up for different countries, based on established standards.
  • Based on data concerning price elasticity, select the optimum loss leader from a group of potential products.
  • Based on data concerning fixed and variable costs, as well as product pricing, determine the contribution margin of a particular product.
Module Components:

Video Lectures:

  • Optimal Pricing and Market Segmentation
  • Understanding the concept of Loss Leaders
  • Strategic Behavior, Price Leadership and Contribution Margins

Readings:

  • Applications of Demand and Supply
  • Impact of Supply and Demand on Business

Case Study:

  • Case Study: Good Home, Inc. (Continued – Part 3)

Quiz:

  • Business Economics

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