Students are introduced to the course information and course requirements.
Study goals: Understand and describe the basic mechanism of the economy and the discipline of economics. Understand the concept of scarcity and opportunity cost. Discuss the major branches of economics: positive, normative, microeconomics, macroeconomics. Distinguish between goods and services, rare and free goods, inputs and outputs.
Students should be able to: - Discuss the purposes and functions of markets. - Explain how a demand curve illustrates the law of demand and distinguish between a change in demand and a change in quantity demanded. - Explain how a supply curve illustrates the law of supply and distinguish between a change in supply and a change in quantity supplied. - Locate the equilibrium point on a supply and demand diagram. - Explain the consequences of shortages and surpluses in markets and how they are eliminated in free competitive markets.
Students should be able to: Understand the terms rational, preferences, utility, budget. Discuss the difference between cardinal and ordinal approach to utility. Explain the difference between total and marginal utility. Describe the conditions for consumer equilibrium. Analyse the impact of price change and income change on consumer choice.
Students should be able to: Understand how individual demand (and market demand) is derived from consumer equilibrium. Distinguish the shapes of PCC based on the preferences. Calculate and interpret the values of price elasticity of demand. Understand how price elasticity impacts the total revenues. Calculate and interpret the values of income elasticity of demand. Calculate and interpret the values of cross elasticity of demand.
Students should be able to: Understand the terms, production, input, output. Distinguish between total, average and marginal product. Analyse production relationship and show how the law of diminishing marginal returns implies a certain pattern of output in the short run. Understand the difference between production in the short-run and the long-run. Understand how firm‘s cost optimum is formed.
Study goals: using a simulation and a gamification students represent the firm and will make production decisions, price decisions in their business, calculating their costs, revenues and profits based on their decisions in each round.
Students should be able to: Distinguish accounting, economic and normal profit. Distinguish between explicit and implicit costs. Distinguish the types of costs in short-run and long-run. Distinguish the development of different types of revenues for perfectly and imperfectly competitive firms.
Students should be able to: Explain the characteristics of TR, MR, AR and individual demand of a perfectly competitive firm. Explain the golden rule of profit maximalisation. Determine whether a firm generates loss, profit or zero profit in short-run. Determine whether a firm should continue its production or shutdown the production in short-run. Explain how market supply curve is derived. Explain why perfectly competitive firms gain zero long-term profit.
Students should be able to: Explain the characteristics of TR, MR, AR and individual demand of an imperfectly competitive firm. Differentiate between monopoly, oligopoly and monopolistic competition. Explain why is monopoly inefficient and the ways how to regulate it. Name the types and examples of oligopoly. Understand how imperfectly competitive firms decide on their output and the price of production.
Students should be able to: Describe the land market. Understand the difference between perfectly and imperfectly competitive markets for inputs (labor). Explain the hiring decision and relating terms such as marginal factor cost and marginal revenue product. Explain why is individual labor supply curve backwardly sloped. Explain what is monopsony and bilateral monopoly. Explain what is the effect of minimum wages in the labor market.
Students should be able to: Define capital, interest income and interest rate. Understand what causes the differences in interest rates across different types of loans. Understand the difference between short-run and long-run capital market. Explain and evaluate the capital returns. Explain time-value of money, present and future value.
Students should be able to: Understand different types and causes of market failures. Understand how government might intervene to lessen the impacts of market failures. Be familiar with the real world examples of different market failures.