Supply and Demand and Global Business Applications

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You will learn the concepts and tools needed to make optimal decisions such as the following: marginal analysis; supply and demand; competition; anti-trust laws and government regulations; international business environment; international trade; global operations; and cultural sensitivity. Watch the following video for an introduction to this course: Note: View the video in full screen at 720p for best results. Competencies This course provides guidance to help you demonstrate the following 7 competencies: Competency 309. 1. 1: Marginal Analysis The graduate correctly applies marginal analysis.

Competency 309. 1. 2: Supply and Demand The graduate applies the laws of supply and demand to develop a desirable relationship between supply and demand in a given situation. Competency 309. 1. 3: Competition The graduate analyzes a firm’s competitive environment to determine whether the market exhibits characteristics of perfect competition, monopoly, oligopoly, and monopolistic competition. Competency 309. 2. 1: International Business Environment The graduate understands and can make recommendations for competing in the global business arena. Competency 309. 2. 2: International Trade

The graduate can recognize the implications of international trade and make recommendations based on a firm’s mission. Competency 309. 2. 3: Global Operations The graduate can determine the advantages and disadvantages of various types of global operations. Competency 309. 3. 2: Cultural Sensitivity The graduate demonstrates sensitivity to cultural differences that impact business practice in foreign markets. Course Mentor Assistance As you prepare to successfully demonstrate competency in this subject, remember that course mentors stand ready to help you reach your educational goals.

As subject matter experts, mentors enjoy and take pride in helping students become reflective learners, problem solvers, and critical thinkers. Course mentors are excited to hear from you and eager to work with you. 1 / 19 EGT1 – Economics and Global Business Applications Course of Study Successful students report that working with a course mentor is the key to their success. Course mentors are able to share tips on approaches, tools, and skills that can help you apply the content you’re studying. They also provide guidance in assessment preparation strategies and troubleshoot areas of deficiency.

Even if things don’t work out on your first try, course mentors act as a support system to guide you through the revision process. You should expect to work with course mentors for the duration of your coursework, so you are welcome to contact them as soon as you begin. Course mentors are fully committed to your success! Preparing for Success The information in this section is provided to detail the resources available for you to use as you complete this course. Learning Resources The learning resources listed in this section are required to complete the activities in this course.

For many resources, WGU has provided automatic access through the course. However, you may need to manually enroll in or independently acquire other resources. Read the full instructions provided to ensure that you have access to all of your resources in a timely manner. Other Learning Resources Textbook Companion Websites Economics: McConnell 19/e International Business: Ball 13/e Become familiar with the online publisher provided resources that support each respective text by clicking on the appropriate link above.

When using the resources for specific chapters, select the chapter you want to review from the drop box at the top of the screen and review the various learning resources available. Note: Publishers provide free additional content on their respective websites as linked here. The content varies by publisher. “Premium Content” as marked with an asterisk (*) is also available as a student purchase if desired. The resources provided by WGU (e-texts and accompanying “free content”) is more than sufficient to prepare for this course.

Note: McGraw-Hill has changed their publisher-provided website to reflect the 13th edition of International Business. Some chapters have changed names, been renumbered, or eliminated. The links to the companion site below have been updated to reflect the new 13th edition information on the McGraw-Hill website, but the information aligns to your reading in the 12th edition. Automatically Enrolled Learning Resources You can access the learning resources listed in this section by clicking on the links provided throughout the course. You may be prompted to log in to the WGU student portal to access the resources.

Economics and Global Business Applications Course of Study VitalSource E-Texts The following textbooks are available to you as e-texts within this course. You will be directly linked to the specific readings required within the activities that follow. Ball, D. A. , McCulloch, W. H. , Jr. , Geringer, J. M. , Minor, M. S. , ; McNett, J. M. (2009). International business: The challenge of global competition (12th ed. ). McGraw-Hill. ISBN: 9780077318833. McConnell, C. R. , ; Brue, S. L. , Flynn, S. (2012). Economics (19th ed. ). McGraw-Hill.

