| Syllabus School of Business ECO/561 Version 7 Economics | Copyright © 2012, 2011, 2010, 2009, 2008 by University of Phoenix. All rights reserved. Course Description

This course applies economic concepts to make management decisions. Students employ the concepts of scarce resources and opportunity costs to perform economic analysis. Other topics include supply and demand, profit maximization, market structure, macroeconomic measurement, money, trade, and foreign exchange. Policies

Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents:

University policies: You must be logged into the student website to view this document.
Instructor policies: This document is posted in the Course Materials forum.

University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality.

The discussion question points are now combined with the participation points for each week. You, as the instructor, may create a separate line item for discussion question points if you choose. Please note that some assignment points may have changed.

Course Materials Ball, L. M. (2009). Money, banking, and financial markets. New York, NY: Worth Publishers.

McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics: Principles, problems, and policies (18th ed.). Boston, MA: McGraw-Hill Irwin.

Pugel, T. A. (2009). International economics (14th ed.). Boston, MA: McGraw-Hill Irwin.

All electronic materials are available on the student website.

Week One: Increasing Revenue | | Details | Due | Points | Objectives | 1.1 Choose methods to increase revenue in an organization. 1.2 Explain the market equilibrating process. | | | Reading | Read Ch. 1 of Economics. | | | Reading | Read Ch. 2 of Economics. | | | Reading | Read Ch. 3 of Economics. | | | Reading | Read Ch. 6 of Economics. | | | Participation | Participate in class discussion. | 3/14 | 3 | Audio Course Overview Podcast | Listen to the Course Overview podcast. | | | Audio Week One Podcast | Listen to the Week One podcast. | | | Video Price Elasticity of Demand | Watch the Price Elasticity of Demand video. | | | Video Calculating Price Elasticity of Demand | Watch the Calculating Price Elasticity of Demand video. | | | Video Market Equilibration Process | Watch the Market Equilibration Process video. | | | Video Law of Diminishing Marginal Returns | Watch the Law of Diminishing Marginal Returns video. | | | Nongraded Activities and PreparationPricing Strategy Web Quest | * Your company wants to increase revenue and has asked you to work on a project to determine whether the demand for a product is elastic or inelastic. Search the Internet and identify one product sold by an organization. Identify whether the product is price elastic or inelastic. Recommend a pricing strategy to increase revenue. Justify your strategy and share your thoughts. Consider which factors make it price elastic or inelastic. | | | Nongraded Activities and Preparation Demand Determinants Study | * As a manager, you want to discover factors that can disrupt equilibrium in a market. You also need to determine what an organization can do to help restore equilibrium. Demand determinants are always changing and evolving. A manager can identify factors relevant to a particular good or service and understand what to do when those factors change. This understanding can help managers make better business decisions. Select a firm included in the S&P 500 stock index. Describe the good or service your chosen firm sells. List three demand determinants for that good or service. What has happened to those demand determinants over the past three years? How should the firm react to those changes in the demand determinants to maintain sales volume? | | | Individual QUIZ: Week One Knowledge Check | Complete the QUIZ: Week One Knowledge Check located on your student website. The results are NOT automatically posted to the assignments tab so please take a screen shot of results and post it in the assignments tab | 3/14 | 2 |

