Introduction to Economics
Run by Marketing: Bangor International College
20 Credits or 10 ECTS Credits
Semester 1 & 2
Organiser: Mrs Laura McKenzie
Overall aims and purpose
This module is designed to introduce microeconomics and macroeconomics principles, concepts and models of analysis. It aims to provide students with a basic understanding of different economic systems, basic economic problems, concept of scarcity, economic resources and other economic concepts. This unit focuses largely on the working of free market and demonstrates how economic decisions in respect of resource allocation are based on market demand, supply and prices. The role of government to safeguard the interest of the consumers and producers and to improve the economic efficiency of the free market outcome is examined. The level of competition and efficiency of the free market equilibrium under the different market structures are investigated.
The module will assist students to develop basic mathematical skills through solving simple market demand and supply equations to find market equilibrium and applying simple calculus to estimate the elasticity of demand and supply; It will develop basic mathematical skills through solving aggregate demand and aggregate supply equations to find macroeconomic equilibrium;
The module will help develop team work, group skills and verbal communication skills through group discussion, presentation and other group activities; analytical and decision making skills through case study assignments; research skills through collecting, collating, analysing and interpreting data for case study analysis and written report; and planning and writing skills through essay style exam questions and written report.
Introduction to microeconomics Basic economic problems, scarcity, choice, opportunity costs, economic resources, production possibility frontier
Demand, supply and market equilibrium Demand for goods, determinants of demand, demand curve, supply of goods, determinants of supply, supply curve, price and output determination, market equilibrium, consumer surplus, producer surplus, interrelationship between markets: joint demand, competitive demand, composite demand and joint supply
Elasticity Price elasticity of demand and its determinants, cross price elasticity of demand, income elasticity of demand, supply elasticity and its determinants, relationship between price elasticity of demand and consumer expenditure
Types of goods Normal goods, inferior goods, luxury goods, necessary goods, Giffen goods, Veblen goods and quality goods
Price control, indirect tax and subsidy Minimum price, maximum price, indirect taxes and subsidies, relationship between tax, subsidy and elasticity
Economic efficiency and market failure Role of the market and function of prices, economic efficiency: productive efficiency and allocative efficiency, market failure and reasons for market failure: externalities, public goods and merit goods, government intervention to correct market failure
Theory of production Short run production, fixed factors and variable factors, diminishing marginal returns, long run production, returns to scale; constant, increasing and decreasing returns to scale
Cost of production, revenue and profits Economic costs and opportunity costs, short run cost of production: fixed costs and variable costs, total cost, average cost and marginal cost, diminishing returns and short run average and marginal costs, long run cost of production: economies of scale and long run average cost, revenue: total revenue, average revenue and marginal revenue, profit maximization, normal profit and economic (super normal) profit
Introduction to market structure Key characteristics of a market, competition and market structure, types of markets: perfect competition, monopoly, imperfect competition: monopolistic competition, oligopoly
Introduction to macroeconomics Overview of macroeconomics, macroeconomic objectives, business cycles, circular flow of income, measures of national income
Economic growth Measure of economic growth, output gap: potential and actual output, causes of economic growth, costs and benefits of growth, UK economic growth
Unemployment Measure of unemployment, types of unemployment, costs of unemployment, UK unemployment
Inflation Meaning of inflation, measure of inflation, causes of inflation, costs of inflation, UK inflation
Balance of payments Definition, components of balance of payments, current account deficit and surplus, factors affecting current account balance, policies to reduce a current account balance, UK current account
Aggregate demand Meaning and components of aggregate demand, aggregate demand curve, shifts in aggregate demand curve, multiplier
Aggregate supply and equilibrium national output
Meaning of aggregate supply, short run and long run aggregate supply curves: Classical and Keynesian models, macroeconomic equilibrium, equilibrium national output in the short run and long run, shifts in aggregate demand and aggregate supply on equilibrium national output, economic growth, unemployment, inflation and current account balance.
