Economics A101, 30 Credits

Contents

Module 1: Microeconomics, 7.5ECTS
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 subsides 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, 7.5ECTS
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 shortrun – The business cycle and unemployment, 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 introduced. GDP will be the starting point for the 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 continues with stabilization policy, i.e. active fiscal- and monetary policy, the different tools available for the Government or the Central Bank to use. 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 longrun – inflation and growth, 7.5ECTS
Module 4 continues where the previous module ends. The focus changes from the short-run to a medium to long-run analysis of the economy. The module starts by introducing how price changes and inflation affects the possibilities for a successful stabilization policy. Focus lies on how changes in demand influence the inflation rate in the economy.

The second part of the module concerns economics growth and the determinants of growth in the long-run. Theories describing the role of savings and technology are introduced and the question of why some countries are rich and some poor are discussed. The module is also explaining different kind of economic crises and how to design the economic-political framework. Focus are on the European experience and the last financial- and debt crises.

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, 7.5ECTS
After completion of this module, students should be able to:
- 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
- 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
- Describe the price formation mechanism under perfect competition
- Explain how taxes and subsidies affect market equilibrium
- Explain how the market mechanism achieves an effective allocation of resources under perfect competition
- Explain basic welfare concepts and how to use them in economic applications.
- Describe relevant aspects of the Swedish tax system. 

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

Module 3: Macroeconomic analysis in the shortrun – The business cycle and unemployment, 7.5 ECTS
After completion of this module, students should be able to:
- Define and calculate the level and change in welfare over time and across countries
- Explain and illustrate the effects of different shocks to the economy on GDP in the short-run
- 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.
- Describe basic trade theory
- Exemplify and apply macroeconomic models on relevant problems.
- Describe the Swedish economy of today and relate the situation to monetary- and fiscal policy. 

Module 4: Macroeconomic analysis in the longrun – inflation and growth, 7.5ECTS
After completion of this module, students should be able to:
- Explain and illustrate the connection between aggregate supply and aggregate demand and describe the possibilities and limitations of monetary- and fiscal policy in an open economy in the long-run.
- Describe the origins to, and consequences of, unemployment
- Describe the determinants of economics growth
- Explain and illustrate how changes in savings, technology and population growth affects welfare in the long-run
- Explain the European integration, EMU and other monetary arrangement
- Explain different policy frameworks
- Exemplify and apply macroeconomic models on relevant problems.

Required Knowledge

Form of instruction

The teaching consist of lectures, exercises and seminars.

Examination modes

The examination consist of mid-module exams (duggor), written examination in 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, 75% or more) Pass (Godkänd, G, 50% or more) Fail (Underkänd, U, less than 50%). 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 a right to have another grading teacher. A written request for an alternative examiner should be handed to the Dean of the Business School no later than two weeks before the next examination opportunity.

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