66231 - Crash Course in Economics

Learning outcomes

This course is designed as an introduction to a broad range of economic concepts. Its aim is to supply the successful students with the foundations in Economics they need to go through the remaining part of their studies.  

The early part of the course focuses on microeconomic analysis including the behavior of consumers and firms. We analyze markets for goods and services and policy choices that affect these markets.

The later part of the course moves on to macroeconomic concepts such as Gross Domestic Product, inflation and interest rates.

Course contents

Supply, Demand and Market Equilibrium: Demand and Supply Curves and Their Shifts. The Elasticities of Demand and of Supply. The Market Equilibrium.

Consumer and Producer Surplus. Maximizing the Total Surplus: the Benevolent Social Planner and the Efficiency of Competitive Markets.

The tax system and its costs. The deadweight loss of taxation.

The Costs of Production. The Production Function. Total Revenues and Total Costs. Opportunity Costs. Economic vs Accounting Profit. Fixed and Variable Costs. Economies and Diseconomies of Scale.

Firms in a Perfectly Competitive Market. Profit Maximization and the Competitive Firm’s Supply Curve. Sunk Costs. The Long Run Equilibrium.

Monopoly. Monopoly’s Revenues and Profit Maximization. The Welfare Cost of Monopoly. Price Discrimination. Public Policy Toward Monopolies.

Measuring the Economy’s Performance: the Gross Domestic Product. The Components of GDP: Consumption, Investment, Government Purchases, Net Exports. Real vs Nominal GDP and GDP Deflator. GDP and Well-Being.

The Consumer Prices Index and the inflation rate. Saving and Investment in the National Income Accounts. The Market for Loanable Funds. Budget Deficit and Government Debt.

The Role of Money in the Economy. Money Supply, Money Demand and Monetary Equilibrium. The Adjustment Process. Money Neutrality. The Fisher Effect.

Aggregate Demand and Aggregate Supply. The Influence of Monetary and Fiscal Policy on Aggregate Demand.

Readings/Bibliography

N.G. Mankiw, M.P. Taylor, Economics (3rd edition), Cengage Learning, 2014.

Before the course begins, students should watch the Mankiw's Ten Principles of Economics video which can be found at:

 https://www.youtube.com/watch?v=PXJvyHe1aZk

Teaching methods

Lectures.

Assessment methods

Written test. Details about this test will be supplied by the instructor during the first class.

Lecture attendance is strongly encouraged.

Teaching tools

Blackboard.

Office hours

See the website of Luciano Messori