These e-texts are available to you as part of your program tuition and fees, but you may purchase hard copies at your own expense through a retailer of your choice. If you choose to do so, please use the ISBN listed to ensure that you receive the correct edition. Thinkwell You will access Thinkwell materials in the following Thinkwell course at the activity level within this course. This web-based resource includes multimedia video lectures, review notes, interactive animations, and sample exercises. Thinkwell Economics Marginal Analysis

Study Note: If you are new to the study of economics, reviewing the “Supply & Demand: Elasticity” section first will give you foundational information that will make it easier to understand the “Marginal Analysis” section. Chapters 8, 9, 10 and 11 in Economics explain the four market structures. In contrast to perfect competition, imperfect competition refers to markets characterized by monopoly (only one firm and no rivals) and also to monopolistic competition and oligopoly, where firms have rivals but do not face as much competition as purely competitive firms.

Regardless of the structure, firms use marginal analysis to maximize their profits. How Do Households and Firms Use Marginal Analysis? Chapter 7 in Economics applies this concept to the decision-making behavior of businesses—businesses compare the marginal cost to the marginal revenue to determine the level of output that would maximize profit. Regardless of the entity, optimal decisions are said to occur when the marginal cost is equal to the marginal benefit. This topic addresses the following competency: Competency 309. 1.

Marginal Analysis The graduate correctly applies marginal analysis. Textbook Companion Website Activities Review the following chapters in Economics by engaging with the textbook companion website: 3 / 19 EGT1 – Economics and Global Business Applications Course of Study chapter 7 (“Business and the Costs of Production”) chapter 8 (“Pure Competition in the Short Run”) chapter 9 (“Pure Competition in the Long Run”) chapter 10 (“Pure Monopoly”) chapter 11 (“Monopolistic Competition and Oligopoly”) Thinkwell Activities: Chapters 4, 5 and 6

To supplement your understanding, use the following resources from Thinkwell Economics Online: chapter 4 (“Productions and Costs”) chapter 5 (“Pure Competition”) chapter 6 (“Other Market Models”) Economics and Global Business Applications Performance Task Complete the following task in TaskStream: Economics and Global Business Applications: Task 309. 1. 1. 05, 06 For details about this performance assessment, see the “Assessment Preparation” box in this course. Read Chapters 7 – 11 in Economics Read the following chapters in Economics:

Chapter 7 (“Business and the Costs of Production”) chapter 8 (“Pure Competition in the Short Run”) chapter 9 (“Pure Competition in the Long Run”) chapter 10 (“Pure Monopoly”) chapter 11 (“Monopolistic Competition and Oligopoly”) When you have completed the reading, you will be able to do the following: identify the relationship between marginal revenue, marginal cost, and profit know why economic costs include both explicit costs and implicit costs explain how the law of diminishing returns relates to the firm’s short-run production costs.

And differentiate among fixed costs, variable costs, total costs, average costs, and marginal costs compare and contrast the main characteristics of the four basic market models explain the conditions required for purely competitive markets know how purely competitive firms maximize profits or minimize losses tell how industry entry and exit produce economic efficiency describe why firms in any structure use the MR = MC rule of profit maximization Supply & Demand; Elasticity 4 / 19 EGT1 – Economics and Global Business Applications

Course of Study Chapter 3 covers supply and demand. The law of supply tells you that the supply curve slopes upward because the quantity supplied of a good increases when its price increases, holding other factors constant. The other side of the market is the consumer. Demand refers to the amount of a good or service buyers are able and willing to purchase. The law of demand indicates that the demand curve slopes downward, because the quantity demanded of a good increases when its price decreases, holding other factors constant.

Chapter 4 in Economics covers elasticity, a concept that helps you understand how people respond to changes in the price of the good, their income, or the price of a related good. The total revenue test helps business owners make important pricing decisions based on the elasticity of demand. Supply & Demand; Elasticity Supply and demand are the foundation of economic analysis and it is essential that you have a thorough understanding of these concepts. Pay close attention to the more subtle nuances of supply and demand, especially the “movement along a curve” versus a “shift” of the curve.

