For announcements and home assignments, please check the course site on Campus Virtual:

→ Campus Virtual

The course starts on the 13th of September and ends on the 20th of December. The classes are on

  • Tuesday 8am to 10am
  • Thursday 8am to 10am

in room 2002 (2nd floor) 696 building.

The main textbooks are

  • G. N. Mankiw & M. P. Taylor (2014). Economics (3rd Edition). Cengage Learning Emea
  • P. Krugmann, R. Wells, & K. Graddy (2010) Essentials of Economics (2nd Edition). Worth Publishers

The lecture slides, problem sets and supplementary materials will be made available on Campus Virtual. Please read the introduction for information about the evaluation:

→ Introduction

I. Economic Activity

Outline:

  1. Economics as Social Science
  2. The Circular Flow Diagram
  3. The Production Possibility Frontier
  4. Economic Growth
  5. Gains from Trade

In this class we want to understand

  • some basic definitions.
  • the concept of the production function.
  • the circular flow diagram.
  • the concept of opportunity costs.
  • the concept of the production possibility frontier and how it is affected by growth.
  • the concept of comparative advantage and how individuals and countries gain from trade.

→ Slides
→ Exercise

II. Supply and Demand Elasticity

Outline:

  1. The Demand Function
  2. Individual and Market Demand
  3. The Supply Function
  4. Elasticities of Demand
  5. Elasticity of Supply
  6. Revenue

In this class we want to understand

  • the concept of the demand function, demand curve and demand schedule.
  • how shifts in demand affect the demand curve.
  • how individual demands aggregate to market demand.
  • the concept of the supply function, supply curve and supply schedule.
  • how shifts in supply affect the supply curve.
  • the concept of elasticity.
  • the different elasticities of demand and supply.
  • the relationship between the price elasticity of demand and revenue.

→ Slides
→ Exercise

III. Market Equilibrium

Outline:

  1. The Invisible Hand

  2. The Market Equilibrium
  3. Shifts in Supply and Demand
  4. Supply of Companies and Industries
  5. Consumer Surplus
  6. Producer Surplus
  7. Government Interventions

In this class we want to understand

  • who Adam Smith was.
  • what a market equilibrium is.
  • what surplus and shortage in the market mean.
  • how shifts in supply and demand affect the market equilibrium.
  • how companies and industries choose the quantity they supply.
  • what a consumer and a producer surplus are, and how they are affected by changes in the price.
  • what the effects of a price ceiling and a price floor are.
  • how taxation affects the market.
  • how the tax burden is distributed.
  • what deadweight loss is.

→ Slides
→ Exercise

IV. Macroeconomic Magnitudes

Outline:

  1. Macroeconomics
  2. Gross Domestic Product
  3. Measuring GDP
  4. From GDP to Disposable Income
  5. Saving and Investment

In this class we want to understand

  • what the origins of macroeconomics are.
  • what GDP is, what it measures and what it not measures.
  • the difference between real and nominal GDP.
  • what economic growth in terms of GDP is.
  • how to measure GDP.
  • how GDP relates to the national income.
  • how consumption, investment and government spending contribute to the GDP.
  • how the market for loanable funds work and which effects changes in the budget balance of the government have.

→ Slides
→ Exercise

V. The 45 Degree Model

Outline:

  1. The Paradox of Thrift

  2. The 45 Degree Model

  3. Dynamics in the Model

  4. The Multiplier Effect

In this class we want to understand

  • what the paradox of thrift is.
  • what the main idea of Keynesian economics is.
  • what the 45 degree model is.
  • how consumption & savings aggregate in the 45 degree model.
  • what the closed and the open economy are.
  • how to derive an equilibrium in the 45 degree model.
  • how the dynamics in the 45 degree model work.
  • what the multiplier effect is.
  • how to derive the multiplier.

→ Slides
→ Exercise

VI. Inflation, Unemployment and the Public Sector

Outline:

  1. Economic Growth & the Business Cycle
  2. Unemployment
  3. Money & Inflation
  4. The Public Sector
  5. Economic Inequality

In this class we want to understand

  • what the difference is between economic growth and economic development.
  • what a-cyclical policies are.
  • how labour force and unemployment are defined.
  • what money is.
  • what the monetary multiplier is.
  • what inflation is, what it causes and what its effects are.
  • what the role of the public sector in a market economy is.
  • how to measure economic inequality.

→ Slides
→ Exercise

VII. International Economics

Outline:

  1. International Econmics
  2. Balance of Payments
  3. Foreign Exchange Market
  4. Real Exchange Rate
  5. Exchange Rate Systems

In this class we want to understand

  • what international economics is.
  • what the balance of payments is.
  • what the nominal exchange rate is.
  • how economic activity affects the foreign exchange market.
  • what the real exchange rate is.
  • what purchasing power parity is.
  • what the differences between a fixed and a flexible exchange rate regime is.

→ Slides
→ Exercise