Introduction to Economics

Bachelor 2021/2022

Category 'Best Course for Career Development'

Category 'Best Course for Broadening Horizons and Diversity of Knowledge and Skills'

Category 'Best Course for New Knowledge and Skills'

Type: Compulsory course (HSE University and Kyung Hee University Double Degree Programme in Economics and Politics in Asia)

Area of studies: Foreign Regional Studies

Delivered by: Faculty of World Economy and International Affairs

Where: Faculty of World Economy and International Affairs

When: 1 year, 1-4 module

Mode of studies: distance learning

Online hours: 30

Open to: students of one campus

Instructors: Ivan Deseatnicov

Language: English

ECTS credits: 6

Contact hours: 120

Full Syllabus Ask Question

Abstract

No Pre-requisites required. Anyone who interested in basic economics is always welcome. Introduction to Economics is a foundation for the application of economics knowledge for other related subject in the course. It is an introductory course in microeconomics and macroeconomics, which introduces the basic concepts of economics. Microeconomics (Introduction to Economics I) discusses applications-the study of how individuals make a decision and interact in markets, under conditions of perfect and imperfect competition. The study of macroeconomics (Introduction to Economics II) involves economy-wide issues such as inflation, unemployment, economic growth and policies.

Learning Objectives

To introduce the key principles of economics
To examine the theories of microeconomics and macroeconomics, and how they are applied in the real world
To develop critical thinking and problem-solving skills of students
To create a strong understanding of economics that will serve as a foundation for further studies of the students

Expected Learning Outcomes

students should describe the following: how a budget constraint represents the choices a consumer can afford; how indifference curves can be used to represent a consumer’s preferences; how a consumer’s optimal choices are determined; how a consumer responds to changes in income and changes in prices; how to decompose the impact of a price change into an income effect and a substitution effect; how to apply the theory of consumer choice to three questions about household behavior.
students should describe the following: how economists apply the methods of science; how assumptions and models can shed light on the world; two simple models—the circular flow and the production possibilities frontier; the difference between microeconomics and macroeconomics; the difference between positive and normative statements; the role of economists in making policy; why economists sometimes disagree with one another.
students should describe the following: how everyone can benefit when people trade with one another; the meaning of absolute advantage and comparative advantage; how comparative advantage explains the gains from trade; how to apply the theory of comparative advantage to everyday life and national policy.
students should describe the following: how much economic growth differs around the world; why productivity is the key determinant of a country’s standard of living; the factors that determine a country’s productivity; how a country’s policies influence its productivity growth.
students should describe the following: how net exports measure the international flow of goods and services; how net capital outflow measures the international flow of capital; why net exports must always equal net foreign investment.
students should describe the following: how saving, domestic investment, and net capital outflow are related; the meaning of the nominal exchange rate and the real exchange rate; purchasing-power parity as a theory of how exchange rates are determined.
students should describe the following: how the consumer price index (CPI) is constructed; why the CPI is an imperfect measure of the cost of living; how to compare the CPI and the GDP deflator as measures of the overall price level; how to use a price index to compare dollar figures from different times; the distinction between real and nominal interest rates
students should describe the following: how to build a model to explain an open economy’s trade balance and exchange rate; how to use the model to analyze the effects of government budget deficits; how to use the model to analyze the macroeconomic effects of trade policies; how to use the model to analyze political instability and capital flight
students should describe the following: some of the important financial institutions in the U.S. economy; how the financial system is related to key macroeconomic variables; the model of the supply and demand for loanable funds in financial markets; how to use the loanable-funds model to analyze various government policies; how government budget deficits affect the U.S. economy
students should describe the following: that economics is about the allocation of scarce resources; that individuals face trade-offs; the meaning of opportunity cost; how to use marginal reasoning when making decisions; how incentives affect people’s behavior; why trade among people or nations can be good for everyone; why markets are a good, but not perfect, way to allocate resources; what determines some trends in the overall economy;
students should describe the following: the data used to measure the amount of unemployment; how unemployment can result from minimum-wage laws; how unemployment can arise from bargaining between firms and unions; how unemployment results when firms choose to pay efficiency wages.
students should describe the following: the effects of government policies that place a ceiling on prices; the effects of government policies that put a floor under prices; how a tax on a good affects the price of the good and the quantity sold; that taxes levied on sellers and taxes levied on buyers are equivalent; how the burden of a tax is split between buyers and sellers.
students should describe the following: the labor demand of competitive, profit-maximizing firms; the household decisions that lie behind labor supply; why equilibrium wages equal the value of the marginal product of labor; how the other factors of production—land and capital—are compensated; how a change in the supply of one factor alters the earnings of all of the factors.
students should describe the following: the link between buyers’ willingness to pay for a good and the demand curve; how to define and measure consumer surplus; the link between sellers’ costs of producing a good and the supply curve; how to define and measure producer surplus; that the equilibrium of supply and demand maximizes total surplus in a market.
students should describe the following: the meaning of the elasticity of demand; what determines the elasticity of demand; the meaning of the elasticity of supply; what determines the elasticity of supply; the concept of elasticity in three very different markets (the market for wheat, the market for oil, and the market for illegal drugs).
students should describe the following: the relationship between present value and future value; the effects of compound growth; how risk-averse people reduce the risk they face; how asset prices are determined.
students should describe the following: the theory of liquidity preference as a short-run theory of the interest rate; how monetary policy affects interest rates and aggregate demand; how fiscal policy affects interest rates and aggregate demand; the debate over whether policymakers should try to stabilize the economy.
students should describe the following: three key facts about short-run economic fluctuations; how the economy in the short run differs from the economy in the long run; how to use the model of aggregate demand and aggregate supply to explain economic fluctuations; how shifts in either aggregate demand or aggregate supply can cause booms and recessions.
students should describe the following: what a competitive market is; what determines the demand for a good in a competitive market; what determines the supply of a good in a competitive market; how supply and demand together set the price of a good and the quantity sold; the key role of prices in allocating scarce resources in market economies.
students should describe the following: what an externality is, why externalities can make market outcomes inefficient; the various government policies aimed at solving the problem of externalities; how people can sometimes solve the problem of externalities on their own; why private solutions to externalities sometimes do not work; the defining characteristics of public goods and common resources;
students should describe the following: what characteristics make a market competitive; how competitive firms decide how much output to produce; how competitive firms decide when to shut down production temporarily; how competitive firms decide whether to exit or enter a market; how firm behavior determines a market’s short-run and long-run supply curves.
students should describe the following: what items are included in a firm’s costs of production; the link between a firm’s production process and its total costs; the meaning of average total cost and marginal cost and how they are related; the shape of a typical firm’s cost curves; the relationship between short-run and long-run costs.
students should describe the following: what market structures lie between monopoly and competition; competition among firms that sell differentiated products; how the outcomes under monopolistic competition and under perfect competition compare; the desirability of outcomes in monopolistically competitive markets; the debate over the effects of advertising; the debate over the role of brand names.
students should describe the following: what money is and what functions money has in the economy; what the Federal Reserve System is; how the banking system helps determine the supply of money; what tools the Federal Reserve uses to alter the supply of money.
students should describe the following: what outcomes are possible when a market is an oligopoly; the prisoners’ dilemma and how it applies to oligopoly and other issues; how the antitrust laws try to foster competition in oligopolistic markets.
students should describe the following: why an economy’s total income equals its total expenditure; how gross domestic product (GDP) is defined and calculated; the breakdown of GDP into its four major components; the distinction between real GDP and nominal GDP; whether GDP is a good measure of economic well-being.
students should describe the following: why inflation results from rapid growth in the money supply; the meaning of the classical dichotomy and monetary neutrality; why some countries print so much money that they experience hyperinflation; how the nominal interest rate responds to the inflation rate; the various costs that inflation imposes on society.
students should describe the following: why policymakers face a short-run trade-off between inflation and unemployment; why the inflation-unemployment trade-off disappears in the long run; how supply shocks can shift the inflation-unemployment trade-off; the short-run cost of reducing inflation; how policymakers’ credibility might affect the cost of reducing inflation.
students should describe the following: why private markets fail to provide public goods; some of the important public goods in our economy; why the cost–benefit analysis of public goods is both necessary and difficult; why people tend to use common resources too much; some of the important common resources in our economy.
students should describe the following: why some markets have only one seller; how a monopoly determines the quantity to produce and the price to charge; how the monopoly’s decisions affect economic well-being; why monopolies try to charge different prices to different customers; the various public policies aimed at solving the problem of monopoly.

