SHEB103 Principles of Microeconomics

Annotation:

This unit aims to introduce students to Microeconomics by providing students with a detailed analysis of the operation of the different microeconomic markets and the factors of production, focusing on the behaviour of households and firms. Students will acquire an in-depth knowledge of the main economic assumptions that are a prerequisite for any economic analysis. More specifically, a thorough analysis of the main economic issues will be presented which span from scarcity, opportunity costs and production possibilities, comparative advantage, supply and demand, costs, revenues, product pricing and outputs, efficiency and the role of government. Through the material covered the student will acquire the basic economic knowledge that will support future decisions on economic issues and will enhance her/his skills with respect to the application, analysis, synthesis and evaluation of the various microeconomic phenomena.

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Business Studies (Joint programme with The University of York)

Lecturers:

Dr. Andreas Alexiou
Assoc. Prof. Stefan Stefanov
Asst. Prof. Elena Spasova, PhD

Course Description:

Competencies:

Students who complete this course:

1) will know:

• Understand demand and supply their determinants and the outcomes of price controls

• Recognise and explain the differences and similarities between the different market structures

• Describe and explain the concepts of elasticity, cost, revenues, profits

• Explain the role of households and firms in an economy.

2) will be able to:

• Identify the basics of microeconomic theory and perform analyses on various microeconomic issues.

• Assess how firms are taking their decisions in an economy

• Recognise and evaluate the role of governments in the more equitable allocation of wealth in the economy

• Explain the basics of general equilibrium theory


Prerequisites:
Students are required to have the following knowledge and/or skills:

• No preliminary requirements



Types:
Full-time Programmes

Types of Courses:
Lecture

Language of teaching:
English

Topics:

  1. Introduction to Economics: The Scope and Method of Economics. • Why study economics • The scope of economics • The method of economics • How to read and understand graphs
  2. Scarcity, Choice and Opportunity Cost. • Scarcity and choice in a one-person economy • Scarcity and choice in an economy of two or more • The Production Possibility Frontier • The Economic problem • Command, mixed and free economy
  3. Demand, Supply and the Market • The circular flow in the economy • Market demand and supply • The determinants of demand and supply • Movements along and shifts of demand and supply curves • Equilibrium price and output determination in a free market • The consequences of price controls
  4. Elasticity • Price elasticity of demand • How to calculate elasticities • The determinants of demand elasticity • Other important elasticities
  5. Household Behaviour and Consumer Choice • Household Choice in Output Markets • The Basis of Choice: Utility • The Budget Constraint • Diminishing Marginal Utility • Income and Substitution Effects
  6. The Production Process: The Behaviour of Profit Maximizing Firm • The Behaviour of Profit-Maximizing Firms • The Production Process • Choice of Technology • Costs in the Short Run • Output Decisions: Revenues, Costs, and Profit Maximization
  7. Short-Run Costs and Output Decisions • Costs in the Short Run • Output Decisions: Revenues, Costs, and Profit Maximization
  8. Long-Run Costs and Output Decisions • Short-Run Conditions and Long-Run Directions • Long-Run Costs: Economies and Diseconomies of Scale • Long-Run Adjustments to Short-Run Conditions
  9. General Equilibrium and the Efficiency of Perfect Competition; Monopoly & Antitrust Policy • Market Adjustment to Changes in Demand • Allocative Efficiency and Competitive Equilibrium • The Sources of Market Failure • Evaluating the Market Mechanism • Imperfect Competition and Market Power • Price and Output Decisions in Pure Monopoly Markets • The Social Costs of Monopoly • Price Discrimination • Remedies for Monopoly: Antitrust Policy
  10. Revision

Bibliography:

Textbooks

1. Arnold, Roger, A. (2014) Economics. 11th edition, International edition, Cengage Learning

2. Mankiw, G. N. (2015) Principles of Economics. 7th Edition, Cengage Learning

3. Begg, D., Fischer, S., and Dornbusch, R. (2014) Economics. 11th Edition. McGraw-Hill

4. McConnell, C.R. & Brue, S.L. (2012) Economics. 19th International edition, McGraw Hill

5. Sloman, J., Hinde, K. & Garratt, D. (2013) Economics for Business. 6th edition, Prentice Hall