Principles of Economics

Universidad Carlos III de Madrid

Course Description

  • Course Name

    Principles of Economics

  • Host University

    Universidad Carlos III de Madrid

  • Location

    Madrid, Spain

  • Area of Study

    Business Administration, Economics, Mathematics

  • Language Level

    Taught In English

  • Prerequisites

    Elementary calculus: percentages, rule of three and basic simplifications of quotients (also sums, substractions, multiplications and quotients).
    Solution of linear equations with one unknown.
    Solution of two linear equations with two unknowns (by substitution).
    Plot of linear equations in 2D graphs. Relationship with solutions to two linear equations with two unknowns.
    Graphic interpretation of the slope of a line.
    Computing elementary areas (triangles and rectangles).

  • Course Level Recommendations


    ISA offers course level recommendations in an effort to facilitate the determination of course levels by credential evaluators.We advice each institution to have their own credentials evaluator make the final decision regrading course levels.

    Hours & Credits

  • ECTS Credits

  • Recommended U.S. Semester Credits
  • Recommended U.S. Quarter Units
  • Overview

    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
    2. Interaction of economic agents (market, supply, demand, equilibrium).
    3. Assestement of economic outcomes (social optimum, Pareto criteria, market failure --externalities, public goods).

    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.

    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:

    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.

    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.

    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.

    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.

    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

    - 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.

Course Disclaimer

Please note that there are no beginning level Spanish courses offered in this program.

Courses and course hours of instruction are subject to change.

Eligibility for courses may be subject to a placement exam and/or pre-requisites.

Credits earned vary according to the policies of the students' home institutions. According to ISA policy and possible visa requirements, students must maintain full-time enrollment status, as determined by their home institutions, for the duration of the program.

ECTS (European Credit Transfer and Accumulation System) credits are converted to semester credits/quarter units differently among U.S. universities. Students should confirm the conversion scale used at their home university when determining credit transfer.

Please reference fall and spring course lists as not all courses are taught during both semesters.

Availability of courses is based on enrollment numbers. All students should seek pre-approval for alternate courses in the event of last minute class cancellations

Please note that some courses with locals have recommended prerequisite courses. It is the student's responsibility to consult any recommended prerequisites prior to enrolling in their course.


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