Basic Economics for Industrial Engineering - 3GMC0415

Goal(s)

Economic analysis of markets and company organisation is an essential part of industrial engineering studies. Industrial engineering careers aim to provide efficient conditions in terms of value creation and profitability.

This course presents, in a systematic way, the main tools for economic analysis which are necessary for industrial engineering careers.

Content(s)

The course is structured in three parts that combine lectures and tutorials (TD):

• Individual Decision-Making and Collective Behavior:**
  An introduction to major issues related to decision-making, strategic interactions, coordination, and motivation. The course explores individual and collective behaviors, aiming to formalize and theorize these problems. Students are introduced to marginal reasoning and the concept of equilibrium.
  In tutorials, students are:
  (i) placed in real-life situations (experimental economics) where they must make actual decisions in a variety of contexts;
  (ii) guided through exercises involving formalization and case-solving.

• Market and Competition Economics and Business Strategy Analysis:**
  An introduction to the tools used to analyze markets and competition. The objective is to provide students with the foundational knowledge required to operate effectively in markets from a business perspective.
  Focus is placed successively on market structures, the nature of traded goods, and the presence of externalities.
  Students learn to use economic tools to formalize horizontal and vertical competition: monopolies and oligopolies, entry barriers, substitute products, competition with suppliers and customers. Tactical issues such as pricing strategies and product differentiation are emphasized. Basic aspects of public regulation of competition are also presented.
  Regarding externalities, students discover the importance of property rights as incentive mechanisms for businesses. Examples are drawn from the domains of scarce resources and the environment (negative externalities), and from research and development (positive externalities). The main instruments for regulating externalities are introduced, with particular attention paid to the fight against climate change.

• Macroeconomics:
  This part introduces key national accounting concepts (GDP, value added, HDI) to help understand the role of economic growth in the development of countries.
  Monetary creation is analyzed to help future engineers understand the role of money and debt, with special attention paid to new forms of currency.
  Globalization and international trade are also studied to better understand the role of global commerce and the effects of tariffs on the development of economies.