Economics
Summary:
MBA-Level Economics
Economics in the MBA setting is a critical foundation block for understanding the remainder of your core classes. For this reason, economics is oftentimes one of the classes offered in the first term of an MBA program – and therefore why it is positioned as the first chapter in my book. Ironically, the content of an MBA economics course falls more in line with social sciences-esque framework rather than a typical business course, yet it is critical nonetheless.
The economics content is very frequently disseminated via graphs and charts. It is oftentimes very difficult to grasp for those that are not visual learners. For these individuals, it is oftentimes easier to think of a difficult concept in the form of a personal experience rather than in graph form. I oftentimes found myself having more success when I took this approach. For example when trying to understand the concept of a price floor (defined below), it may be more helpful to envision what happens in the existence of a minimum wage as opposed to looking solely at the graph depicting a visual representation of the term.
Regardless of how you determine to study the material, a strong understanding of economic concepts will undoubtedly serve you well in your current job and your overall understanding of current events. I assure you, a strong economic mindset, makes reading the newspaper a much more enlightening and exciting experience. Your new found understanding will enable you to “read between the lines” and understand why politicians and businesses act in the seemingly confusing ways that they do. It will enable you to have more robust conversations with your friends and while at work. If I could recommend only one MBA course to a non-MBA it would be Economics.
In undergraduate studies, you will find both “macro” and “micro” economics course offerings. In the MBA curriculum, economics is not broken down by these categories. Instead, economics is taught from the management point of view, and how different economic factors will incent and result in different behaviors for all actors involved. If a categorization for the MBA course was required, it would fall more closely in-line with an undergraduate micro-economics course. Macro topics (or economics at the country level) are covered more in depth in the International Business Core Class.
Key Terms:
- Supply and Demand
- Arbitrage
- Price Ceiling
- Price Floor
- Post-contractual opportunistic behaviors (PCOB)
- Vertical integration
- Horizontal integration
- Scarcity
- Opportunity cost
- Laffer Curve
- Positive Externality
- Negative Externality
- Indifference curves
- Marginal cost
- Marginal benefits
- Consumer surplus
- Producer surplus
- Monopoly
- Duopoly
- Oligopoly
- Economies of scale
- Economies of scope
- Keyne’s
- Hayak
- Adam Smith
- Variable Cost
- Fixed Cost