Introduction to Business EconomicsLaajuus (3 ECTS)

Objective

The student understands basic concepts of economics and a market process as a means to solve the allocation problem of scarce resources and utility maximizing set of outputs. The student understands how firms create and use market power. The student can identify the most commonly used market structures. The student understands what market structures imply about market prices, quantities of exchanged goods and services, and profit opportunities of firms operating in those markets. The student understands the basic workings of incentive structures inside and between firms, as they show up in situations of asymmetric information.

Content

- Demand and supply on firm level and industry level
- Elasticities
- Concepts of costs
- Perfect competition, monopolistic competition, oligopoly, monopoly
- Incentive differences in situations of separated ownership and management, and in other contracts applied in a situation of asymmetric information
- Basic types and functioning of English and Dutch, sealed bid and open bid auctions. Difference of common value and private value auctions.
- Basic idea of game theory and prisoner’s dilemma.

Qualifications

No prerequisities.