Once you master those ideas the elasticity concept will help you understand market behavior as it pertains to responsiveness to changes in price or other factors that influence supply or demand respectively. This topic addresses the following competency: Competency 309. 1. 2: Supply and Demand The graduate applies the laws of supply and demand to develop a desirable relationship between supply and demand in a given situation. Read Chapter 4 in Economics Read the following chapter in Economics.

Chapter 4 (“Elasticity”) When you have completed the reading, you will be able to do the following: differentiate between elastic and inelastic demand discuss the application of elastic and inelastic demand in a given marketing situation use demand and supply concepts to determine market equilibrium explain how changes in supply and demand affect equilibrium prices and quantities describe what causes surpluses and shortages in the product market calculate price elasticity of demand and price elasticity of supply show the relationship between total revenue and price elasticity of supply explain the differences between price elasticity of demand and income elasticity of demand.

Textbook Companion Website Activities Review the following chapters in Economics by engaging with the textbook companion website: chapter 3 (“Demand, Supply and Market Equilibrium “) 5 / 19 EGT1 – Economics and Global Business Applications Course of Study chapter 4 (“Elasticity”) Thinkwell Activities: Chapter 2 To supplement your understanding, use the following resources from Thinkwell Economics Online: chapter 2 (“Understanding Markets”)

Economics and Global Business Applications Performance Task Complete the following task in TaskStream: Economics and Global Business Applications: Task 309. 1. 2. 08, 09 For details about this performance assessment, see the “Assessment Preparation” box in this course. Chapter 3 in Economics Read the following chapter in Economics: chapter 3 (“Demand, Supply and Market Equilibrium”) When you have completed the reading, you will be able to do the following: understand supply and demand know factors that affect supply and demand differentiate between elastic and inelastic demand discuss the application of elastic and inelastic demand in a given marketing situation use demand and supply concepts to determine market equilibrium explain how changes in supply and demand affect equilibrium prices and quantities describe what causes surpluses and shortages in the product market.

Microeconomics: Industrial and Social Regulation by Government Some have called deregulation the greatest social experiment of the last fifty years. Many industries have been deregulated since the 1980s, and there have been mixed results. The intention was to introduce more competition into those industries so that prices would decrease.

That would be a good thing for consumers, but did it actually happen? How has regulation or deregulation affected your life? Is regulation a good or bad idea? What ought to be the role of government in relation to the economy? How much regulation do you think is appropriate? Why? What Is Government Regulation and Why Does It Occur? Deregulation came about in the 1970s and 1980s as a result of the greater acceptance of the legal cartel theory, which gave increasing evidence of inefficiency in regulated industries, and the contention that government was regulating potentially competitive industries.

Industries that 6 / 19 EGT1 – Economics and Global Business Applications Course of Study were deregulated included airline, trucking, banking, railroad, natural gas, television broadcasting, electricity, and telecommunications. Some criticize deregulation, but for the most part it appears to have caused lower prices, lower costs, and increased output, primarily from airlines, railroads, and trucking. Deregulation has also been attributed to technological advances in new and improved products. This topic addresses the following competency: Competency 309. 1.

The graduate analyzes a firm’s competitive environment to determine whether the market exhibits characteristics of perfect competition, monopoly, oligopoly, and monopolistic competition. Textbook Companion Website Activities Review the following chapters in Economics by engaging with the textbook companion website: chapter 18 (“Antitrust Policy and Regulation”) Message Board and FAQs: Competition and Government Regulation Visit the message board. Post comments, questions, and helpful learning hints. Read the FAQs and make suggestions for additional topics.

Economics and Global Business Applications Performance Task Complete the following task in TaskStream: Economics and Global Business Applications: Task 309. 1. 3-06 For details about this performance assessment, see the “Assessment Preparation” box in this course. Chapter 18 in Economics Read the following chapter in Economics: chapter 18 (“Antitrust Policy and Regulation”) When you have completed the reading, you will be able to do the following: describe the characteristics of natural monopoly describe the core elements of the major antitrust (antimonopoly) laws in the United States identify key issues relating to the interpretation and application of antitrust laws discuss the optimal level of social regulation International Business.

