The Iowa Electronic Markets
The Role of Markets in
Business Decisions
Curriculum using the IEM
Prepared for the Winter 2002 Introduction to Business Courses
By
Sal Veas
Santa Monica College
Charley Lee Morrow
Delaware State University
1
The Role of Markets in Business Decisions
Teaching Objectives
The purpose of this module is to introduce the ideas of markets and their influence on business decisions
to the Introduction to Business class. These topics will help students better understand all aspects of
business including marketing, business formation, economics, finance, and global issues. The ultimate
aim is to expose students to the Iowa Electronic Market (IEM), which will serve to reinforce other lessons
throughout the course.
Overall Learning Objectives
Students should be able to:
1. Understand what a market is and who the players are
2. Understand the different characteristics of markets
3. Identify key markets that affect businesses
4. Use markets to get information about current and future events
IEM Learning Objectives
Students should be able to:
1. Review current market prices and explain what they mean.
2. Review data and determine if there are to be changes in market prices.
3. If changes in market prices are anticipated, explain why they may occur based on an
understanding of business principles.
Important Aspects of the Assignments

Students apply lessons from the lecture to real-world situations.

Students start with specific directed tasks that slowly force students to expand and generalize
their knowledge.

Students build on previous knowledge and experience.
Module Contents
1. Lecture Outline
2. Power Point Slides and lecture notes
3. Introduction to the IEM assignment (includes basic description of the IEM)
4. Introduction to the IEM power point slides and lecture notes
5. Assignments
2
Lecture Outline
The Role of Markets in Business Decisions
1.
2.
3.
4.
5.
6.
7.
Definition of a market
What do they exchange
Combinations of exchanges: goods, services, promises, money
Roles in a market: buyer, seller, rule maker
Types of Markets
Importance of markets to business people
Iowa Electronic Market (IEM)

MSFT (Microsoft) Price Level Market

Computer Industry Return Market
 Federal Reserve Monetary Policy Market
8. Modules
Lecture Summary
1. WHAT IS A MARKET
Two or more individuals, groups, or both, who come together to make exchanges. They are often
referred to as a Buyer and Seller.
2. WHAT DO THEY EXCHANGE?
Resources with differing levels of scarcity

Physical goods, such as, Soap and Cars

Services, such as, Haircuts and Checking Accounts

Money
3. DIFFERENT COMBINATIONS OF EXCHANGES:
A. Goods for Goods

Bartering, such as, a farmer who trades fruit grown on their farm for wine
produced by another farmer.

Countertrade, such as, Ford Tractors traded for commodities, such as, wheat,
hemp, or other industrial products
B. Goods for money, Money for goods

Purchasing household products from Walmart.
 Selling your car in the classified advertisements
C. Services for money, Money for services

Purchasing phone service from MCI
 Repairing a neighbors car for money
D. Promises for money; Money for Promises
3

Paying money for car insurance in exchange for a promise by the seller to
compensate you for loss or damages to your car

Receiving money from a lender (Student loans), in exchange for a promise to pay
back the loan plus Interest, some time in the future
E. Money for money

Exchanging currency in foreign markets
4. WHAT ROLES CAN PARTICIPANTS PLAY IN THE EXCHANGE?
A. Buyer or Seller
B. Price setter or Price taker

When purchasing gasoline, the buyer is a price taker and the gas company is a
price setter.
C. Rule Maker

SEC in the securities market
5. TYPES OF MARKETS
A. Legal and Illegal

Purchasing a prescription drug from your local pharmacy
 Purchasing cocaine from a drug dealer
B. Real and Virtual Markets

Purchasing your textbook at your college bookstore
 Purchasing your textbook at Amazon.com
C. 24/7 and Time Limited Markets

Purchasing your textbook at Amazon.com at anytime of day and any day of the
week.

Auctions, such as, eBay, where the timeframe to participate or complete the
transaction is limited and expires
6. IMPORTANT MARKETS

Labor

Capital

Ideas

Political

Information

Land

Currency

Financial

Stocks and bonds

Commodities

Futures

IEM
7. WHAT IS THE IOWA ELECTRONIC MARKET (IEM)

Go to Introduction Module
4

Federal Reserve Monetary Policy Market

Computer Industry Returns Market

MSFT (Microsoft) Price Level Market
8. BUSINESS FUNCTION SPECIFIC MODULES

Economics

Forms of Business Ownership

Global Business

Marketing

Money and Banking

Finance

Securities

Personal Finance
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