Week Two: Cost Concepts | | Details | Due | Points | Objectives | 1 2.3 Identify production level to maximize profits. 2.4 Explain how to balance fixed and variable costs. 2.5 Apply economic cost concepts in making business decisions. | | | Reading | Read Ch. 8 of Economics. | | | Reading | Read Ch. 9 of Economics. | | | Reading | Read Ch. 12 of Economics. | | | Reading | Read Ch. 13 of Economics. | | | Reading | Read University of Phoenix Material: Opportunity Cost located on your student website. | | | Reading | Read University of Phoenix Material: Guillermo Furniture Scenario located on your student website. | | | Participation | Participate in class discussion. | 3/21 | 3 | Audio Week Two Podcast | Listen to the Week Two podcast. | | | Video Total Revenue and Total Cost Curves | Watch the Total Revenue and Total Cost Curves video. | | | Video Sunk Cost | Watch the Sunk Cost video. | | | Video Production Possibilities | Watch the Production Possibilities video. | | | Video Opportunity Cost | Watch the Opportunity Cost video. | | | Simulation Cost and Revenue Curves Simulation | Complete the Economics for Managerial Decision Making: Cost and Revenue Curves simulation located on your student website.How might you apply the principles presented in the simulation more effectively in your future business decisions? How do these decisions relate to your business when you are dealing with different states’ cost structures? | | | Nongraded Activities and Preparation Incremental Costs Scenario | Complete the Incremental Costs Scenario activity located on your student website. * Choose one of the following decisions for the Incremental Costs * Scenario and evaluate the decision based on incremental profitability:
Decline Big Box’s orderComplete Big Box’s orderOutsource Big Box’s order | | | Nongraded Activities and PreparationFixed and Variable Costs Chart | * Organizations typically have high or low fixed costs. It is important to understand the difference between the two types of organizations and how their business decisions differ. Choose two publicly held organizations. One organization must have high fixed costs and low variable costs, and the other organization must have low fixed costs and high variable costs. Companies with high fixed costs include manufacturing companies, whereas service companies might have low fixed costs. Chart the relationship between total cost and the number of units for each organization. Plot two lines on the graph: one for the organization that has high fixed costs and low variable costs, and one for the organization that has low fixed costs and high variable costs. | | | Individual QUIZ: Week Two Knowledge Check | Complete the QUIZ: Week Two Knowledge Check located on your student website. The results are NOT automatically posted to the assignments tab so please take a screen shot of results and post it in the assignments tab | 3/21 | 2 | Individual Market Equilibration Process Paper | Understanding how market equilibrium is maintained is essential for business managers. As a manager, it is important to understand how economic principles, and specifically supply and demand, are a part of your everyday business decisions. For this assignment, 1.Relate the concepts of the market equilibrating process in the Weeks One and Two readings and learning activities to a prior real-world experience occurring in a free market. The experience does not necessarily have to be work related.2.Explain the market equilibrating process in relation to your experience. Include academic research to support your ideas. Include the following components in your explanation: Law of demand and the determinants of demandLaw of supply and the determinants of supplyEfficient markets theorySurplus and shortage * Use University of Phoenix Material: Appendix A to create graphs illustrating the equilibrating process in relation to the shift in supply and demand. YOU MUST USE AN EXAMPLE IN THE PAPER WHICH WILL DEMONSTRATE A SHIFT IN 1 OR BOTH OF THE CURVES, WHICH YOU SHOW AS A GRAPHDeliver the content as a 1000-1250 word paper. The graphs and paper must be a TOTAL of one attachment OR THERE WILL BE A 25% POINT DEDUCTIONFormat your citations and references consistent with APA guidelines. Because this assignment is a personal reflection, use first-person pronouns when applicable. | 3/21 | 10 | Learning Team Learning Team Reflection | Discuss this week’s objectives with your team. Your discussion should include the topics you feel comfortable with, any topics you struggled with, and how the weekly topics relate to application in your field.Prepare a 1- to 3-page paper detailing the findings of your discussion | 3/21 | 1 | Learning Team Charter | See comments and guidelines in the course policies | 3/21 | 1 |
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Week Three: Market Structure | | Details | Due | Points | Objectives | 2 3.6 Determine pricing strategy to meet organizational goals. 3.7 Determine ways to create nonprice barriers to entry based on market structure. 3.8 Determine ways to increase product differentiation based on market structure. 3.9 Determine ways to reduce costs for an organization. | | | Reading | Read Ch. 10 of Economics. | | | Reading | Read Ch. 11 of Economics. | | | Reading | Read Ch. 11W of Economics. | | | Reading | Read University of Phoenix Material: Larson Inc. Scenario located on your student website. | | | Participation | Participate in class discussion. | 3/28 | 3 | Audio Week Three Podcast | Listen to the Week Three podcast. | | | Video Market Structure | Watch the Market Structure video. | | | Video Prisoner’s Dilemma | Watch the Prisoner’s Dilemma video. | | | Simulation Market Structures Simulation | Complete the Economics for Managerial Decision Making: Market Structures simulation. Share your thoughts. How did Quasar change its strategy based on market structure? | | | Nongraded Activities and PreparationCurrent Values and Ethics Article | When using nonprice barriers, you might encounter ethically challenging situations. How can an organization maintain market power and align with current values, legal requirements, and ethical standards? Locate a recent news, journal, popular press, reputable blog, or scholarly article pertaining to this topic and describe the ethical dilemma the organization faces. Reflect on how ethics and current values affect current business decisions. | | | Nongraded Activities and Preparation Utilizing Change | Businesses often encounter unforeseen changes in their revenue or cost structure. For example, because of innovations, computer processors have significantly decreased in price over the past several years. Another example is a company that reduces cost by finding ways to move its own supply line. Select a product and choose a change in the environment that would affect supply, such as technology. Create a chart illustrating the relationship between the change in the environment and the supply of the product. Provide an explanation to support your chart. Respond to your fellow classmates. What information should they also consider? | | | Individual QUIZ: Week Three Knowledge Check | Complete the QUIZ: Week Three Knowledge Check located on your student website. The results are NOT automatically posted to the assignments tab so please take a screen shot of results and post it in the assignments tab | 3/28 | 2 | Learning Team Learning Team Reflection | Discuss this week’s objectives with your team. Your discussion should include the topics you feel comfortable with, any topics you struggled with, and how the weekly topics relate to application in your field.Prepare a 1- to 3-page paper detailing the findings of your discussion | 3/28 | 2 |
