Economics for Leaders is designed to familiarise Master of Business Administration students with economic concepts and principles which are useful in understanding the general economic environment within which businesses and other organisations operate. It provides students with a solid foundation of economics knowledge for a senior management career.

Microeconomics examines how consumers and firms make decisions and how they interact with each other in markets. Topics covered include supply and demand, consumer and firm behaviour, price determination and the operation of markets, situations of market failure, and the impact and role of government on the economy.

Macroeconomics examines the entire economy and its wellbeing. Macroeconomics looks at the effect of factors such as inflation, exchange rates, interest rates and trade on the well being and stability of the economy.

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

1. explain introductory, canonical models of consumer and producer behaviour and of macroeconomy
2. demonstrate a basic understanding of the operation of a modern economy
3. evaluate the effects of government interventions in individual markets and in the macroeconomy
4. apply evidence-based management techniques with an economics perspective

Research-Led Teaching

This course incorporates seminal and contemporary research published in academic journals and working paper series, from which students will be exposed to economic data, statistical methodology, and research practices that can be applied to their own work throughout the semester and in their academic career.

Additional Course Costs

There are no additional class costs,

Required Resources

Required resources for this class, mainly academic articles and other readings, will be posted on Wattle.

Recommended Resources

A good online resource for general economics, both micro- and macro-, can be found at CORE, The Economy 1.0, available at http://www.core-econ.org. Students may find this a useful supplement.

Staff Feedback

Students will be given feedback in the following forms in this course:

• written comments
• verbal comments
• feedback to whole class, groups, individuals, focus group etc

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.

