Fundamentals of Economics for Business, 2e

David Barrows, John Smithin    

Captus Press and World Scientific, ISBN 978-1-55322-175-3 (2009)
390 pages, 690 g, 7 X 10, $54.00 (US$43.25)

Fundamentals of Economics for Business, 2e is an innovative text designed specifically for students in business education programs. It provides a comprehensive yet accessible introduction to the key economic issues relevant to present or future business decision-makers. Reflecting the requirements of globalization, the content is international in scope and is applicable worldwide. The material is easily adaptable to courses of different lengths and educational objectives, including a one-semester MBA course, economics courses in an undergraduate commerce or business degree, or an executive MBA program.

This second edition adds significant new material on production costs, managerial economics, growth and competitiveness, and includes new case studies with applications to international business.

This is a useful resource for decision-makers, instructors, students and future business managers.

Key Feature

  • Practical Examples End of chapter summaries and problems that challenge and provide useful experience. Problems and applications solutions are available with the instructor’s resources.

Co-published with World Scientific. Distributed outside of Canada by World Scientific

Table of Contents   top


1  Business and Economics

  • Introduction
  • Learning Objectives
  • Microeconomics, Macroeconomics and International Economics
  • Optimal Resource Allocation versus Dynamic Economic Growth?
  • Chapter Summary
  • Problems
  • Case Study Questions
  • Appendix 1.1: Leading Economic Thinkers

2 Demand and Supply: The Basics

  • Introduction
  • Market Price
  • Changes in Market Conditions
  • The Concept of Elasticity
  • Working with Demand Elasticity
  • Working with Supply Elasticity
  • Other Applications of the Concept of Elasticity
  • Chapter Summary
  • Problems
  • Case Study Questions
  • Appendix 2.1: Another Method for Calculating Elasticity

3 The Market Mechanism and the Impact of Regulation and Taxation

  • Introduction
  • Factor Markets
  • Financial and Asset Markets
  • The Impact of a “Price Ceiling”
  • The Impact of a “Price Floor”
  • The Impact of Taxation
  • Subsidies
  • Chapter Summary
  • Problems
  • Appendix 3.1: The Relationship between Yields and Financial Asset Prices: An Example

4 The Costs of Production

  • Introduction
  • Concepts and Definitions
  • A Cost Example
  • Textbook “U-shaped” Cost Curves and Other Configurations for Cost Curves
  • Chapter Summary
  • Problems
  • Case Study Questions
  • Appendix 4.1: More on Costs and Production

5 Two Benchmarks for Business Strategy: Perfect Competition versus Monopoly

  • Introduction
  • The Firm in a Perfectly Competitive Industry
  • The Firm as a Monopolist
  • Chapter Summary
  • Problems
  • Case Study Questions
  • Appendix 5.1: Price Discrimination

6 Alternative Market Structures, Business Strategy, and Public Policy

  • Introduction
  • Monopolistic Competition
  • Oligopoly
  • An Introduction to “Game Theory”
  • Competition Policy
  • Externalities, Public Goods, and Natural Monopolies
  • Schumpeter’s Defense of Monopoly/Imperfect Competition
  • Chapter Summary
  • Problems
  • Case Study Questions
  • Appendix 6.1: Notes on Regulation
  • Appendix 6.2: Theory of the Firm
  • Appendix 6.3: The Baranti Group – Case Study

7 The Global Economy I: The Debate over Free Trade

  • Introduction
  • Differing Degrees of Economic Integration
  • The Case for Free Trade
  • Comparative Advantage and the Gains from Trade
  • Demand and Supply under Free Trade
  • Tariff and Non-Tariff Barriers to Trade
  • The “Compensation Principle” of Welfare Economics as Applied to Free Trade
  • Some Arguments Against Free Trade
  • Chapter Summary
  • Problems
  • Case Study Questions

8 Economic Indicators and the Basic Data of the Macroeconomy

  • Introduction
  • Gross Domestic Product
  • Price Indices and Inflation
  • The Business Cycle, Inflation, and Unemployment
  • Interest Rates
  • The Supply of Money
  • Chapter Summary
  • Problems
  • Case Study Questions
  • Appendix 8.1: The Yield Curve: A Numerical Example

9 The Simple “Keynesian” Model and an Introduction to Fiscal Policy

  • Introduction
  • The Theory of Effective Demand and the Investment Multiplier
  • Criticisms of “Keynesian Economics”
  • The Public Sector
  • International Aspects
  • The Government Budget Deficit and the National Debt
  • Chapter Summary
  • Problems
  • Case Study Questions
  • Appendix 9.1: IS/LM and Aggregate Demand

10 Money and Inflation

  • Introduction
  • The Equation of Exchange
  • Aggregate Demand and Supply
  • Potential Criticisms of the Quantity Theory
  • The Velocity of Circulation and the Demand for Money
  • The Money Multiplier and the Supply of Money
  • The Non-Neutrality of Money in the “Short Run”
  • Chapter Summary
  • Problems
  • Appendix 10.1: Money and Banking

11 Is There a Trade-Off between Inflation and Economic Growth?

  • Introduction
  • The Phillips Curve
  • Adaptive Expectations and “Rational” Expectations
  • Modern Monetary Economics: The “New Consensus” on Macroeconomic Policy
  • Chapter Summary
  • Problems
  • Appendix 11.1: Interest Rates and Aggregate Demand Growth

12 The Global Economy II: The Balance of Payments and Exchange Rates

  • Introduction
  • The Balance of Payments and International Flows of Funds
  • Exchange Rates
  • Alternative Exchange Rate Regimes
  • Exchange Rate Determination: Flexible Exchange Rates
  • Exchange Rate Determination: Fixed Exchange Rates
  • “Classical” Adjustment Mechanisms in the Global Economy
  • Chapter Summary
  • Problems
  • Case Study Questions
  • Appendix 12.1: The Mundell-Fleming Model

13 The Global Economy III: Some Topics in International Finance

  • Introduction
  • Covered Interest Parity
  • Uncovered Interest Parity, Purchasing Power Parity, and Real Interest Parity
  • Some Problems with Interest Parity and Purchasing Power Parity Assumptions
  • Fixed Exchange Rates and the Domestic Rate of Interest
  • Chapter Summary
  • Problems

14 Economic Growth and Competitiveness: A Macro-Micro Synthesis

  • Introduction
  • Economic Growth
  • Growth Models
  • Growth and Business Cycles
  • International Competitiveness
  • The Porter Model
  • Stages of National Competitive Development
  • Fundamentals of International Competitiveness
  • The Main Social Institutions of Capitalism
  • Some Final Remarks
  • Chapter Summary
  • Problems
  • Case Study Questions

The Comeback of Caterpillar Case


Instructor Resources   top

Comprehensive teaching aids for instructors are available including:

  • Answer Key
  • Chapter Outlines
  • Overheads (JPGs)
  • PowerPoints slides
  • Sessional Planner
  • Test Bank

Visit the Instructor's Resources website

Related Resources   top

About the Author   top

David Barrows is Associate Director of the Public Administration Program at the Schulich School of Business, York University, Toronto, and a former Director of Industry and Trade Policy at the Ministry of Industry, Government of Ontario.

John Smithin is Professor of Economics in the Department of Economics at the Schulich School of Business, York University, Toronto.