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Week Four: Macroeconomic Conditions | | Details | Due | Points | Objectives | 3 4.10 Determine the economy’s stage in the business cycle. 4.11 Evaluate current macroeconomic condition based on key indicators. | | | Reading | Read Ch. 24 of Economics. | | | Reading | Read Ch. 26 of Economics. | | | Reading | Read Ch. 28 of Economics. | | | Reading | Read Ch. 29 of Economics. | | | Reading | Read Ch. 30 of Economics. | | | Reading | Read University of Phoenix Material: Will Bury’s Price Elasticity Scenario located on your student website. | | | Reading | Read University of Phoenix Material: Thomas Money Service Inc. Scenario located on your student website. | | | Participation | Participate in class discussion. | 4/4 | 3 | Audio Week Four Podcast | Listen to the Week Four podcast | | | Video Locating Gross Domestic Product by Industry | Watch the Locating Gross Domestic Product by Industry video. | | | Video Locating Gross Domestic Product by Country | Watch the Locating Gross Domestic Product by Country video. | | | Nongraded Activities and PreparationBusiness Cycle Article Search | * As a business person, it is important to be aware of the current state of the economy. Watching or reading the news can help keep you informed. Locate an article written within the last week from the popular press or reputable blog that discusses the economy’s current stage in the business cycle. Summarize the main ideas of the article. | | | Nongraded Activities and PreparationBusiness Cycle Graph | It is important to understand how your industry reacts to a good economy versus a bad economy. Create a graph that compares the past 5 years of the business cycle (GDP) with the past 5 years of your industry’s output or an industry with which you are familiar. Refer to the International Monetary Fund (http://www.imf.org/) and BEA (http://www.bea.gov/) websites. Summarize the main ideas of your graph. | | | Individual QUIZ: Week Four Knowledge Check | Complete the QUIZ: Week Four Knowledge Check located on your student website. The results are NOT automatically posted to the assignments tab so please take a screen shot of results and post it in the assignments tab | 4/4 | 2 | Individual Business Proposal | This week, your paper requires you to apply economic principles presented in Weeks One through Three. Your assignment will be reviewed by your peers and by your facilitator.New Good or Service Business ProposalSelect a new good or service for an existing business or a business that you want to develop. Write a 1,050- to 1,400-word business proposal for your chosen good or service. Include assumptions about the elasticity of demand and the market structure for the good or service. You need to create hypothetical data or collect real data to determine fixed and variable costs and the optimum output level. THIS IS AN ECONOMICS course; the entire focus of your proposal must be economic. If its marketing focused like most business proposals you will be disappointed in your grade. * Answer, number[#1-#7] and include rationale for the following questions. Make sure to use section headings for each answer: * How will you increase revenue? As this is an economics course, talk specifically about whether to RAISE price or LOWER price based on your assessment of its elasticity of demand. DON’T discuss increased advertising, coupons, or loyalty programs, etc. What causes the elasticity to be what you characterize it as; there are 4-5 factors which influence the degree of elasticity, to talk about * How will you determine the profit-maximizing quantity? Hint: think law of diminishing returns and economies of scale * How could you use the concepts of marginal cost and marginal revenue to maximize profit? What information do you need to determine this? Without this information, how would you make a decision? * What is your suggested mix of pricing and non-pricing strategies? What specifically do you suggest in terms of pric and non-price tactics? Explain your answer. * Can you create or increase barriers to entry? If so, how? * How will you increase product differentiation? * Are there other ways to minimize costs for the product?Format your business proposal consistent with APA guidelines. * | 4/4 | 15 | Learning Team Learning Team Reflection | Discuss this week’s objectives with your team. Your discussion should include the topics you feel comfortable with, any topics you struggled with, and how the weekly topics relate to application in your field.Prepare a 1- to 3-page paper detailing the findings of your discussion | 4/4 | 2 |
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Week Five: Credit Markets and Globalization | | Details | Due | Points | Objectives | 4 5.12 Project the effect of credit markets on the economy. 5.13 Project the effect of global economic conditions regarding trade and specialization business decisions. | | | Reading | Read Ch. 27 of Economics. | | | Reading | Read Ch. 31 of Economics. | | | Reading | Read Ch. 32 of Economics. | | | Reading | Read Ch. 33 of Economics. | | | Reading | Read Ch. 17 of International Economics. | | | Reading | Read Ch. 18 of International Economics. | | | Reading | Read Ch. 19 of International Economics. | | | Reading | Read Ch. 18 of Money, Banking, and Financial Markets. | | | Participation | Participate in class discussion. | 4/11 | 3 | Audio Week Five Podcast | Listen to the Week Five podcast. | | | Video Components of Interest Rates | Watch the Components of Interest Rates video. | | | Nongraded Activities and PreparationCurrent Credit Market | * Varying situations in the credit market greatly affect an organization’s financial decision making. All organizations use the credit market in some way. For example, many firms look at the yield curve as a predictor of the business cycle. Other important aspects of the credit market include interest rates, bonds, and the cost of capital. As a business manager, you must analyze, review, and understand the current credit market to make sound financial decisions. Locate an article about the current credit market. Create a chart or graph depicting the key points of the article. | | | Nongraded Activities and PreparationGlobal Economic Conditions Analysis | * All organizations are affected by international markets. Whether an organization is considered an international or domestic organization, international