Class Schedule

Week/Session	Summary of Activities	Assessment
1	Firms, markets and economic agents – Microeconomics - The economic model: rational maximizing, incentives and markets	The field of economics rests on a theory of human behaviour with very specific simplifying assumptions that yield a core set of inferences about human actions in the face of resource constraints. This week’s topic examines those assumptions (particularly that economic agents are rational, maximizing, selfish and atomistic, and that resources are scarce) and the corresponding inferences (mainly that economic agents base their plans and actions primarily on maximizing personal gain while responding to incentives embedded in the economic environment. The strengths and limitations of this approach as applied to real-world market settings will be prime focus of analysis.
2	Microeconomics: Consumers and their behaviour – Demand	From this economic theory core, a model of the efficacy of markets and prices in allocating scarce resources across a society has been developed. This model also rests on distinct core simplifying assumptions (e.g. perfect competition – to be defined and discussed further in week 4). From this, ‘two blades of the scissors’ (to use 19th century economist Alfred Marshall’s words) were developed as an analytical framework: the well-known ‘supply and demand’ motif. This week’s topic focuses on the demand side, i.e. the behaviour of economic agents collectively when they are buying desired goods and services in markets. The theoretical construct of the Demand Curve and its various aspects (such as ‘price elasticity’) will be described and applied in some real-world business and economic settings, past and present.
3	Microeconomics: Producers and their behaviour -- Supply	The other blade of the scissors – Supply – takes up this week’s discussion, as does the corresponding construct of the Supply Curve. Supply refers to producers collectively supplying goods to the market for sale to consumers. As in the prior week, the Supply Curve will be applied to real-world settings to see how well it has performed in analyzing and predicting actual outcomes. The complication of ‘form’ of producers will also be considered, especially the reality that many, but not all suppliers, assume a company or firm form, an issue which is not entirely straightforward in economic theory and practice.
4	Microeconomics: Competition (or lack thereof) in action -- Market structure	If all the simplifying assumptions of the core theory and the market model hold, markets and prices are posited to be the most ‘efficient’ way to allocate scarce resources in a given society at a given time. One of these assumptions is ‘perfect competition.’ However, this assumption almost never holds in the real world and significant deviations from it, e.g. ‘monopoly’, cause economic inefficiencies that must either be accepted, or addressed outside the market in some way (such as regulation). This week the inefficiencies presented by differing levels of ‘imperfect competition’ (referred to under the rubric of ‘market structure’) will be defined and discussed, with real-world examples for illustration and consideration. Online problem set #1 (15% of total marks) – DUE 19-3-20
5	When markets fail – Public Economics - Externalities, public goods, market failures and government intervention	When one or more of the assumptions underlying the market model are violated, inefficiencies result as already noted in week 4). Economists refer to these occurrences as ‘market failures’ one type of which -- ‘imperfect competition’ – has already been alluded to. There are other types however, externalities (positive and negative) and public or quasi-public goods being the two main ones. The meanings and implications of these concepts, and various possible solutions (especially government interventions), with all their pros and cons, will be discussed.
6	Public economics: Behavioural ‘anomalies’ and market imperfections	The nature of the economic agent and the conditions s/he operates under is highly simplified in economic theory. Such simplification is needed to create a tractable and useful theory but real-world deviations from the ‘perfect’ market model can cause limits to the applicability of the model, or even suggest the need for alternative theories and constructs. This week considers some broader real world ‘imperfections’ (when considered from a pure theory perspective. ‘Behavioral Economics (BE)’ (which can be defined as the theoretical implications of economic agents being less rational, selfish, atomistic and/or maximizing than theory suggests) will be considered, as will some other important imperfections outside BE, especially ‘information asymmetries.’
7	The whole economy -- Macroeconomics - The whole is not necessarily the sum of the parts: Macro’s raison d’etre and basic theory	For about fifty years (1880-1930), there was only one economic theory (in the English speaking world anyway) that was applied to all economic behaviour, ‘Price Theory’, whose core prediction was that markets would always adjust to an ‘optimal’ equilibrium of its own accord. However the onset of the Great Crash of 1929 and the following decade of the Great Depression in the 1930s shook this paradigm to the core. The ‘neoclassical’ theory prediction of economic self-correction at the level of the entire economy failed to happen year upon year as the thirties unfolded and economic conditions got worse not better. Enter John Maynard Keynes and the birth of the separate field of ‘Macroeconomics’, splitting the discipline of economics into two (uneasily fitting) halves ‘microeconomics’ being the name for old ‘Price Theory’. This topic discusses the genesis of this split, and some of the current models and theories that are used to describe and model the behaviour of the economy as whole (i.e. the ‘macroeconomic side’), when the economic whole is not simply equal to the sum of the economic parts, a situation that prevails quite often.
8	Macroeconomics: economic structure - industries, innovation, productivity and growth	Macroeconomics is a short-run affair for the most part, focusing on business cycles (recessions and expansions) that are posited to be temporary fluctuations around a long-run economic growth trend and pattern. This week the dynamics and mechanics of that long-run trajectory will be delved into more deeply, especially the overall structure of the economy (i.e. the balance of economic activity across different industries), innovation, and productivity. These concepts will be defined, measured, discussed and applied in real-world settings. Online problem set #2 (15% of total marks) – DUE 29-4-20
9	Macroeconomics: Money, banking and the financial sector	The ‘macroeconomy’ – short-run and long-run – is often referred to as the ‘real economy’, i.e. the production and consumption of goods and services. However there is a ‘money economy’ that sits on top of the real economy which makes the whole enterprise more efficient – in most cases. The workings of money, banking and the financial sector, will be considered here, along with the way in which the financial sector both improves economic performance and sometimes undermines it.
10	Economic theory applied to business problems: business economics - Responding to competitors: the economics of strategy	‘Business economics’ refers to the application of economic theory specifically to the unique problems of producers and suppliers in real-world settings. One key part of this discipline is the economics of strategy, the focus of this week’s topic. Strategy through an economic lens is seen as a ‘game’ of ‘incentives’ and where agents respond to and seek to manipulate the behaviour of competitors and other agents encountered in the conduct of a business. Some of the core models and their strengths and limitations will be presented and analyzed.
11	Business economics: Organizing a firm: institutions, the Strategy-Structure debate, and economies of scale/scope and synergies	The ‘mystery of the firm’ refers to the odd fact that the ‘pure’ market model considered in the first four weeks of the class does not actually predict, nor understand, the reality of the firm. If agents are totally rational, maximizing, selfish and atomistic, then there is no clear reason for them to get together (outside of one-off transactions, perhaps repeated over time, or not) to create action-constraining and costly ‘institutions’ such as firms. This mystery is unraveled (or not) this week and related issues, such as ‘synergies’ and ‘economies of scale and scope’ are considered as well.
12	Business economics: Ethics, values and the future of economic theory	The discipline of economics is sometimes said to be ‘value-free’ or ‘value-neutral’, i.e. focused solely on getting the most out of scarce resources. Social values (e.g. social justice) are said to be outside the economic model and left to others (policymakers, politicians and philosophers) to work out. The veracity of this assumption t is considered this week and jumping off from this, some possible future directions for economic theory, the economy, and business more generally, will be considered. Essay (40% of total marks) – DUE 1-6-20

Tutorial Registration

See Wattle for online registration process details.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Online problem set #1 (15% of total marks)	15 %	19/03/2020	27/03/2020	1,2,3,4
Online problem set #2 (15% of total marks)	15 %	28/04/2020	08/05/2020	1,2,3,4
Essay (40% of total marks)	40 %	01/06/2020	12/06/2020	1,2,3,4
Final Examination (30% of total marks)	30 %	20/06/2020	26/06/2020	1,2,3,4

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details

Policies

ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:

• Student Assessment (Coursework) Policy and Procedure
• Special Assessment Consideration Policy and General Information 
• Student Surveys and Evaluations
• Deferred Examinations
• Student Complaint Resolution Policy and Procedure

Assessment Requirements

The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website. In rare cases where online submission using Turnitin software is not technically possible; or where not using Turnitin software has been justified by the Course Convener and approved by the Associate Dean (Education) on the basis of the teaching model being employed; students shall submit assessment online via ‘Wattle’ outside of Turnitin, or failing that in hard copy, or through a combination of submission methods as approved by the Associate Dean (Education). The submission method is detailed below.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.