Course Contents

Introduction of the course
Interdependence and the Gains from Trade
The Market Forces of Supply and Demand
Elasticity and its Application
Supply, Demand and Government Policies
Consumers, Producers and the Efficiency of Markets
The Theory of Consumer Choice
The Costs of the Production
Firms in Competitive Markets
Monopoly
Monopolistic Competition / Oligopoly
Oligopoly
The Markets for the Factors of Production
Externalities / Public Goods and Common Resources
Measuring a Nation’s Income
Measuring the Cost of Living
Production and Growth
Saving, Investment, and the Financial System
The basic tools of Finance
Unemployment
The Monetary System
Money Growth and Inflation
Aggregate Demand and Aggregate Supply
The Influence of Monetary and Fiscal Policy on Aggregate Demand
The Short-Run Tradeoff Between Inflation and Unemployment
Open-Economy Macroeconomics: Basic Concepts
A Macroeconomic Theory of the Open Economy
Q&A session

Assessment Elements

Assignments - Group work
Assignments - Quizzes
Midterm test
Attendance and Participation
Final Exam
Platforms: Zoom, Socrative и Gradescope (in the 2 module)
Assignments - Group Work
Assignments - Quizzes
Attendance and Participation
Midterm test
Final Exam
This is a written exam. The exam is held on the Socrative platform (https://b.socrative.com/login/student/). Students have to join the exam 15 minutes before the start. For participating in the exam the student is obliged to turn on the camera. During the exam students are forbidden to: correspond in the messenger, use the Internet. During the exam students are allowed to: use notes and textbooks. A short-term communication disruption during the exam is considered a communication disruption of less than 3 minutes. Long-term communication disruption during the exam is considered a communication disruption for more than 10 minutes. In the case of a long-term communication disruption the student cannot continue the exam. The make-up procedure is similar to the exam procedure.

Interim Assessment

2021/2022 2nd module
0.1 * Assignments - Quizzes + 0.11 * Attendance and Participation + 0.29 * Midterm test + 0.1 * Assignments - Group work + 0.4 * Final Exam
2021/2022 4th module
0.4 * Final Exam + 0.1 * Assignments - Group work + 0.29 * Midterm test + 0.11 * Attendance and Participation + 0.1 * Assignments - Quizzes

Bibliography

Recommended Core Bibliography

Principles of economics, Case, K. E., 2016

Recommended Additional Bibliography

Acemoglu, D., Laibson, D. I., & List, J. A. (2016). Economics, Global Edition (Vol. Global edition). Boston: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=nlebk&AN=1419560

Authors

DESYATNIKOV IVAN -

Course Syllabus