markets affect the way an organization makes business decisions. For example, an organization might only provide domestic services, but the organization might use products or components from international companies. Perhaps an organization’s output is domestic, but its input is international. In this case, the international exchange rate affects the domestic product. Understanding the global economy is important for all types of organizations. * * Select a country other than the country in which you currently reside that is part of a trade bloc and research the EIU Country Data or Countrywatch located in the University Library. Based on absolute advantage and comparative advantage, explain 3 to 5 effects of global economic conditions on the choices available to that trading bloc. Include the current exchange rate of the country with other members of the trade bloc. You may want to consider the value of examining the effects of global economic conditions using data from the entire trading bloc instead of data from only one country. | | | Individual QUIZ: Week Five Knowledge Check | Complete the QUIZ: Week Five Knowledge Check located on your student website. The results are NOT automatically posted to the assignments tab so please take a screen shot of results and post it in the assignments tab | 4/11 | 2 | Individual Collaborative Peer Review | Resource: University of Phoenix Material: Business Proposal Feedback Checklist located on your student website Choose two business proposals from members of your Learning Team. Provide feedback to your peers on the proposals using the Business Proposal Feedback Checklist. Both checklists must be combined into a TOTAL of one attachment. Include detailed, substantive comments. Post in the LT forum so peers can see your feedback to them AND post in your Ind. Assignments to earn your peer review grade; both checksheets must be put into one total attachmentSubmit the completed checklists with comments to the corresponding students AND to the assignments tab. Your comments are evaluated based on how well they correspond with the economic principles presented in Weeks One through Three. | 4/11 | 5 | Learning Team Learning Team Reflection | Discuss this week’s objectives with your team. Your discussion should include the topics you feel comfortable with, any topics you struggled with, and how the weekly topics relate to application in your field.Prepare a 1- to 3-page paper detailing the findings of your discussion | 4/11 | 2 |
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Week Six: Improving Business Decisions | | Details | Due | Points | Objectives | 5 6.14 Apply economic concepts in making business decisions. | | | Reading | Read Ch. 25 of Economics. | | | Reading | Read University of Phoenix Material: Big Drive Auto Scenario located on your student website. | | | Participation | Participate in class discussion. | 4/18 | 3 | Audio Week Six Podcast | Listen to the Week Six podcast. | | | Nongraded Activities and Preparation Big Drive Auto Scenario | Resources: Big Drive Auto Scenario * * This activity helps you apply course concepts using a real-world scenario. Read the Big Drive Auto Scenario and identify 3 to 5 key business management decisions that can improve the revenue of Big Drive Auto. Include key topics from the course that support these decisions. Use common business terms or language when describing your decisions, and put the business decisions in a real-world context. If you had to provide a recommendation for implementing these business decisions, what would it be? | | | Nongraded Activities and Preparation Kudler Fine Foods Business Management Decisions | Resources: Kudler Fine Foods Virtual OrganizationMany business decisions are not easily determined. As a manager, you might have to investigate and sort through numerous pieces of information before making an educated decision. For example, as a consultant, you might be pulled into a project and given access to a great deal of information about a company. It is the consultant’s responsibility to sort through the information and find the most relevant facts to make recommendations. This activity is an opportunity to practice this real-world management skill. Visit the Kudler Fine Foods Virtual Organization. Identify 3 to 5 key business management decisions that can improve the revenue of Kudler Fine Foods. Create a list of key topics from the course that support these decisions and describe how you would implement these business decisions. Share your ideas. You might want to consider the anticipated outcome if Kudler Fine Foods implements the recommendations. | | | Individual QUIZ: Week Six Knowledge Check | Complete the QUIZ: Week Six Knowledge Check located on your student website. The results are NOT automatically posted to the assignments tab so please take a screen shot of results and post it in the assignments tab | 4/18 | 2 | Individual Final Examination | Resources: Economics: Principles, Problems, and Policies and International EconomicsComplete the Final Examination. You have one attempt for the exam, which is timed and must be completed in 3 hours. Results are sent to your facilitator. The results are NOT automatically posted to the assignments tab so please take a screen shot of results and post it in the assignments tab | 4/18 | 15 | Individual Final Proposal | Resource: Business Proposal and Peer Review feedbackUpdate your Week Four business proposal recommendations using the feedback provided by your peers and facilitator. Highlight in yellow or green where you have made changes. THENAdd the following numbered components to your proposal[#8-#14]:Recommend appropriate pricing and nonpricing strategies for your new or existing good or service based on the projected economy’s stage in the business cycle and the prevailing projected economic conditions for one or more macroeconomic factors. Explain the evidence that supports these recommendations. Describe planning or operating decisions for your new or existing good or service based on the economy’s stage in the business cycle and other economic conditions.Recommend an appropriate course for your new or existing good or service based on the projected credit markets. Describe how current credit market conditions affect your planning or operating decision for your good or service.Recommend business decisions based on estimates of evolving international economic conditions. Be sure to relate decisions to international trade and comparative advantage. Describe how the international economy affects your planning or operating decisions for the good or service.Make any additional recommendations you think are important based on evolving economic conditions. | 4/18 | 15 | Learning Team Learning Team Reflection | Discuss this week’s objectives with your team. Your discussion should include the topics you feel comfortable with, any topics you struggled with, and how the weekly topics relate to application in your field.Prepare a 1- to 3-page paper detailing the findings of your discussion | 4/18 | 2 |

