HONG KONG SHUE YAN COLLEGE Bachelor of Business Administration (Hons) Bachelor of Arts (Hons) in Journalism and Mass Communication

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1 HONG KONG SHUE YAN COLLEGE Bachelor of Business Administration (Hons) Bachelor of Arts (Hons) in Journalism and Mass Communication Course Title : Introduction to Economics Course Code : ECON 100 Year of Study : one or two Number of Credits : 3 Duration in Weeks : 15 Contact Hours Per Week Pre-requisite(s) : Lecture (2 Hours) / Tutorial (1 Hour) : Nil Course Aims: This course aims to provide a general study of economics. It presents economics not only as a mere body of knowledge but also a method enabling students to understand current national and international economic issues. Course objectives: Upon completion of this course, students should be able to: 1. acquire basic economic concepts and methods of studying economics; 2. understand the forces determining demand and supply; 3. understand theory of production and costs; 4. distinguish between the features of different market structures and their effects on producer behaviours; 5. identify the determinants of factor prices in resources markets; 6. calculate GDP by use of different approaches; 7. consider the forces governing the aggregate demand and supply; 8. calculate various expenditure multipliers; analyze the functions of fiscal policies and the effects of different fiscal policies on the economy; 9. explore different policy tools of controlling money supply by the central bank; 10. understand theory of exchange rate determination and the international monetary system. 1

2 Course outline: 1. Introductory concepts of economics and tools of economic analysis (1 week) 1.1. Basic economic concepts 1.2. Market mechanism 1.3. Positive and normative economics 1.4. Microeconomics and Macroeconomics 1.5. Economic models 1.6. Index numbers 1.7. Nominal and real variables 1.8. Data and graphical analysis 1.9. Criticisms of economics 2. Theory of demand and supply (1 week) 2.1. Demand and supply functions 2.2. Market equilibrium 2.3. Shifts in the demand and supply functions 2.4. Applications of demand and supply 2.5. Elasticities of demand and supply 3. Costs and production (1 week) 3.1. A firm s accounts 3.2. Profit maximization and output functions 3.3. Short-run and long-run cost functions 3.4. Short-run and long-run output decisions 4. Pure competition and pure monopoly (2 weeks) 4.1. Short-run and long-run supply decisions of a purely competitive firm 4.2. Industry supply curve in pure competition 4.3. Monopolist output decisions 4.4. Price discrimination under monopoly 5. Monopolistic competition and oligopoly (1 week) 5.1. Equilibrium in a monopolistically competitive market 5.2. Game theory and collusion 5.3. Price rigidity 5.4. Cartel 5.5. Dominant firm model 6. Factor markets (1 week) 6.1. Demand for and supply of labour 6.2. Transfer earnings and economic rent 6.3. Labour market equilibrium and disequilibrium 6.4. Demand for and supply of capital services 6.5. Equilibrium and adjustment in market for capital services 6.6. Equilibrium in market for land services. 2

3 7. Introduction to Macroeconomics (2 weeks) 7.1. National income accounting 7.2. Components of aggregate demand 7.3. Aggregate supply 7.4. Equilibrium outputs 7.5. The multiplier effects 8. Fiscal and Monetary Policy (4 weeks) 8.1. The government budget 8.2. Non-discretionary fiscal policy 8.3. Automatic stabilizers and discretionary fiscal policy 8.4. The national debt and the budget deficit 8.5. Money demand 8.6. The monetary base and the money multiplier 8.7. Targets and instruments of monetary policy 8.8. The policy mix 9. Open Economy (2 weeks) 9.1. Exchange rate determination 9.2. The balance of payments 9.3. Currency crisis and speculative attacks on pegged exchange rates 9.4. Exchange rate regimes and International monetary system Teaching Approach: Teaching is achieved by a combination of lectures and tutorials. While lectures are used to present the core material and conceptual aspects of the course, tutorials are designed to enable students to discuss and clarify difficulties arising from lectures, and to examine particular topics in more detail. Assessment: Continuous Assessment: Class participation 5% Coursework Essays 25% Term-test 20% Examination Final Examination (2 hours) 50% 100% 3

4 Resources: Principal Reading McConnell C. R. and Brue, S. L. (2004), Economics, 16 th edn., McGraw Hill. Supplementary Reading 1. Bromley, D. W. and Paavola, J. (2002), Economics, Ethics, and Environmental policy: Contested Choices, Blackwell. 2. Begg, D., Fischer, S. and Dornbusch, R., (2003), Economics, 7 th edn., McGraw-Hill. 3. Heyne, P. (2000), Economic Way of Thinking, 9 th edn., Prentice Hall. 4. Mankiw, N. G. (2004), Principles of Economics, 3 rd edn., Thomson Learning. 5. Guell, R. C. (2002), Issues in Economics Today, McGraw-Hill. 6. Samuelson, P. and Nordlaus, W. (2004), Economics, 18 th edn., McGraw Hill. 7. Stiglize, J. E. and Walsh, C. E. (2002), Economics, 3 rd edn., W.W. Norton. 8. Stiglize, J.E. (2003), Globalization and its Discontents, W.W.Norton

5 Schedule of Classes Course Title : Introduction to Economics Course Code : ECON 100 Semester : Fall, 2004 / Spring, 2005 Lecturers Week Class Topic : Joe Wong, Yuen Wai-Kei and Woo Kai-Yin 1 Introductory concepts and tools of economic analysis (Ch.1) 2 Demand and supply theory (Ch.3, 20) 3 Costs and production (Ch. 22) 4 Pure Competition (Ch. 23) 5 Pure Monopoly (Ch. 24) 6 Monopolistic Competition and oligopoly (Ch. 25) 7 Demand for Resources (Ch. 27) 8 Measuring Domestic Output and National Income (Ch. 7) 9 Aggregate Demand and Aggregate Supply (Ch. 9, 11) 10 Fiscal policy and budget deficit (Ch. 10,12) 11 Monetary theory (Ch. 13, 14) 12 Monetary policy (Ch. 15) 13 Mid-term test 14 Exchange rate theory and balance of payments (Ch.38) 15 Currency attack and exchange rate regimes (Ch.38) 5