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Syllabus:

Economics A101, 30 Credits

Swedish name: Nationalekonomi A101

This syllabus is valid: 2019-07-08 valid to 2022-05-29 (newer version of the syllabus exists)

Course code: 2NE061

Credit points: 30

Education level: First cycle

Main Field of Study and progress level: Economics: First cycle, has only upper-secondary level entry requirements

Grading scale: VG Pass with distinction, G Pass, U Fail

Responsible department: Department of Economics

Revised by: Rector of Umeå School of Business and Economics, 2019-06-20

Contents

Module 1: Microeconomics, 7.5 ECTS
The module starts by describing different tools and concepts used in (micro)economics. The module continues by introducing the behavior of the single individual; how much goods and services to consume and how much of production factors to supply. The firm's resource allocation problem contains decisions on how much to produce and the form of production.

Later parts of the course discuss price theory, i.e. how the action of firms and individuals determines the price and quantity on different markets. The analysis focuses first on a partial equilibrium situation and comparative statics are used to understand how the behavior of individuals and firms changes when underlying factor changes. The role of the government, and how taxes and subsidies can change actors behavior, is also introduced.

The last part of the course focuses on general equilibrium analysis, economic efficiency and how a market economy can, under certain circumstances, lead to an efficient resource allocation.

Module 2: Market failures and resource allocation problems, 7.5 ECTS
The module questions the assumptions fundamental for perfect competition and the resulting economic efficiency. The firms profit maximization problem under imperfect competition (monopoly, oligopoly and monopolistic competition). Within the framework of imperfect competition, game theory can also explain firm behavior.  In addition, the market structure has an impact on factor markets.

Over and above the market structure, the module introduces other forms of market imperfections, such as uncertainty, externalities, and asymmetric information.  Given these market failures, can the government affect, and increase individuals' welfare? The discussion of government action focuses on competition policy, taxes (for example in the environmental realm), and public good provision.

Module 3: Macroeconomic analysis in the short run, 7.5 ECTS
The overall objective of the module is to introduce macroeconomic theory and how the economy works in the short-run. The module aims at giving the student the necessary tools to analyze welfare over time and across countries.

To facilitate an analysis of the economy central concepts as Gross Domestic Product (GDP), Balance-of-Payments (BoP), growth, unemployment, inflation and exchange rates are briefly introduced. GDP will be the starting point for further analysis of its determinants and how fluctuations in GDP affect unemployment. The BoP will be the starting point for an analysis of international trade where the students also are introduced to theoretical trade models.

The module includes stabilization policy, i.e. active fiscal and monetary policy, the different tools available for the government or the central bank to use. The understanding of the goods and financial markets is in focus. The objective is to give the student a good understanding of macroeconomic models but also the possibilities and limitations of fiscal and monetary policy.

Module 4: Macroeconomic analysis in the long run, 7.5 ECTS
Module 4 continues where the previous module ends. The focus changes from short-run to medium to long-run analysis of the economy. The module starts by introducing the concept of the medium run and by explaining the equilibrium in the labour market as well as the relation between inflation, unemployment, and output. Focus lies on how changes in the aggregate demand influence inflation in the economy and how fiscal and monetary policies can be used to stabilise the economy. Examples and experience of the European fiscal and monetary policy are presented.

The second part of the module concerns economic growth and the determinants of growth in tte long run. Theories describing the role of capital, savings, and technology are introduced and the question of why some countries are rich and some poor are discussed.

The objective is to give the student a good understanding of macroeconomic models but also the possibilities and limitations of fiscal and monetary policy in the long run.

Expected learning outcomes

Module 1: Microeconomics, 7.5 ECTS
After completion of this module, students should be able to:
  1. Demonstrate the ability to apply the theories dealing with the individual's consumption choices, allocation of time between work and leisure and intertemporal consumption problem.
  2. Demonstrate the ability to apply the theories dealing with the firm's choice of production factors and the firm's profit maximization problem given perfect competition.
  3. Describe the price formation mechanism under perfect competition.
  4. Explain how taxes and subsidies affect market equilibrium.
  5. Explain how the market mechanism achieves an effective allocation of resources under perfect competition.
  6. Explain basic welfare concepts and how to use them in economic applications.
  7. Describe relevant aspects of the Swedish tax system.

