This topic relates to capital budgeting. The starting point is an explanation of why investment analysis is important in managerial economics, and the different types of investment and investment decision. Cash flow analysis and the principles involved in identifying and measuring relevant cash flows is discussed. The concept of risk and types of risk, stand-alone risk, within-firm risk and market risk, are discussed. The security market line (SML), beta coefficients and the capital asset pricing model (CAPM) are explained. The cost of capital is examined, explaining the calculation of the cost of debt, the cost of equity and the weighted average cost of capital (WACC). Methods of evaluation of individual projects are discussed, with a focus on net present value (NPV) and internal rate of return (IRR). There is a discussion of the determination of the optimal capital budget for a firm, in terms of the investment opportunity schedule (IOS) and the marginal cost of capital (MCC), with the distinction between mutually exclusive projects and independent projects. Case studies include two resource-heavy situations: the HS2 rail link and 5G telecommunications.

This topic examines government policy and regulation. The starting point is the objectives of government regulation and market failure. The implications for managerial decision making are outlined. The nature of market failure and its different aspects are discussed. Externalities are discussed, and the policy implications. Public goods, and their nature and policy implications, are examined. Imperfect information and the policy implications are discussed. Transaction costs are discussed. Monopoly and the nature of market power and its consequences are examined. Strategic behaviour, such as collusion, predatory pricing and exclusive dealing, is discussed. The distinction between structural and strategic barriers to entry and their different policy implications is explained. Aspects of new technology are discussed, such as network effects and the ‘winner-takes-most’ phenomenon. Various policy approaches and their costs and benefits are examined. Case studies involve two situations in the UK where governments may have made errors of policy. A final case study relates to the global phenomenon of increasing concentration and its consequences.

As six women entered the field of Democratic presidential candidates in 2019, the political media rushed to declare 2020 a new “year of the woman.” In the Washington Post, one political commentator proclaimed that “2020 may be historic for women in more ways than one” given that four of these woman presidential candidates were already holding a U.S. Senate seat. A writer for Vox similarly hailed the “unprecedented range of solid women” seeking the nomination and urged Democrats to nominate one of them. Politico ran a piece definitively declaring that “2020 will be the year of the woman” and went on to suggest that the “Democratic primary landscape looks to be tilted to another woman presidential nominee.” The excited tone projected by the media carried an air of inevitability: after Hillary Clinton lost in 2016, despite receiving 2.8 million more popular votes than her opponent, ever more women were running for the presidency.