The Global Business Environment 7 / 19 EGT1 – Economics and Global Business Applications Course of Study Understanding international business begins with knowing historic events and appreciating the forces and institutions that shape this environment. International trade requires international organizations that are able to act as liaisons between trading entities. Trading blocs exist and impact trade among nations.

Currency exchange, how the exchange rate is determined, and the role of the IMF must also be considered. Core Concepts of International Business A global economy requires an understanding and appreciation for the forces and institutions that shape this environment. Basic concepts that are important to any business entering or doing business internationally are introduced here. This topic addresses the following competencies: Competency 309. 2. 1: International Business Environment The graduate understands and can make recommendations for competing in the global business arena.

Competency 309. 2. 2: International Trade The graduate can recognize the implications of international trade and make recommendations based on a firm’s mission. Competency 309. 2. 3: Global Operations The graduate can determine the advantages and disadvantages of various types of global operations. Chapter 2 in International Business Read the following chapter in International Business: chapter 2 (“International Trade and Foreign Direct Investment”) What strategy can be used to begin or expand operations in a foreign company? How will this activity be funded?

Chapter 2 introduces considerations regarding international trade and how to approach this process. When you have completed the reading, you will be able to do the following: explain how international trade has grown know what direction international trade is heading and who trades with whom know what direction foreign direct investment is heading and how fast it is growing show what the reasons are for entering foreign markets explain why globalization of an international firm occurs over at least seven dimensions explain how a company can be partially global in some dimensions and completely global in others

Chapter 4 in International Business Read the following chapter in International Business: chapter 4 (“International Institutions from an International Business Perspective”) 8 / 19 EGT1 – Economics and Global Business Applications Course of Study International trade requires international organizations that are able to act as liaisons between trading entities. At times, disputes occur. Who will mediate? How are decisions enforced? What is the role of the trading bloc and how has this affected trade on a global basis?

You will cover topics like these in chapter 4. When you have completed the reading, you will be able to do the following: understand and appreciate how international institutions and agreements affect international businesses identify the activities of the United Nations (UN) in economic and social fields tell why the World Trade Organization (WTO) is important to world business and trade know about the European Union (EU) and how it affects business list the major purposes of the Organization for Economic Cooperation and Development (OECD).

Explain the four major levels of economic integration agreements and list other regional integration agreements Textbook Companion Website Activities Review the following chapters in International Business by engaging with the textbook companion website: chapter 1 (“The Challenging World of International Business”) chapter 2 (“International Trade and Foreign Direct Investment”) chapter 3 (“International Institutions from an International Business Perspective”) Note: McGraw-Hill has changed their publisher-provided website to reflect the 13th edition of International Business.

Some chapters have changed names, been renumbered, or eliminated. The links to the companion site below have been updated to reflect the new 13th edition information on the McGraw-Hill website, but the information aligns to your reading in the 12th edition. Message Board and FAQs: International Business Visit the message board. Post comments, questions, and helpful learning hints. Read the FAQs and make suggestions for additional topics. Chapter 1 in International Business Read the following chapter in International Business: chapter 1 (“The Rapid Change of International Business”)

When you have completed the reading, you will be able to do the following: explain how the internationalization of markets has forced dramatic changes in business practice list the various names given to firms that have substantial operations in more than one country 9 / 19 EGT1 – Economics and Global Business Applications Course of Study explain how the Internet has impacted international business firms identify the five drivers/changes leading international firms toward globalization contrast how international business differs from domestic business know the three environments in which an international company operates.

International Business: Cultural Sensitivity (Part 1) The following chapters of the “International Business” section of this course will prepare you to submit the “Cultural Sensitivity” task (309. 2. 4-05-07) in TaskStream for grading. The term cultural sensitivity refers to an appreciation of the cultural differences found within a global economy. People everywhere share many common attributes and characteristics, but regional, ethnic, and cultural differences also exist. Businesses that operate internationally must decide on the “right” approach for bringing their products to various markets.

