Principles of Economics

COMPETENCES AND SKILLS THAT WILL BE ACQUIRED AND LEARNING RESULTS.
Competences:
This course aims to familiarise students with the economic methof of analysis and its applications to decision
making and work. This requires the understanding of the following key concepts:

1. Feasible choices (budget set, technology, opportunity cost) and decision making (preferences, profit
maximisation).
2. Interaction of economic agents (market, supply, demand, equilibrium).
3. Assestement of economic outcomes (social optimum, Pareto criteria, market failure --externalities, public goods).

Skills:
1. Handling statistical data base and documental data.
2. Solving problems of social welfare and regulation.
3. Individual problem solving and ability to share and discuss the results wiith other students.
4. Oral and written communication skills.

DESCRIPTION OF CONTENTS: PROGRAMME
This course is an introduction to the principles of economic analysis. A set of basic concepts of Economic Theory are introduced, and the students are initiated into the methodology of economic analysis. The final aim is that this methodology becomes a useful tool that students can apply in their future professional career. For this purpose, the key general topics in the areas of microeconomics and macroeconomics will be discussed at an introductory level.

List of contents:

I. INTRODUCTION:
The basic economic problem: limited resources and pure exchange.
Microeconomics and Macroeconomics.
Normative and positive economics.
Opportunity cost and comparative advantages. Exercise: opportunity cost and exchange. Questions about concepts seen in class.

II. MICROECONOMICS:
The demand function. Marginal utility and individual demand. Aggregate demand. Movements and shifts.
The supply curve. Marginal cost and individual supply. Aggregate supply. Movements and shifts. Elasticity of demand and supply.
The market equilibrium. Market efficiency and market equity: consumer surplus and producer surplus.
Market intervention and its effects on welfare: price controls, quantity controls, taxes, subsidies.
Market failure I: Imperfect competition (monopoly, oligopoly, monopolistic competition)Asymmetric information: moral hazard and adverse selection.
Market failure II: externalities and public goods.

III. MACROECONOMICS:
The Global Economy and the principal Macroeconomics Indicators.
Measuring a nation's income: GDP, national accounts and financial accounts
Public Sector, Fiscal Policy and Unemployment
Monetary Macroeconomics I: Money and prices. Measuring the cost of life.
Monetary Macroeconomics II: Monetary Policy
Open Economy I: The Balance of Payments.
Open Economy II: Exchange rates and foreign exchange policy.

LEARNING ACTIVITIES AND METHODOLOGY
Acquisition of theoretical knowledge (2 ECTS) through master classes and individual student work. Related to the knowledge in the section competences and skills.
Acquisition of abilities and skills (4 ECTS) trhough problems solving, practical exercises and discussion. Related to skills in the section competences and skills.

ASSESSMENT SYSTEM
The grading will be based on evaluation along the course (40%) together with a final exam (60%). The former is based on a combination of problem resolution, multiple choice questions and essays. The final exam is a standard exam, possibly with multiple choice questions, exercises and essays.

% end-of-term-examination: 60
% of continuous assessment (assigments, laboratory, practicals?): 40

BASIC BIBLIOGRAPHY
- Paul krugman, Robin Wells y Kathryn Graddy: Fundamentos de Economía,, Reverté, 2ª Edición, 2012
- Mankiw, N. Gregory Principios de Economía, Thomson Paraninfo, 6ª edición, Madrid, 2010
- Díaz-Giménez, Javier Macroeconomía. Primeros conceptos., Antoni Bosh Editor., Barcelona, 1999.