Optional Discussion Questions Week One Discussion Questions

Different products have different elasticities. Heart medication, for example, is inelastic, and corn is elastic. Find a product that has not already been selected by another student and describe its price elasticity and income elasticity. How much control might an organization have over pricing based on a product’s elasticity? Discuss which of the elasticity rules you used to determine your answer. *
All firms can increase the volume of goods or services sold by cutting prices. But the volume (quantity) of goods or services a firm sells differs from a firm’s revenues (price times quantity). Select your firm or a firm not previously discussed. What good or service does the firm sell? Is the price elasticity of demand elastic or inelastic for that good or service? How should the firm alter the price of the good or service to increase revenues? *
According to the Federal Housing Finance Agency house price index, U.S. housing prices declined throughout 2008 and 2009. What are two demand determinants and two supply determinants that might explain the broad decline in house prices that occurred in those years? Is the market currently in equilibrium? *
Movie theaters generally charge the same ticket price for all movies with evening show times, regardless of popularity. This pricing strategy causes surpluses (empty theater seats) for unpopular films and shortages (turning away prospective viewers) for popular films. How can movie theaters improve the pricing strategy to eliminate these inefficiencies? What is a disadvantage to your suggested approach? Week Two Discussion Questions What marginal costs does University of Phoenix incur in offering one more ECOP/561 class? What marginal revenues does University of Phoenix earn from each additional ECOP/561 class? How would you expect this marginal analysis to affect the volume of classes University of Phoenix offers? Does University of Phoenix maximize profits? *
Businesses often decide between using automation and labor in production. An automotive environment may have high fixed costs and low variable costs, and an industry that utilizes manual labor for production will have low fixed costs and high variable costs. How would you describe the balance between the costs of automation, or fixed costs, and the costs of labor, or variable costs? How has technology changed the balance between automation and labor? What type of industry benefits the most from technological innovation?

Choose an organization that has a high fixed cost and low variable cost balance to run its operations. Discuss the balance of fixed and variable costs for the organization. How can the organization use technology to change this balance for an advantage?

