This module is designed to introduce and build an understanding of economics at the foundation level. The module covers basic but essential elements in microeconomics and macroeconomics. There is no assumption of any prior knowledge of economics or mathematics. Microeconomics includes supply and demand, consumer and producer problems, and the market structure. On the other hand, macroeconomics includes aggregate economy, short-run economics fluctuations, macroeconomic policies and the open economy.
- To introduce students to the main economic principles, theories and concepts at foundation level.
- To introduce students to the main conclusions derived from economic analysis and develop students' understanding of economic implications.
- To enable students to develop analytical skills using simple mathematics techniques and economic diagrams.
By the end of this module a student will be expected to be able to:
1. Define and discuss the main economic principles, theories and concepts at foundation level.
2. Use relevant economic diagrams to support arguments or complement with the analysis.
3. Solve economic questions mathematically and interpret the results.
4. Apply and use the main economic models to explain case studies and real life situations.
Autumn Term (Microeconomics)
1. Introduction: What Is Economics? First Principles; Economic Models; Using Models.
2. Supply and Demand: Construction of Demand and Supply Curves; Market Equilibrium; Price and Quantity Controls; Elasticity.
3. The Consumer: Preference; Budgets and Optimal Consumption; Indifference Curve; Consumer Surplus; Making Decisions;
4. The Producer: Inputs and Costs; Production Function; Perfect competition and the Supply Curve; Profit Maximisation; Competitive Market Equilibrium in the Short and Long Run.
5. Market Structure: Non-Perfect Competition, Monopoly; Monopoly Profit Maximization; Regulation of Monopoly; Monopolistic Competition; Oligopoly.
6. Externalities: Production, Consumption and Externalities. The Economics of Pollution; Policies towards Pollution.
Spring Term (Macroeconomics)
1. Macroeconomics: Circular Flow of Income; National income, Expenditure and Output.
2. Short Run Economic Fluctuations: Income and Expenditure; the Multipliers; Aggregate Supply and Aggregate Demand (AS-AD) Model.
3. Unemployment and Inflation: the Phillips Curve; Unemployment and Business Cycle; Wage and Price Adjustment; Inflation, Disinflation and Deflation.
4. Fiscal Policy: the Budget Balance; Fiscal Policy and the Multiplier; Long-run Implications of Fiscal policy.
5. Monetary Policy: Money and Banking; Determining the Money Supply; The Demand for Money; Money and Interest Rate; Monetary Policy and Aggregate Demand; Money, Output and Prices in the Long-run
6. The Open-Economy Macroeconomics, Capital Flows and Balance of Payments; The role of Exchange Rate; Exchange Rate Policy.
50% coursework and 50% exam
Pass mark: 40%
Coursework will consist of:
One in-class test in week 9 (30%). Feedback provided in week 12.
One in-class test in week 21 (30%). Feedback provided in week 24.
One individual 1,000 word essay (40%). Titles given out in week 20. Assignment handed in during week 23. Feedback provided in week 26.
Exam: 3:00 hour exam during Summer Examination period.
Every student is expected to take a diagnostic test in economics in week 2. This will enable the Module Leader to be aware of each student's background in economics.
In week 6, every student is also expected to take a quiz in economics to evaluate if students follow the lessons well and to identify if some may need extra support.
In week 10, an economics topic is given to students to write a short 250-300 essay. This will enable students to have an opportunity to learn how to produce a good piece of economics writing. Students must submit this work in week 11. Feedback provided in week 13.
Learning and Teaching Methods
The module will run for a period of 23 weeks. Students are expected to attend four hours of teaching per week.
Each week's instruction consists of a 2-hour lecture and two 1-hour classes.
Lecture: The two-hour lecture will explain the topics covered in the syllabus and will identify the key concepts and points for discussion.
Class: In each week, the first class aims to promote interaction among students, familiarise them with the usage of English economic terminology and also to identify any problems at the individual level. While the second class aims to provide the opportunity for students to discuss any problems relating to the module materials and will work together in small groups on a range of class exercises.
Summarised lecture material will be presented using PowerPoint and will be posted on Moodle. These lecture notes will include chapter references of the textbook. Class exercises will be distributed to students in advanced to reinforce the material covered in lectures. Students will also be given exam type questions/case studies to work on during the classes and encouraged to work in groups. Any problems that might arise during the classes will be addressed directly with the students. The classes will encourage debate on relevant topics as well as discuss solutions to past tests and past exam papers. Students with weaker background will be identified from the beginning of the autumn term and will be required to attend an additional 1-hour seminar in each week. The seminar aims to help students to follow the lessons better by practicing on more exercises to build up understanding in Economics.
Students can find all of this information on Moodle.
50 per cent Coursework Mark, 50 per cent Exam Mark
Exam Duration and Period
3:00 hour exam during Summer Examination period.
This module is compulsory for IA students who wish to study economics or a business degree at undergraduate level.
- Required textbook:
Krugman, P. and Wells, R., Economics, International Edition, 3rd edition, Palgrave Macmillan, 2013.
Suggested additional reading:
J. Sloman and A. Wride, Economics, 7th edition, Prentice Hall, 2009.
D. Begg, S. Fischer, G. Vernasca, and R. Dornbusch, Economics, 10th edition, McGraw-Hill, 2011.
M. McDowell, R. Thom, R. Frank and B. Bernanke, Principles of Economics, European Edition, McGraw Hill, 2006.