Economics for Business

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This new edition of Economics for Business uses up-to-date case studies to examine the key issues facing the business world today. Looking at everything from the impact of the financial crisis to the operation of individual business, the 7th edition illustrates how economic theory relates to real business issues in a clear, accessible and engaging way designed to help students excel.

Looking for economics in action? Search online for the Sloman Economics News Site, a blog that’s updated several times a week with current affairs and topical stories, all linked to your textbook so you can explore the background to the issues more deeply.

John Sloman was Director of the Economics Network from its foundation in 1999 until 2012, and is now Visiting Fellow at the University of Bristol where the Network is based. John is also Visiting Professor at the University of the West of England, Bristol.

Dean Garratt is Principal Teaching Fellow in the Department of Economics at the University of Warwick.

Jon Guest is a National Teaching Fellow of the Higher Education Academy and a Principal Lecturer in the School of Economics, Finance and Accountancy at Coventry University. Jon is also an Associate of the Economics Network and a Lecturer on economics courses delivered to departments across the UK government.

Elizabeth Jones is a Principal Teaching Fellow and the Dean of Students in the Economics Department at the University of Warwick. Elizabeth is also a Lecturer on economics courses non-economists delivered to departments across the UK government.

About the authors

Custom publishing

Preface

Publisher’s acknowledgements

Part A BUSINESS AND ECONOMICS

1 The business environment and business economics

1.1 The business environment

1.2 The structure of industry

1.3 The determinants of business performance

Box 1.1 A perfect partnership

Box 1.2 The biotechnology industry

Summary

Review questions

2 Economics and the world of business

2.1 What do economists study?

2.2 Business economics: the macroeconomic environment

2.3 Business economics: microeconomic choices

Box 2.1 Looking at macroeconomic data

Box 2.2 What, how and for whom

Box 2.3 The opportunity costs of studying economics

Summary

Review questions

Appendix: Some techniques of economic analysis

Summary to appendix

Review questions to appendix

3 Business organisations

3.1 The nature of firms

3.2 The firm as a legal entity

3.3 The internal organisation of the firm

Box 3.1 Exploiting asymmetric information

Box 3.2 Managers and performance

Box 3.3 The changing nature of business

Summary

Review questions

Part end – additional case studies and relevant websites

Part B BUSINESS AND MARKETS

4 The working of competitive markets

4.1 Business in a competitive market

4.2 Demand

4.3 Supply

4.4 Price and output determination

Box 4.1 UK house prices

Box 4.2 Stock market prices

Box 4.3 Controlling prices

Summary

Review questions

5 Business in a market environment

5.1 Price elasticity of demand

5.2 The importance of price elasticity of demand to business decision making

5.3 Other elasticities

5.4 The time dimension of market adjustment

5.5 Dealing with uncertainty

Box 5.1 The measurement of elasticity

Box 5.2 Elasticity and the incidence of tax

Box 5.3 Adjusting to oil price shocks

Box 5.4 Don’t shoot the speculator

Summary

Review questions

Part end – additional case studies and relevant websites

Part C BACKGROUND TO DEMAND

6 Demand and the consumer

6.1 Marginal utility theory

6.2 Demand under conditions of risk and uncertainty

6.3 The characteristics approach to analysing consumer demand

Box 6.1 Calculating consumer surplus

Box 6.2 The marginal utility revolution: Jevons, Menger, Walras

Box 6.3 Adverse selection in the insurance market

Box 6.4 Rogue traders

Summary

Review questions

7 Demand and the firm

7.1 Estimating demand functions

7.2 Forecasting demand

Box 7.1 The demand for lamb

Summary

Review questions

8 Products, marketing and advertising

8.1 Product differentiation

8.2 Marketing the product

8.3 Advertising

Box 8.1 The battle of the brands

Box 8.2 Advertising and the long run

Summary

Review questions

Part end – additional case studies and relevant websites

Part D BACKGROUND TO SUPPLY

9 Costs of production

9.1 The meaning of costs

9.2 Production in the short run

9.3 Costs in the short run

9.4 Production in the long run

9.5 Costs in the long run

Box 9.1 The fallacy of using historic costs

Box 9.2 How vulnerable are you?

Box 9.3 UK competitiveness: moving to the next stage

Box 9.4 Minimum efficient scale

Box 9.5 Fashion cycles

Summary

Review questions

10 Revenue and profit

10.1 Revenue

10.2 Profit maximisation

Box 10.1 Costs, revenue