Bachelor
2022/2023
Economic Theory
Category 'Best Course for New Knowledge and Skills'
Type:
Compulsory course (International Bachelor's Programme in World Politics)
Area of studies:
International Relations
Delivered by:
Faculty of World Economy and International Affairs
When:
1 year, 4 module
Mode of studies:
offline
Open to:
students of one campus
Language:
English
ECTS credits:
4
Contact hours:
54
Course Syllabus
Abstract
Economic theory is a one-module undergraduate course, which combines a brief introduction to the standard methodology of economics with an overview of the essential models of mainstream micro- and macroeconomics. It’s intended to give students an overview of the economic models that describe the behavior and interaction of individual consumers and firms, formation of prices in various market structures, and the real-life problems of economic inefficiency caused by market failures as well as macroeconomic issues of aggregate product and national income determination, unemployment, inflation, economic growth and the main instruments and consequences of fiscal and monetary policy.
Learning Objectives
- The course is meant to familiarize the students with the essential toolkit of economic analysis instruments and teach them to apply these for answering specific questions about peoples', firms' or governments' decisions about resource allocation.
Expected Learning Outcomes
- analyse inflation expectations
- analyse total, average and marginal cost, in the short run and long run
- carry out comparative static analysis of a competitive industry
- Compute material and opportunity cost and use them to identify absolute and comparative advantage
- define aggregate demand and graph the AD schedule
- define aggregate supply in the classical model
- define narrow and broad money
- define perfect competition
- define pure monopoly and find the optimal price and output levels for a monopolist
- demonstrate how profits and losses lead to entry and exit
- derive the IS curve and the LM curve
- describe and identify diminishing marginal returns and the type of returns to scale
- describe and illustrate the free rider problem
- describe game theory and strategic behaviour
- describe how a firm choses output, in the short-run and the long-run
- describe how price discrimination affects a monopolist’s output and profits.
- Describe how the demand and supply curves summarize the behavior of buyers and sellers in the market.
- describe the central bank’s role in influencing the money supply and in financial regulation
- describe the nature of macroeconomics as the study of the whole economy
- describe the production function
- describe the relationship between revenue, cost and profit
- describe why a perfectly competitive firm equates marginal cost and price
- Determine equilibrium output with exports and imports
- discuss how money demand depends on output, prices and interest rates
- discuss internally consistent national accounts; why measuring GDP by income, by expenditure or by output produces the same result
- discuss the effects of short-run and permanent demand and supply shocks
- discuss the possible determinants of economic growth
- discuss the stylized facts of growth
- distinguish between economic and accounting definitions of cost
- Distinguish between micro- and macroeconomics, positive and normative economics
- Enumerate the factors that can shift market demand/supply curve
- Explain and apply the concepts of scarcity, opportunity cost and sunk cost
- Explain and apply the cost-benefit principle
- explain and illustrate the Paradox of thrift
- explain how banks create money
- Explain how wages and unemployment are determined in the aggregate labor market
- Explain the concepts of producer and consumer surplus; illustrate PS and CS in market equlibrium.
- Explain the determinants of imports and exports.
- Explain the nature of current and capital account
- explain the Philips curve
- Explain the purpose of economic modelling
- find the profit maximising level of output, given the price of output and inputs
- identify equilibrium in monopolistic competition
- identify the impact of fiscal and monetary policy on equilibrium output and interest rate
- identify the problem of externalities and possible solutions
- Iluustrate and quantify the effects of government regulation on equilibrium price, quantity, CS, PS and social welfare
- List the types and causes of unemployment.
- recognise and understand the identity Y ≡ C + I + G + NX
- recognise how output compares under monopoly and perfect competition
- recognise imperfect competition, oligopoly and monopolistic competition
- Solve the firm's short- and long-run cost minimization problems
- use the IS–LM–BP framework to analyse changes in monetary and fiscal policy under fixed and floating exchange rate regimes.
- Use the production possibility frontier to illustrate opportunity cost and comparative advantage
Course Contents
- Introduction to economics.
- Comparative advantage and exchange.
- Introducing the competitive market model.
- Effects of government regulation in competitive markets.
- Technology. Inputs and outputs.
- Profit maximization.
- Cost minimization.
- Firm and industry supply.
- Perfect competition.
- Monopoly.
- Monopolistic competition and oligopoly.
- Externalities and public goods.
- Introducing macroeconomics.
- Short-run: the goods market.
- Short run: the money market.
- The IS-LM model.
- Introducing the open economy.
- Goods market equilibrium in an open economy.
- Output, interest rate and exchange rate.
- The labour market.
- Aggregate demand and aggregate supply.
- Unemployment and inflation: NAIRU and the Phillips curve.
- The facts of economic growth.
Assessment Elements
- In-class quizzesThe final grade for this part is the average for all quizzes. There will be no make-ups for missed quizzes - but, if a quiz has been missed for an objective, documentally verified reason registered with the study office, its weight in the final grade will be transferred to other quizzes this student has written.
- Final examThe exam is a written assignment, consisting of two free response problems (one concerning the microeconomic part of the course and another - the macroeconomic part). Upon completing the assignment, the student must discuss the written assignment and his answers to it with the examiners, answering any questions they might have.
- Home assignmentThe home assignment consists of two short questions and two longer questions; half of the questions concerning the microeconomic part of the course and another - the macroeconomic part. The home assignment is typically issued two or three weeks before the end of the course.
Interim Assessment
- 2022/2023 4th moduleФормула оценивания: In-class quizzes * 0.4 + Home assignment * 0.3 + Final exam * 0.3
Bibliography
Recommended Core Bibliography
- Blanchard, O., Amighini, A., & Giavazzi, F. (2017). Macroeconomics (Vol. Third edition). New York: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1535899
- Microeconomics, Pindyck, R. S., 2018
Recommended Additional Bibliography
- Principles of microeconomics, Frank, R. H., 2009
- Stiglitz, J. E. (2016). Principles of Economics (Vol. Second edition). Milton, Qld: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1650548