Consultancy Services Module outline 1.Introduction to Economics 2.Market forces 3.Elasticity of demand 4.Theory of Consumer Behavior

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1 MIDLANDS STATE UNIVERSITY FACULTY OF SCIENCE AND TECHNOLOGY DEPARTMENT OF COMPUTER SCIENCE AND INFORMATION SYSTEMS MODULE :HCS 112 FUNDAMENTALS OF ECONOMICS LECTURER :MUSUNGWINI S OFFICE 10 CONTACT DETAILS : musungwinis@msu.ac.zw, musungwinis5@gmail.com , , Skype Id: musungwini2012 Module Description This is a course designed to familiarize students with the basic concepts in Microeconomics. It mainly deals with topics such as basic principles of economics, supply and demand, consumers and producers, the efficiency of markets, externalities, public goods and common resources, the costs of production, monopoly and oligopoly, earnings and discrimination, income inequality and poverty, the theory of consumer choice, and frontiers of Microeconomics. Learning objectives After completion of this course students should be able Identify the differences between price theory (microeconomics) & macroeconomics; Identify the determinants of supply & demand, & use these tools to illustrate changes in price and output; Understand price elasticity of demand &supply, & understand the relation between price elasticity of demand & total revenue; Understand the behavior of a firm in regard to output, price, cost, & profit; Demonstrate welfare effects of different market structures; Describe how comparative advantage & specialization lead to gains from trade. Be able to solve and manipulate a variety of simple diagrammatic and algebraic models in micro- and macroeconomics Be able to identify the applications of, limitations to, and improvements in the models learned Explain how markets work Analyze markets and welfare Explore firm behavior and the organization of industry Assessment methodology All activities held during the trimester will be evaluated and the final grade will be based on the following modes of assessments and their relative weight age in points. Assessment Mode Number Mark Weight Marks Assignments Presentations Inclasses Coursework 30 End term Total 100

2 Consultancy Services During the semester, students are welcome to discuss the problems related to the course. They can consult me after the class time. Module outline 1.Introduction to Economics Scarcity Problem, Making Choices The economic Person: Rationality Assumption Why study economics Positive Versus Normative Economics The Production Possibility Curve 2.Market forces Demand Schedule Law of Demand Shift in Demand Change in Demand Factors Affecting Demand Supply Function Law of Supply Determinants of Supply Changes in Supply Market Equilibrium 3.Elasticity of demand Price Elasticity of Demand Point Elasticity of Demand Price Elasticity and Total Revenue Determinants of Price Elasticity of Demand Application of Elasticity of Demand Price Elasticity of Supply Income Elasticity of Demand Cross Elasticity of demand 4.Theory of Consumer Behavior Cardinal Approach/Utility Analysis Marginal Utility Law of Diminishing Marginal Utility Indifference Curve Features of Indifference Curve Budget Line Consumer Equilibrium 5.The Theory of Firm A The Costs of Production Total Revenue, total cost and profit Economic profit versus accounting profit Opportunity Cost The Production Function Total, and marginal product Diminishing Marginal Products 6.The Theory of Firm B The Short-Run Costs of Production Total Costs

3 Average Costs Marginal Costs The relationship between Average Cost and Marginal Cost Long-run Production Costs 7.Market Structures a.perfect Competition Profit Maximization in the Short-run and long-run Supply Curve of the Firm b.monopoly Why Monopolies Arise Monopoly Resources Government Created Monopolies Natural Monopolies Monopoly versus Competition A Monopoly s Revenue Profit Maximization A Monopoly s Profit c.oligopoly The Equilibrium for an Oligopoly How the Size of an Oligopoly Affects the Market Outcome Game Theory and the Economics of Cooperation Oligopolies as a Prisoners Dilemma Other Examples of the Prisoners Dilemma The Prisoners Dilemma and the Welfare of Society Why People Sometimes Cooperate d.monopolistic Competition Competition with Differentiated Products The Monopolistically Competitive Firm in the Short Run The Long Run Equilibrium Monopolistic versus Perfect Competition Advertising Brand Names 8.Market Failure and the Role of Government a.externalities and Market Efficiency Negative Externalities Positive Externalities Technology Spillovers, Industrial Policy, and Patent Protection b.private Solutions to Externalities The Types of Private Solutions The Coase Theorem Why Private Solutions Do Not Always Work c.public Policies toward Externalities Command and Control Policies: Regulation Market Based Policy 1: Corrective Taxes and Subsidies Market Based Poliicy 2: Tradeable Pollution Permits Objections to the Economic Analysis of Pollution d. Public Goods and Common Resources Public Goods The Free Rider Problem Some Important Public Goods

