Required Reading

Bhat, M.S., and Rau, A.V.  Managerial Economics and Financial Analysis, Hyderabad, IND BS Publications, 2008.  ProQuest ebrary. Web. Retrieved  August 18 2014Chapter 1: Introduction to Managerial Economics, pp 1-15.

Townsend, H. Foundations of Business Economics, Market and Prices. London, GBR: Routledge, 1995. ProQuest ebrary. Web. Retrieved August 12, 2014. Chapter 1: The Economic Way of Thinking, pp 3-17 and Chapter 2: Firms, Markets and Industries, pp 21-30.

Optional Reading 

Vasigh, B. , Vasigh, B., and Tacker, T. Introduction to Air Transport Economics: From Theory to Applications. Famhan, GBR: Ashgate Publishing Ltd, 2013. ProQuest ebrary. Web. Retrieved August 12, 2014. Chapter 2: Principles of Economics with Application in Aviation, pp.27-38 and Chapter 3, Supply and Demand: Analysis in the Airline Industry, pp 46-67. 

Thomas, C.R., and Maurice, S.C., Managerial Economics, McGraw Hill (2008) Power Point Presentation available at http://highered.mheducation.com/sites/0073402818/student_view0/chapter1/powerpoint_presentation.html

Milton Friedman discussion of the power of the market in the famous piece on the lesson of the pencil (nobody can make a pencil): http://www.youtube.com/watch?v=R5Gppi-O3a8

Links to Demand, Supply, and Market Equilibrium 

Required Reading

Thomas, C.R., and Maurice, S.C., Managerial Economics, McGraw Hill (2008) Power Point Presentations available at http://highered.mheducation.com/sites/0073402818/student_view0/chapter2/powerpoint_presentation.html

http://highered.mheducation.com/sites/0073402818/student_view0/chapter3/powerpoint_presentation.html

Optional Reading 

The main purpose of studying a market is to be able to predict qualitatively and quantitatively changes in prices resulting from changes in demand and supply conditions.

For each of the following events, assume that either the supply curve or the demand curve (not both) shifted. Explain which curve shifted, if any, and indicate the qualitative direction of the shift, the new market equilibrium, and the new equilibrium price and quantity.

Using some of the concepts you learned from the module, discuss the questions below:

• From 1950 to 1979 the wages paid to fruit pickers increased while the number of fruit pickers employed decreased.
• During the same period the price of radio sets declined, while the number of radio sets purchased increased.
• Housing prices are rising but more houses are sold.
• Australian Airlines reduces its average plane fare by 30 percent in order to attract more customers.