The track Economics starts with the principles of economics and their significance for economic policy. This course provides a solid base for subsequent courses in the optional track economics. Economics is the social science of satisfying unlimited wants with scarce resources. Principles of Economics refers to the basic methods and concepts economists use when doing economics, hence to economic analysis. In this view the term “economics” refers to the discipline, not to the economy.
We will discuss consumer and producer behavior, markets, business cycles, economic growth, money and the financial system. We will also discuss fiscal and monetary policy and policy issues such as unemployment, inflation, and balance of payments surpluses and deficits.
In this course, the student will gain a thorough acquaintance with the principles of economics. He will understand the economic motives of consumers and producers, the market processes and macroeconomic developments, as well as the interdependencies between economic processes and the main features of public economic policy.
In this course, the student will gain a thorough acquaintance with the principles of economics. He will understand the economic motives of consumers and producers, the market processes en macro economic developments, as well as the interdependencies between economic processes and the main features of public economic policy.
At the end of the course, students should be able to:
describe the main principles of economics;
understand how the main mechanism in economics work;
identify some (global) economic problems in every day news, to relate them to economic concepts and to discuss these problems based on economic theory.
Mode of Instruction
Each week consists of two seminars:
During the first seminar (Tuesday), the main issues in the required reading will be identified and discussed. Based on an interactive setting, the focus will be on understanding the concepts and theories in micro and macro economics.
In the second seminar (Friday), students will apply their knowledge. Each week, the homework consists of preparing study problems. In class, students will discuss their solutions for the problems. Applying the concepts and theories, and explaining this to each other increases the knowledge and understanding of economics. Furthermore, it also provides a good preparation for the final exam.
Unweighted average of scores on seven weekly exercises (40%)
Unweighted average of scores on seven class participations (20%)
Final written exam (40%)
Every week, students are expected to prepare the reading material and the study questions. Based on this preparation, students are able and expected to participate in class. This means that students are expected to discuss and to present the concepts, theories, and the solutions for the study problems. Lecturers will grade class participants each seminar
The final exam consists of open questions. The questions will be based on the literature and the material which is discussed in class.
Stanley L. Brue, Campbell R. McConnell and Sean M. Flynn (2010), Essentials of Economics, 2e druk, International Student Edition, Boston etc.: McGraw-Hill/Irwin (ISBN 978-0-07-01 7266-1).
Additional information in the workbook to be posted at Blackboard. Lecture material to be posted at Blackboard
- Introduction: scarcity, choice, opportunity cost, markets, circular flow model. Chapters 1-2
- Demand and Supply: demand, supply, market equilibrium, elasticities, public goods, externalities. Chapters 3-5
- he Ideal Market: business, costs, pure competition. Chapters 6-7
- Imperfect Competition: monopoly, monopolistic competition, oligopoly, antitrust policy. Chapters 8-9
- Resources and Domestic Product: labor market, income inequality, poverty, gross domestic product. Chapters 10-12
- Macroeconomics: business cycles, unemployment, inflation, aggregate demand and supply, fiscal policy, debt and deficits. Chapters 13-15
- Monetary and International Economics: money, banking, money demand and supply, interest rates, monetary policy, international trade and exchange rates. Chapters 16-18
Preparation for first session