Political, legal and financial forces also impact the way business can be conducted in various parts of the world. Sociocultural Forces and Labor Forces People everywhere share many common attributes and characteristics, but regional, ethnic, and cultural differences also exist. How does a business that operates internationally decide on the “right” approach for bringing their products to various markets? This topic addresses the following competency: Competency 309. 3. 2: Cultural Sensitivity The graduate demonstrates sensitivity to cultural differences that impact business practice in foreign markets.

Chapter 11 in International Business Read the following chapter in International Business: chapter 11 (“Labor Forces”) When you have completed the reading, you will be able to do the following: recognize forces beyond management control that affect the availability of labor understand the basics of the immigration system in the United States discuss labor productivity understand women’s labor, employment, and social roles Chapter 5 in International Business Read the following chapter in International Business: chapter 5 (“Sociocultural Forces”)

When you have completed the reading, you will be able to do the following: describe how multicultural issues impact the marketing approach for products in a given 10 / 19 EGT1 – Economics and Global Business Applications Course of Study market explain how cross-cultural communication issues affect marketing strategies evaluate the impact of cross-cultural ethical differences on marketing strategies understand the significance of culture for international business understand the sociocultural components of culture Markets, Entry Modes ; Marketing

As a business owner you have decided that it is a good idea to go international. Now what? Is your current marketing strategy appropriate? What cultural considerations need to be included in your marketing strategy? How do you enter the targeted market in the first place? This topic addresses the following competencies: Competency 309. 2. 1: International Business Environment The graduate understands and can make recommendations for competing in the global business arena. Competency 309. 2. 2: International Trade

The graduate can recognize the implications of international trade and make recommendations based on a firm’s mission. Competency 309. 2. 3: Global Operations The graduate can determine the advantages and disadvantages of various types of global operations. Chapter 15 in International Business Read the following chapter in International Business: chapter 15 (“Entry Modes”).

When you have completed the reading, you will be able to do the following: identify two different forms of policy and discuss which might be helpful and harmful to firms doing international business explain why firms export and the three problem areas of exporting identify some sources of export financing Textbook Companion Website Activities Review the following chapters in International Business by engaging with the textbook companion website: chapter 4 (“Sociocultural Forces”) chapter 12 (“Assessing International Markets”) chapter 13 (“Entry Modes”) chapter 14 (“Export and Import Practices”) Note: McGraw-Hill has changed their publisher-provided website to reflect the 13th edition of International Business. Some chapters have changed names, been renumbered, or 11 / 19.

Economics and Global Business Applications Course of Study eliminated. The links to the companion site below have been updated to reflect the new 13th edition information on the McGraw-Hill website, but the information aligns to your reading in the 12th edition. Chapter 14 in International Business Read the following chapter in International Business: chapter 14 (“Assessing and Analyzing Markets”) When you have completed the reading, you will be able to do the following: describe how multicultural issues impact the marketing approach for products in a given market.

Explain how cross-cultural communication issues affect marketing strategies understand international market entry methods International Business: Cultural Sensitivity (Part 2) It has been said that in the global marketplace (where there is no global standardization of products or brands because consumers are not standardized), businesses aim for either the lowest common denominator advertising or advertising that is specific to a particular market, and not anywhere else. What is your opinion? Export and Import Practices and Marketing Internationally.

This section continues to answer the questions every business that wants to operate internationally needs to address about marketing practices, cultural considerations, and financing. These are all serious issues that must be carefully thought through to be successful. This topic addresses the following competencies: Competency 309. 2. 1: International Business Environment The graduate understands and can make recommendations for competing in the global business arena. Competency 309. 2. 2: International Trade

The graduate can recognize the implications of international trade and make recommendations based on a firm’s mission. Competency 309. 2. 3: Global Operations The graduate can determine the advantages and disadvantages of various types of global operations. Competency 309. 3. 2: Cultural Sensitivity The graduate demonstrates sensitivity to cultural differences that impact business practice in foreign markets. Chapter 17 in International Business Read the following chapter in International Business: chapter 17 (“Marketing Internationally”) 12 / 19 EGT1 – Economics and Global Business Applications

