40430 - Notions of Economics

Course Unit Page

SDGs

This teaching activity contributes to the achievement of the Sustainable Development Goals of the UN 2030 Agenda.

No poverty Good health and well-being Decent work and economic growth Reduced inequalities

Academic Year 2021/2022

Learning outcomes

The goal of this course is to provide the students with those basic tools that are necessary to study the behavior of the most important economic agents (consumers, firms, governments) and their interaction in different market structures. At the end of the course the students will also become familiar with the set of concepts that economic theory has developed to describe and explain the aggregate functioning of economic systems, and in particular with the notions of domestic product, money, interest rates, unemployment, inflation. 

Course contents

PART I INTRODUCTION. THE FUNDAMENTAL PRINCIPLES OF ECONOMICS AND THE ROLE OF ECONOMIC MODELS.
Economics as a social science. Individual choices and their interaction: how does an economic system work? Comparative advantage, specialization and the gains from trade. The use of graphs in economics.

P. Krugman, R. Wells: Introduction, Chapters 1 e 2.

PART II MARKETS AND PRICES. DEMAND, SUPPLY AND ELASTICITY. PRICE AND QUANTITY CONTROLS. COSTS AND BENEFITS OF TAXATION.

The model of market demand and market supply in perfect competition. Market equilibrium, The concept of price elasticity. Consumer surplus and the demand curve. Producer surplus and the supply curve. Surplus and gains from trade. Why do governments want to control prices? Price floors, price ceilings, production quotas and taxation. The government revenue with a per-unit tax.

P. Krugman, R. Wells: Chapters 3, 4, 5.

PART III FACTORS OF PRODUCTION AND COSTS. PERFECT COMPETITION AND THE SUPPLY CURVE.
Behind the supply curve: from production functions to cost curves. Short and long run analysis. The definition of perfect competition. Production and profits of a perfectly competiitve firm. The industry’s short- and long-run supply curves.

P. Krugman, R. Wells: Chapters 6 e 7.

PART IV  MARKET STRUCTURES WITH PRICE-MAKING BEHAVIOUR.

Monopoly, profit maximization and regulation. Price discrimination. Oligopoly, the prisoner’s and implicit collusion. Product differentiation and price leadership. Monopolistic competition. Externalities and public goods.

P. Krugman, R. Wells: Chapters 8, 9.

PART V MACROECONOMICS: THE BIG PICTURE
Introduction to Macroeconomics. Business cycles and the concept of inflation. Il ciclo economico e il concetto di inflazione. How to measure the performance of an economic system: the National Accounts. The main macroeconomic indicators: gross domestic product, unemployment rate, price indexes, interest rates.

P. Krugman, R. Wells: Chapters 12, 13, 14. 

PART VI THE AD-AS MODEL
The aggregate supply. The aggregate demand. The multiplier. Short- and long.-run macroeconomic equilibrium. Government policies and demand/supply shocks

P. Krugman, R. Wells: Chapter 16.

PART VII STABILIZATION POLICIES
Fiscal Policies, multipliers and the budget balance. Long-run fiscal policies: public deficit and debt. The roles of money and the monetary roles of banks. The money mupltiplier. Le politiche fiscali nel lungo periodo: deficit e debito pubblico. Il significato della moneta e il ruolo monetario delle banche. The Federal Reserve system and the role of the European central Bank. Monetary policies and aggregate demand.

P. Krugman, R. Wells: Chapters 17, 18, 19.

Readings/Bibliography

P. Krugman, R. Wells, (2018), L'Essenziale di Economia, Zanichelli. Extra material might be distributed through the official course website (see https://www.unibo.it/sitoweb/m.alvisi/didattica )

Teaching methods

Traditional class-lectures articulated into six weekly hours, plus periodic tutorials. The material for each lecture will be indicated in the detailed calendar published on the official website (see https://www.unibo.it/sitoweb/m.alvisi/didattica) at the beginning of the course. 

 

Assessment methods

The final exam is a written test with a multiple-choice structure (24 questions), and the evaluation is expressed into thirties, from 18 to 30. Each correct answer is awarded +1.25 points, while a wrong or absent answer gets 0 points. If the final score of the exam is greater than 30, the professor can assign an honour mark (lode).

The time available for the exam is 55 minutes. During the exam, students are not allowed to use textbooks, notes or IT tools. 

The exam is passed with a minimum score of 18/30.

During the semester in which the course is taught, a midterm exam (consisting of 16 multiple-choice questions) is offered to all students. This exam will be coupled at the end of the course by a second exam (with the same structure) and the course score will be the average of the scores obtained in the two partial exams. In each exam, a  correct answer is  awarded +2 points, while a wrong or absent answer gets 0 points. If the average of the two scores is greater than 30,  the professor can assign an honour mark (lode). The time available for both the mitderm and the final exam is 35 minutes. During the exam, students are not allowed to use textbooks, notes or IT tools.

Students can refuse (only once) a positive evaluation of their exam with a written communication to the professor. In order to make this choice effective, the professor will register the scores electronically on the day after the results have become public on-line.

Teaching tools

In addition to the 60 hours of teaching, the array of teaching facilities is the following:
1) a course tutor;
2) 8-9 two-hour long tutorials. Duyring the tutorials, the tutor will go over simple numerical exercises that can help a better comprehension of the micro- and macroeconomic theory as well as multiple-choice questions of the sam kind the students will meet during the exam(s).
3) two weekly office hours by the teacher;
4) two office-hours weekly by the tutor;

Slides and other material, including the tutorials, will be available on the website. Attending the tutorials is strongly adviced. 

Office hours

See the website of Matteo Alvisi