4 The Difficult Job of Cost-Benefit Analysis Common Resources The Tragedy of the Commons Some Important Common Resources Conclusion: The Importance of Property Rights 9. Money and the Banking System The Monetary System The Meaning of Money The Functions of Money; The Kinds of Money The Reserve Banking System Banks and the Money Supply The Simple case of 100-Percent Reserve Banking Money Creation with Fractional Reserve Banking The Money Multiplier The Central Bank s Tools of Monetary Control Problems in Controlling the Money Supply: 10.Unemployment and Inflation Measurement of unemployment Types of unemployment Inflation Meaning and measurement of inflation Types of inflation Redistribution Effect of Inflation Recommended Text Books Economics 18 th 2009 McConnell, Brue, Fly Economics, McConnell Campbell R. Price Theory, Friedman, Milton The Theory of Price Stigler, George Economics 19th / 2010 Samuelson/Nordhaus Additional Readings: Principles of Microeconomics by Mankiw N.G. (2002) Nelson Publisher Economics Today by Roger Leroy Miller (1998), Addison Wesley Magazines/ Journals: The Economist Weekly magazine. Gulf and Economist Magazine PROFESSIONAL CODE OF CHARACTER University coursework prepares students for the workplace. Therefore, the following Professional Code of Character is expected from all students: 1. Integrity is a valued character trait. People with integrity have firm footing, but those who follow crooked paths will slip and fall. (Proverbs 10:9) Students will: a. Be righteously trustworthy. This includes refraining from plagiarism, cheating, or aiding another student in such. For additional information about consequences of unethical behavior students should refer to the Midlands State University Student Handbook.

5 b. Be Christ followers who keep each other accountable, as well as extend grace and encouragement. c. Do work as unto the Lord. Student work is to be representative of their best effort, complete, and on time. d. Be mindful that when we stumble we admit to it, repent, and seek restoration and forgiveness. 2. Respectfulness is a valued character trait of the Lord, to each other, of yourself, to your Lecturer, and to staff and administrators. Show proper respect to everyone; Love the brotherhood of believers, fear God, honor the king. (1 Peter 2:17) Students will: a. Be on time to class or turning in assignments. b. Turn off and put away cell phones while in class, performing an assignment, or taking an exam. c. Use laptops in the classroom only as permitted by the Lecturer for appropriate coursework.. 3. Responsibility is a valued character trait. Make a tree good and its fruit will be good, or make a tree bad and its fruit will be bad, for a tree is recognized by its fruit. (Matt. 12:33) Learning is a partnership. Students are expected to take responsibility to prepare for class, which includes reading and studying the text materials, engaging in classroom discussions, and completing all homework assignments with their best effort. I know the plans I have for you says the Lord, plans for good and not for evil, to give you a future and a hope. Jeremiah 29:11 What about academic dishonesty? Academic dishonesty, in any form, is expressly prohibited by the rules of the Midlands State University. Academic dishonesty incorporates the following: a. Cheating which is defined as the giving or taking of any information or material with the intent of wrongfully aiding oneself or another in academic work considered in the determination of a course grade. b. Plagiarism which is defined as the act of stealing or passing off as one s own work the words, ideas, or conclusions of another as if the work submitted were the product of ones own thinking rather than an idea or product derived from another source. c. Any other form of inappropriate behavior which may include but is not limited to: falsifying records or data; lying; unauthorized copying, tampering, abusing or otherwise unethically using a computer or other stored information; and, any other act of misconduct which may reasonably be deemed to be a part of this heading. Any student alleged to have committed any act of academic dishonesty as defined herein, shall be entitled to due process as defined in Midlands State University rules and regulations, prior to the administration of disciplinary action, including suspension and dismissal.