Course of Study When you have completed the reading, you will be able to do the following: understand why there are differences between domestic and international marketing explain why international marketing managers may wish to standardize the marketing mix explain why the design of organizational structures is important to international companies Textbook Companion Website Activities Review the following chapters in International Business by engaging with the textbook companion website: chapter 14 (“Export and Import Practices”) chapter 15 (“Marketing Internationally”)

Note: McGraw-Hill has changed their publisher-provided website to reflect the 13th edition of International Business. Some chapters have changed names, been renumbered, or eliminated. The links to the companion site below have been updated to reflect the new 13th edition information on the McGraw-Hill website, but the information aligns to your reading in the 12th edition. Message Board and FAQs: Marketing Internationally Visit the message board. Post comments, questions, and helpful learning hints. Read the FAQs and make suggestions for additional topics. Chapter 16 in International Business Read the following in International Business:

Chapter 16 (“Export and Import Practices”) When you have completed the reading, you will be able to explain the three problems associated with exporting for firms, identify and explain terms of sale, and identify the sources of export financing and how firms use them. International Business: Forces that Affect International Trade (Part 3) Political forces affect international business, and businesses have become more and more sensitive to these political forces as they plan operations. A hospitable political atmosphere permits business to flourish, even if the country is poor in natural resources.

The opposite is also true, and some countries blessed with natural resources are poor because of government instability or hostility. Legal forces also affect firms doing business internationally, and they must be aware of the size 13 / 19 EGT1 – Economics and Global Business Applications Course of Study and complexity of various legal problems. A myriad of laws exist that differ from one country to another. How are disputes settled? How will contracts be enforced? How are copyrights and patents protected? Financial forces also create issues for firms when doing business internationally.

Considerations must be given to foreign currency exchange quotations, spot and forward rates, government intervention, and government controls in exchange markets. The impact of inflation is also a concern. Political, Legal, and Financial Forces If all politics are local, what must a business know and learn about the political forces that exist in the foreign country it operates in? What about the legal and financial forces? Lack of understanding or appreciation of the differences in the foreign country could spell disaster for the domestic business. Knowledge is power. This topic addresses the following competencies:

Competency 309. 2. 1: International Business Environment The graduate understands and can make recommendations for competing in the global business arena. Competency 309. 2. 2: International Trade The graduate can recognize the implications of international trade and make recommendations based on a firm’s mission. Competency 309. 2. 3: Global Operations The graduate can determine the advantages and disadvantages of various types of global operations. Competency 309. 3. 2: Cultural Sensitivity The graduate demonstrates sensitivity to cultural differences that impact business practice in foreign markets.

Chapter 9 in International Business Read the following chapter in International Business: chapter 9 (“Intellectual Property and Other Legal Forces”) When you have completed the reading, you will be able to do the following: define the legal forces that confront international business explain why foreign law is important define contract devices and intellectual property define antitrust laws describe how U. S. laws affect international business operations Chapter 10 in International Business Read the following chapter in International Business: 14 / 19 EGT1 – Economics and Global Business Applications Course of Study

Chapter 10 (“Understanding the International Monetary System and Financial Forces”) When you have completed the reading, you will be able to do the following: define foreign exchange (FX) markets; define currency exchange risks and currency exchange controls explain how financial forces such as balance of payments, tariffs, taxes, inflation, fiscal and monetary policies, and differing accounting practices affect business.

Explain how the world monetary system developed from the end of World War II to the present know about the original and revised activities of the International Monetary Fund tell about the purposes of the World Bank list the relative strengths and weaknesses of currencies and the reasons for them understand the balance of payments (BOP) realize how “Big Mac Currencies” and purchasing power parity theory relate list the major foreign currency exchange (FX) markets of the world Textbook Companion Website Activities Review the following chapters in International Business by engaging with the textbook companion website: chapter 6 (“Political and Trade Forces”) chapter 7 (“Intellectual Property and Other Legal Forces”) chapter 8 (“The International Monetary System and Financial F.

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