As a student, what opportunity costs do you confront by enrolling in University of Phoenix’s MBA program? Does your organization or an organization with which you are familiar consider opportunity costs when evaluating strategic opportunities? For your organization, are opportunity costs fixed costs, variable costs, both, or neither? Week Three Discussion Questions

How many major wireless phone handset manufacturers are there? What is the market structure? What pricing strategies do wireless phone handset manufacturers use? How do wireless phone makers attempt to differentiate their handset offerings? *
Complete the Economics for Managerial Decision Making: Market Structures simulation. In two of the four market structures, using price to compete is not an option. What can Quasar do to improve revenues in one of these structures? Select a company not selected by another student that has used this strategy. Describe the effects on the organization of using this strategy.

Identify an organization not previously selected and recommend methods to reduce costs. What effects do technologies have on costs? What are some lower-cost sources the organization can utilize to reduce costs? What considerations might cause a profit-maximizing firm to decide to forgo using lower-cost sources?

What market structure best characterizes the market in which University of Phoenix competes? How does this structure influence the university’s pricing strategy? How does University of Phoenix differentiate its product from that of its competitors? Has University of Phoenix erected nonprice barriers to entry in this market? Can University of Phoenix do more to create nonprice barriers to entry in this market? Week Four Discussion Questions

What is the economy’s current stage in the business cycle? Support your answer with data on the real GDP growth rate, the unemployment rate, and the CPI inflation rate. You may obtain these data from the Bureau of Economic Analysis website (http://www.bea.gov/) and the Bureau of Labor Statistics website (http://www.bls.gov/). *
Economic growth, as measured by increases in real GDP per capita, is a goal for most countries. This is often interpreted as an increase in economic welfare for citizens. How would you evaluate this assertion? If there are reasons to dispute it, why is it a nearly universally recognized goal? Are there better methods for measuring economic welfare? How would you measure it?

What are some of the damaging effects deflation has on an economy? What would be a monetary policy prescription to reduce or eliminate deflation? How would deflation affect your business or a business you are familiar with?

Recessions seem to show up every so often and create economic hardship. One might think that macroeconomic policymakers could tame the business cycle and implement policies that would end recessions. Are recessions a necessary fact of macroeconomic life? If not, what would it take to eliminate them? If they are unavoidable, what types of business can benefit from them? How would a recession affect your firm?

Week Five Discussion Questions

What new measures and tools has the Federal Reserve employed in the past 2 years that have not been employed in the past 2 decades? *
What does the Federal Reserve take into account when establishing general and specific rates of interest? Describe the recent tools the Federal Reserve has used to influence the U.S. economy, and explain their effects. In your opinion, have these measures been effective or ineffective in addressing the major concern or concerns of the business cycle?

As seen during the financial crisis of the 1930s and in recent history, markets are globally interconnected. Aside from financial markets, different countries have different resources. Choose a country other than the country in which you currently reside which has not already been selected by another student, and research the EIU country data. Based on absolute advantage and comparative advantage, explain the effect of global economic conditions on the choices available to that country. Include the current exchange rate of the country’s monetary unit.

Review the U.S. Trade Representatives website at http://www.ustr.gov/trade-agreements/free-trade-agreements. Select a country or trading bloc with which the United States has a current or pending free trade agreement. What are areas of comparative advantage of the United States and its trading partner? What are the benefits and disadvantages specific to this free trade agreement?

Week Six Discussion Questions

A business’s strategic choices are limited by economic conditions. Read the Big Drive Auto Scenario. Research macroeconomic data that correspond to industry data as reported by the Bureau of Economic Analysis. Perform an environmental analysis based on elasticities, a mix of fixed and variable costs, current market structure, pricing decisions, current economy as reflected in key economic indicators, the current credit market, and the global economy. What is one opportunity for Big Drive Auto that requires a business management decision? *
A business’s strategic choices are limited by economic conditions. Using the Kudler Fine Foods Virtual Organization, perform an environmental analysis based on elasticities, a mix of fixed and variable costs, current market structure, pricing decisions, current economy as reflected in key economic indicators, the current credit market, and the global economy. What is one opportunity for Kudler Fine Foods that requires a business management decision?

Based on your knowledge of strategy formation, how do the economic concepts in this course affect strategic planning?

Select a firm whose stock is publicly traded on a U.S. stock exchange. What strategic changes has this firm made over the past 18 months to respond to changing macroeconomic conditions? Were those strategic changes successful? Could the firm have made additional or better strategic choices?

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