INTRODUCTION TO ECONOMICS

The purpose of the course is to illustrate the way in which economists view, think, and analyse the world. The course provides an introduction to a broad range of economic concepts, theories and analytical techniques. It considers both Microeconomics—the analysis of choices made by individual decision-making units (households and firms), and Macroeconomics—the analysis of the economy as a whole. The use of the supply and demand model will be the fundamental setting in which trade-offs and choices will be considered through comparison of costs and benefits of actions.

On successful completion of this course, students will be able to:
1. Describe and explain how microeconomic models can be used to consider fundamental economic choices of households and firms.
2. Describe and explain how macroeconomic models can be used to analyse the economy as a whole.
3. Describe and explain how both the government policies and the market structure influence microeconomic choices and macroeconomic outcomes.
4. Interpret and use economic models to analyse economic situations.

Students are required to have excellent knowledge and training in secondary-school level mathematics:
1. Arithmetic: (a) Natural and real numbers, and fractions; (b) Computation and properties of the traditional operations on numbers—addition, subtraction, multiplication, division, exponentiation, and roots.
2. Elementary algebra: (a) Manipulation of variables as if they were numbers; (b) Simplification of algebraic expressions; (c) Properties of equalities and inequalities; (d) Resolution of systems of two linear equations with two unknowns; (e) Graphic representation of linear equations (of two variables) in the real plane.
3. Geometry: (a) Computation of length and area of traditional two-dimensional geometric figures—square, triangle, circumference; (b) Angles; (c) Congruency of geometric figures; (d) Pythagorean theorem.
4. Graphs analysis: Basic identification, visualization, and analysis of the relationships between entities in a graph.

PART 1: MICROECONOMICS
1. Competitive markets
1.1. Supply and demand
1.2. Elasticity
1.3. Competitive equilibrium
1.4. Welfare analysis: Consumer and producer surplus
2. Behind the demand curve
2.1. Preference and utility
2.2. Utility maximization
3. Behind the supply curve
3.1. Production and costs
3.2. Profit maximization
4. Imperfect competition
4.1. Monopoly
4.2. Oligopoly
5. Externalities
6. Public goods and common resources
7. Uncertainty, risk, and private information

PART 2: MACROECONOMICS
1. Macroeconomic aggregates and concepts
1.1. Measuring the national output and national income
1.2. Unemployment and inflation
2. Markets for goods
3. Financial markets
4. The IS-LM Model: Equilibrium in both the goods and money markets
5. Labor markets
6. Putting all markets together: The AS-AD Model.

1. Economics by Paul Krugman and Robin Wells. McMillan Publisher.
2. Principle of Economics by Karl E. Case, Ray C. Fair, and Sharon E. Oster. Pearson Publisher.
3. OpenStax Economics, Principles of Economics. OpenStax CNX. May 18, 2016. http://cnx.org/contents/69619d2b-68f0-44b0-b074-a9b2bf90b2c6@11.330

The first examination (1º appello/mid-June) will take the form of: (i) a comprehensive written exam; and (ii) a number of home assignments.
(i) The exam is a 90 minutes individual test covering the entire course topics. It is a closed-notes and closed-book test. The exam is worth 70% of the final grade. Failing to register to the exam is sufficient cause for denying admission.
(ii) The home assignments are given in the form of problem sets to be solved in groups. The final mark of home assignments is computed as the corresponding average grade. Home assignments are worth 30% of the final grade.
The final grade is thus computed as follows: 0.7*Grade written exam + 0.3*Grade home assignments.

The examination for the remaining sessions (2º appello - 4º appello) consists of a 90-minutes comprehensive written exam that accounts for 100% of the final mark. The grade from home assignments will NOT be considered for the computation of the final grade.

Teaching will be supported by lectures in the subjects of the course. The purpose of the lectures is to give an overview of the curriculum and to facilitate its understanding. The language of instruction will be English.
In addition, students have the opportunity to attend exercises lessons aimed at preparing the final written exam.

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