Economics

The course is offered to first year Bachelor students and aims to familiarize them with the basic topics in microeconomics and macroeconomics, as well as to develop the ability to analyze contemporary economic problems. Students will gain knowledge about the functioning of the market and its participants, as well as discuss topics related to the role of the state in the economy, the labor market, the problem of inequality, the financial system and international cooperation.

The course includes a theoretical part and group exercises based on tasks assigned during the meetings.

Block 1

Introduction to economics: Definition of economics, economic problem, scarcity of resources and necessity of choice, basic principles of economics.

Block 2.

Division of economics into micro and macro. Economist tool kit.

Main economic theories.

Block 3

Economic models. Demand, supply and market: What is the market? Types of markets.

Block 4.

Demand and its size. Demand reactions to changes in prices and income.

Block 5.

Supply and its size. Market equilibrium.

Block 6.

Elasticity and its applications.

Block 7.

Market demand and consumer choice theory: A standard economic model. Budget constraint. Change in income. Price change.

Block 8.

Preferences. Utility.

Market supply and enterprises in competitive markets:

Block 9.

Production costs. Production function. Maximizing profit.

Block 10.

Consumers, producers and the efficiency of markets.

Block 11.

Firm behavior and market structures: Monopoly - regulation and deregulation. Monopolistic competition. Oligopoly.

Block 12.

The economics of the public sector: the tax system and taxation costs. Supply, demand and state policy.

Block 13.

Public goods, common resources and merit goods. Externalities and market failure. Information and behavioral economics.

Block 14.

Labor economics. Income inequality and poverty.

Block 15.

Measuring a nation’s well-being and the cost of living: Components of gross domestic product (GDP). Real versus nominal GDP. The limitations of gross domestic product as a measure of well-being. The Consumer Price Index.

Block 16.

Production, growth, and unemployment: Growth theory. Catch-up effect. Determinants of productivity. Identifying unemployment. Natural rate of unemployment.

Block 17.

Saving, investment and the financial system: Saving and investment in the national income accounts. Financial institutions in the economy. Measuring the time value of money.

Block 17.

Money and prices in the long run: The monetary system. The role of central banks. The European Central Bank and the Eurosystem. Banks and the money supply.

Block 18.

Money growth and inflation. The costs of inflation. Deflation.

Block 19.

Short-run economic fluctuations: Business cycles. The influence of monetary and fiscal policy on aggregate demand. The short-run trade-off between inflation and unemployment. Phillips’ curve.

Block 20.

Open economy: The gains from trade. The international flows of goods and capital. Real and nominal exchange rates. Purchasing power parity.

Block 21.

International macroeconomics: Common currency areas and European monetary union.

Block 22.

The financial crisis and sovereign debt.

Obligatory reading:

Economics, 4th Edition, N. Gregory Mankiw, Mark P. Taylor.

Further reading:

Economics 11th Edition, David Begg Gianluigi Vernasca Stanley Fischer Rudiger Dornbusch.

Economics: A complete introduction, Coskeran T., 2019.

knowledge: knows the basic issues and definitions in the field of microeconomics and macroeconomics; understands the most important mechanisms of the entire economy as well as individual market participants; is aware of major challenges of the modern world economy

skills: has the ability to carry out the analysis of a selected problem with the use of economics tools; has the ability to use economic models when analyzing economic processes

competences: possesses an enhanced competence of critical and analytical thinking, as well as data searching and analysis (interpreting charts and models), what can be useful both for economic and other news interpretation; possesses developed ability to team work and perform joint analysis of economic and other problems

K_W01, K_W02, K_W03, K_W05, K_W06, K_U01, K_U04, K_K01

Completion of the course is based on the final exam grade.

Persons that regularly participate in lectures and actively take part in workshop activities may have their final grade increased by 0.5