Participation

This is an on-campus course. Attendance at all teaching events, while not compulsory, is expected in line with “Code of Practice for Teaching and Learning”, clause 2 paragraph (b). In addition, the lecture contains a discussion-based, practice-oriented component and overall discussion is encouraged at all point.

Examination(s)

There will be a final examination, administered by the exams office, of 120 minutes with 15 minutes reading time. 30%, compulsory and non-redeemable.

Assessment Task 1

Online problem set #1 (15% of total marks)

There will be two online problem sets during the course of the semester. Each one will be worth 15% of the total course grade (adding up to a total of 30% of the total across the two assignments). These will be open-book but must be completed within an hour once started and must be taken within a set window of approximately 48 hours. Further details will be posted on Wattle before the beginning of the semester. The first assignment will be available between 17 March 2020 and the close of the due date of 19 March 2019 (subject to slight adjustments in finalization during the semester). 

Assessment Task 2

Online problem set #2 (15% of total marks)

There will be two online problem sets during the course of the semester. Each one will be worth 15% of the total course grade (adding up to a total of 30% of the total across the two assignments). These will be open-book but must be completed within an hour once started and must be taken within a set window of approximately 48 hours. Further details will be posted on Wattle. Further details will be posted on Wattle before the beginning of the semester. The second assignment will be available between 28 April 2020 and the close of the due date of 29 April 2020 (subject to slight adjustments in finalization during the semester). 

Assessment Task 3

Essay (40% of total marks)

There is one major essay to be turned in over the course of the semester which will require consideration of the major themes covered in the class. Essay marking will reflect the student’s understanding of the material, effort, exposition, and creativity. Further details on the essay topic and assessment criteria will be posted on Wattle before the beginning of the semester. A sample exam paper will also be made available before the end of the semester and the beginning of the final exam paper. Essays are to be no longer than 1500 words (including footnotes, excluding reference list). For legibility, please follow these guidelines: double-spaced, no less than 2 -cm margins, and 12 point font (Arial, Helvetica, and Times New Roman only). References are to be listed on a separate page and should follow standard academic style (e.g. Harvard, Chicago, MLA, APA) and are to be consistent throughout the list, which is to be located at the end of the essay.  Essays are to be saved as a Word document (DOC/DOCX), another text -editable format (RTF, TXT), or PDF and uploaded onto the Wattle course webpage as a TurnItIn assignment. The ANU is using TurnItIn to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. More information about TurnItIn will be provided in class and are available at: http://online.anu.edu.au/turnitin. No submission of assessment tasks without an extension after the due date will be permitted. If an essay is not submitted by the due date, a mark of 0 will be awarded. Students are responsible for ensuring that the appropriate essay is correctly uploaded. This is not a collaborative activity—students may discuss material in groups, but each student must individually write his/her own essays, which will be checked for originality. Potential violations as identified by the instructor or TurnItIn will be subject to university policies on academic honesty and plagiarism; see the above section on Policies.

Assessment Task 4

Final Examination (30% of total marks)

Final Examination: 120 minutes with 15 minutes reading time. Worth 30% of course mark. This exam is compulsory and non-redeemable. The format of the exam has not yet been finalized but will likely consist of short and answer questions. The questions will vary in complexity ranging from basic questions up through questions of increasing complexity and requiring creativity and higher analytic and communication skills. Further details will be posted on Wattle before the beginning of the semester.

Academic Integrity

Academic integrity is a core part of the ANU culture as a community of scholars. At its heart, academic integrity is about behaving ethically, committing to honest and responsible scholarly practice and upholding these values with respect and fairness.

The ANU commits to assisting all members of our community to understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to be familiar with the academic integrity principle and Academic Misconduct Rule, uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with.

The Academic Misconduct Rule is in place to promote academic integrity and manage academic misconduct. Very minor breaches of the academic integrity principle may result in a reduction of marks of up to 10% of the total marks available for the assessment. The ANU offers a number of online and in person services to assist students with their assignments, examinations, and other learning activities. Visit the Academic Skills website for more information about academic integrity, your responsibilities and for assistance with your assignments, writing skills and study.

Online Submission

You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. Unless an exemption has been approved by the Associate Dean (Education) submission must be through Turnitin.

Hardcopy Submission

For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.

Late Submission

Individual assessment tasks may or may not allow for late submission. Policy regarding late submission is detailed below:

• Late submission not permitted. If submission of assessment tasks without an extension after the due date is not permitted, a mark of 0 will be awarded.

Referencing Requirements

Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. Extensions may be granted for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

Distribution of grades policy

Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.

Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.

Support for students

The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).

• ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
• ANU Diversity and inclusion for students with a disability or ongoing or chronic illness
• ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
• ANU Academic Skills and Learning Centre supports you make your own decisions about how you learn and manage your workload.
• ANU Counselling Centre promotes, supports and enhances mental health and wellbeing within the University student community.
• ANUSA supports and represents undergraduate and ANU College students
• PARSA supports and represents postgraduate and research students