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Seminar Questions

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SEMINAR 1 BUSINESS ECONOMICS & ACCOUNTING
- 1 - © 2015
MASTERS PROGRAMMES
Summary of the questions with some guidelines
1. Can you envisage reasons/scenarios where markets just don’t work or inefficient? Explain those reasons. Try to define markets and market failures. You may think of characteristics of public goods and conditions for market efficiency. Do companies have their internal resources distributed through an internal market of supply and demand for works? Suggest implications for you as future managers.
2. (a) It has been said that we are ‘addicted to oil’. How can you explain this in terms of income and price elasticity of demand? Try to define income and price elasticity, definition of in-/elastic demand, implications for revenue and pricing strategy.
(b) Give some examples of things that could make the demand for oil more elastic. What specific policies could the government or companies take to make demand more elastic?
(c, optional, harder) Which reasons may explain the recent drop in oil prices in 2015?
Suggest some implications for you as future managers.
3. Milton Friedman famously wrote an article entitled “The social responsibility of business is to increase its profits.” After reading the article and related literature, consider the question of whether projects aimed at enhancing social responsibility are undermining the goal(s) of shareholders? Explain your reasons for and against, think of modern changes in the world that enhance or disable Friedman’s statement, suggest implications for managers.
QUESTION 1 A real market economy ensures that greed is good – John Kay 18 January 2012, Financial Times Sixty years of division of the Korean peninsula has created two states with very different standards of living in one country. The Korean example is pathological. The division of Germany resulted in two states, both functional in economic

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