Macroeconomic policy: Fiscal policy, monetary policy and supply side policies Definition, fiscal policy instruments: government spending, taxation and borrowing, budget deficit, government borrowings and crowding out effect, expansionary and contractionary fiscal policy, automatic fiscal stabilisers, monetary policy instruments: interest rate and money supply, loose and tight monetary policy, supply side policies: market oriented and interventionist, effects of fiscal policy, monetary policy and supply side policies on aggregate demand and aggregate supply, effects of macroeconomic policies on macroeconomic objectives
Threshold (D- to D+) (40-49%) Student has shown sufficient grasp of some of the topics studied to have achieved the lowest level of pass which allows progression onto an undergraduate degree programme
Excellent (A- to A*) (70-100%) Student has demonstrated consistent engagement with all topics and issues studied in the module and attained a grade which shows the ability to study effectively at undergraduate degree level.
Good (C- to B+) (50-69%) Student has demonstrated a sound, basic knowledge of most of the topics and issues covered in the module and achieved a grade showing clear suitability for study at undergraduate degree level.
Analyse the macroeconomic policy objectives and ways in which governments use macroeconomic policy instruments to accomplish macroeconomic policy objectives
Collect and collate data and information, and analyse data and information to present in a written format
Demonstrate understanding of key concepts within the subject area and, use oral, written and presentation skills to explain and make effective arguments on critical issues
Apply knowledge and understanding of key theories to practical situations using a range of problem solving skills.
Use economic concepts of opportunity costs, optimization, and cost and benefit analysis to make rational business and economic decisions
Demonstrate knowledge and understanding of the scope and concepts of macroeconomic and microeconomics theories and models
Apply knowledge and understanding of key theories to practical situations, problem solving and complete formal assessments successfully
|CASE STUDY||Term 1 - Case Study Analysis||
Students are provided with two unseen case studies related to an area of microeconomics. Students must produce an analysis of the variety of factors that affected the information in the case study utilising all module learning up until this point.
|GROUP PRESENTATION||Term 2 - Presentation and Discussion||
In small groups, students present an analysis of macroeconomic policy based on a subject of their choosing, in conjunction with their tutor. Each student will present a different aspect of their chosen macroeconomic policy for 10 minutes. A group mark is awarded for this assessment.
|EXAM||Term 1 - Exam||
A 2-hour closed-book unseen examination consisting of a combination of short answer and longer answer questions testing the student’s understanding of all module content covered to this point based on microeconomics. Answer key and specific and task relevant assessment criteria.
|EXAM||Term 2 - Exam||
A 2-hour closed-book unseen examination consisting of a combination of short answer and longer answer questions testing the student’s understanding of all module content covered to this point based on macroeconomics. Answer key and specific and task relevant assessment criteria.
Teaching and Learning Strategy
5 hours a week
1 hour a week lecture of key concepts.
4 hours a week of seminars.
- Exploring - Able to investigate, research and consider alternatives
- Information retrieval - Able to access different and multiple sources of information
- Critical analysis & Problem Solving - Able to deconstruct and analyse problems or complex situations. To find solutions to problems through analyses and exploration of all possibilities using appropriate methods, rescources and creativity.
- Presentation - Able to clearly present information and explanations to an audience. Through the written or oral mode of communication accurately and concisely.
- Teamwork - Able to constructively cooperate with others on a common task, and/or be part of a day-to-day working team
- Argument - Able to put forward, debate and justify an opinion or a course of action, with an individual or in a wider group setting
Subject specific skills
- Managing people through group work tasks. Participating in listening and sharing information to reach an outcome
- Problem solving by analysing facts and circumstances to determine the cause of a problem and identifying and selecting a possible solution.
- Research to analyse some business data
- Numeracy. The use of quantitative skills to manipulate data, evaluate, estimate and model business problems, functions and phenomena.
Talis Reading listhttp://readinglists.bangor.ac.uk/modules/bic-1005.html
John Sloman, Alison Wride and Dean Garratt (2018), Economics, 10th edition, Pearson education Ltd
Paul Krugman and Robin Wells (2018) Economics, 5th edition, Worth Publishers
Courses including this module
Compulsory in courses:
- N406: BSc Accounting and Finance (Bangor International College) year 1 (BSC/BICAF)
- N324: BSc Banking and Finance (Bangor International College) year 1 (BSC/BICBF)
- N105: BSc Business Studies (Bangor International College) year 1 (BSC/BICBS)
- N106: BSc Business Stud & Finance (Bangor International College) year 1 (BSC/BICBSF)
- NN24: BSc Management with Account (Bangor International College) year 1 (BSC/BICMNA)
- N503: BSc Marketing (Bangor International College) year 1 (BSC/BICMRK)