Download ECON1000: Principles of Economics

ECON1000: Principles of Economics
September 2016
Department of Economics
UNIVERSITY OF THE WEST INDIES, MONA
Lecturers:
Claremont Kirton E209 McIntyre; Marc-Anthony Beverley: Rm15 Main Social Science Block.
Pre–requisites: CXC mathematics (grade II) or ECON0001.
Office Hours: Kirton: Tue 9-11, Thu 9-11; Beverley. Wed 1-3, Thu 11-1.
Description
This course introduces you to the basic principles of economics. It assumes no previous exposure to
economics. All you need is curiosity and a willingness to read. During the term, we will discuss the basic
ideas underlying the economic way of thinking and apply it a range of phenomena both within and outside
of the areas of traditional economic analysis. The objective is that, by the end of the course, you will be
able to approach a problem in the way that an economist would. Along the way, we introduce some of the
basic tools of economic analysis.
Learning Objectives
Upon successful completion of this course, a student should be able to...
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Describe the core ideas that economists use in understanding the world.
Explain how a market economy functions.
Analyse economic events, both at the level of individual markets and that of the economy as a whole—
using the main tools of economics— optimization and markets.
Describe both the advantages of markets and the meaning of and circumstances under which markets fail.
Apply welfare analysis to determining the value of market interventions.
Explain the causes of changes in inflation, interest rates, the exchange rate, and the aggregate level of output.
Explain why some countries are wealthier than others and identify the factors that are holding some countries
back.
Construct measures of changes in economic activity and in the price level.
Assessment and Delivery
The final grade is determined from in -course quizzes (50%), tutorial participation (10%), and a
comprehensive final examination (40%).
The course syllabus is delivered in two lecture hours and one tutorial hour per week. Problem sets will
be provided for practice at problem solving. You are to attempt answers to the problem sets before you
attend your tutorial.
Resources
The home page for the course is at:llttp://ourvle.mona.uwi.edu/course/view.php?id=s63.
The material is drawn largely from the following sources.
• N. Gregory Mankiw, Principles of Economics(any edition), South -Western, United States.
• Robert Stonebraker, The Joy of Economics: Making Sense Out of Life,
http://faculty.winthrop.edu/stonebrakerr/book/contents.htm
• Steven E. Landsburg, The Armchair Economist: Economics and Everyday Life, The Free Press, New York, 1993
and (revised) 2012.
• Tim Harford,The Logic of Life, Random House, New York, 2008.
• Tim Harford,The Undercover Economist,Oxford University Press, Oxford, 2006.
Syllabus
I: The Basics
II: The Toolbox
III: The Economy
1. The Core Principles
2. Scarcity and Choice
6 . Finance:
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Incentives
Scarcity
Real Values
• The Feasible Set
• The Gains from Trade
• Optimization
Loan s
• Savings and Investment
• Role of the Financial System
• Financial Institutions and
Markets
• The Market for Funds
Prices
Returns
Exchange
3. The Market Model
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Demand
Supply
The Market
Special Cases
Welfare
4 . Interfering
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External Linkages: the
Market for Foreign Exchange
• Nominal and Real Exchange
Rates
• Exchange Rates in the Short
Run
• Purchasing Power Parity
in the Market
• Taxation
• Price Restrictions
• Quantity Restrictions
the Market for
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Inflation: the Market for
Money
5 . Market Failures
• Externalities
• Public Goods
• Asymmetric Information
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What is Inflation?
The Market for Money
The Source of Inflation
What's Wrong with Inflation
9 . Economic
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Growth
Growth Factors
Production Function
Depreciation
Solow Growth Model
10 . Economic Statistics
• GDP: Measuring Production
• CPI: Measuring Inflation