Module 2: Market failures and resource allocation problems, 7.5 ECTS
After completion of this module, students should be able to:
  1. Explain the meaning of different market failures and the government's ability to correct these.
  2. Explain how different market structures affect resource allocation.
  3. Describe the individual organization's strategic behavior.
  4. Describe the basics of government competition policy.
  5. Explain the conditions for public goods and service production.
  6. Explain how environmental taxes and regulation can correct for externalities.
  7. Apply the decision rules for public investment.

Module 3: Macroeconomic analysis in the short run, 7.5 ECTS
After completion of this module, students should be able to:
  1. Define and calculate the level and change in welfare over time and across countries.
  2. Explain and illustrate the effects of different shocks to the economy on GDP in the short-run.
  3. Explain and illustrate the relationship between the goods market and the money market in the short-run and describe the possibilities and limitations of monetary and fiscal policy in an open economy.
  4. Describe basic trade theory.
  5. Exemplify and apply macroeconomic models on relevant problems.
  6. Describe the Swedish economy of today and relate the situation to monetary and fiscal policy.

Module 4: Macroeconomic analysis in the long run, 7.5 ECTS
After completion of this module, students should be able to:
  1. Describe the origins and consequences of unemployment.
  2. Understand and explain the relations between the economy's output, inflation and unemployment.
  3. Understand and describe the possibilities and limitations of monetary and fiscal policy in open and closed economies in the longer run.
  4. Understand the role of the Eurozone's monetary policy.
  5. Describe the determinants of economic growth in the long run.
  6. Explain and illustrate how changes in savings, technology and population growth affect welfare in the long run.
  7. Exemplify and apply macroeconomic models on relevant contemporary problems.

Required Knowledge

English B, Mathematics C, Social Science A. Or: English 6, Mathematics 3b / 3c, Social Science 1b / 1a1+1a2

Form of instruction

The teaching consist of lectures, exercises and seminars.

Examination modes

The examination consists of mid-module exams (duggor), written examination at the end of each module, assignments and seminars. The result from the mid-module exams, assignments and seminars are only valid during the current semester. A second exam opportunity is always offered within a short time span after the regular exam date for those students not achieving a Pass. The subsequent exam opportunity is either the re-take opportunity the week before the fall semester or the next regular exam date.

The following grading system will be used: Pass with Distinction (Väl Godkänd, VG) Pass (Godkänd, G) Fail (Underkänd, U). Grades on the course are awarded when the student has passed all examinations and compulsory course elements on all four modules. The grade Pass with Distinction on the course requires the grade Pass with Distinction on at least three out of four modules.

When a student has failed an examination on two occasions, he or she has the right to ask for another examiner. A written request for an alternative examiner should be handed to the Director of Studies no later than two weeks before the next examination opportunity.

Credit transfer
Academic credit transfers are according to the University credit transfer regulations.

Literature

Valid from: 2019 week 28

Perloff Jeffrey M.
Microeconomics
8th edition, Global edition : Boston : Pearson : cop. 2018 : 813 pages :
ISBN: 9781292215624
Search Album, the University Library catalogue

Perloff Jeffrey M.
Microeconomics
8th edition, Global edition : Boston : Pearson : cop. 2018 : 813 pages :
ISBN: 9781292215624
Search Album, the University Library catalogue

Macroeconomics : a European perspective
Blanchard Olivier, Amighini Alessia, Giavazzi Francesco
Third edition : New York : Pearson : [2017] : 563 pages :
ISBN: 978-1-292-08567-8
Search Album, the University Library catalogue

Macroeconomics : a European perspective
Blanchard Olivier, Amighini Alessia, Giavazzi Francesco
Third edition : New York : Pearson : [2017] : 563 pages :
ISBN: 978-1-292-08567-8
Search Album, the University Library catalogue