Principles of Economics

Principles of Economics

A social science that studies how individuals, governments, firms and  nations make choices on allocating scarce resources to satisfy their  unlimited wants.

(1) Objectives:

 

Three main goals for the study of this course on the principles of economics:

  1. To help the beginning  economics student comprehend the principles essential for understanding the basic economizing problem, specific economic issues and the policy alternatives.
  2. To help the student understand and apply the economic perspective and to reason accurately and objectively about economic matters.
  3. To promote a lasting student interest in economics and the economy.

  

2. Course Outline:

• Microeconomics:

  1. Nature and definition of economics.
  2. Nature of economic analysis.
    • Positive and normative economics
    • Microeconomics and macro economics
    • Equilibrium, statics and dynamics.
  3. Economic theories:
    • Definition
    • Assumption
    • Prediction
  4. Basic tools and techniques
    • Functions
    • Total, average and marginal functions
    • Slope
  5. Central problems of an economy:Price mechanism:
    • Elements of the problem
    • Production possibility curve
    • Opportunity cost
    1. Assumption of economic analysis (other things being equal, assumption of rationality).
    2. Demand theory: (meaning of demand types demand, determinants of demand schedule and demand curve, exception of the law of demand, change in demand and change in quantity demanded.
    3. The theory of supply: firm's motive, nature of supply, shift in supply, supply schedule and supply curve, determinants of supply.
    4. The principle of equilibrium: (equilibrium of demand and supply, tabular presentation and diagrammatic representation of equilibrium, predictions of demand and supply analysis change in demand - change in supply and simultaneous change in demand and supply.
    5.  demand elasticity: (types, measurements, determinants
    6. supply elasticity, (measurements, determinants)
    7. Application of market mechanism:
      • Price controls (ceiling prices)
      • Price support (floor prices)
      • Minimum wage legislation
      • Shifting and incidence of tax
  6. Theories of consumers behaviour
    • cardinal approach
    • ordinal approach
  7. Theory of the firm:Costs theory
    • laws of production in the short-run
    • laws of production in the long-run
  8. Revenue of production

 

Macroeconomics:

  1. The meaning of national income accounts
  2. Methods of measuring gross domestic product (GDP).Problems of measurements of GDP
    • Income approach
    • Expenditure approach
    • Final output approach
  3. Price index.
    • consumer price index
    • GDP deflator
    • Nominal and real GDP
  4. Consumption and investment:Theory of income determination
    • Consumption function
    • Saving function.
    • Marginal propensity to consume (MPC) and marginal propensity to save (MPS).
    • Investment function

 

3. References:

  1. Edgar K Browning (2008) Microeconomic Theory and Applications, 10th edition, Mark A. Zupan
  2. David Besanko (2010) Microeconomics, 4th edition Ronald Braeutigam.
  3. Subhendu Dutta (2006) Introductory economics (Micro and Macro), New Age Interactional.
  4. Samuelson and Nordhause (2005) Economics, 18th edition, McGraw Hill.
  5. Campbell R. McConnel and Stanley L. Brue (2002) Macroeconomic: Principles, Problems and policies, McGraw-Hill, Irwin Boston, London
  6. Bailey, M. L (1902), National Income and the price level: A study in Macro-theory. McGraw Hill
  7. Demburg & McDougall (1980). Macroeconomics: The measurement, Analysis, and control of aggregate Economic Activity. McGraw Hill, 6th edition
  8. McConnell, Brue, & Barbiero, Macroeconomics, 7th edition
  9. Samuelson, P. A (1964). Economics, McGraw Hill.
  10. Sargent T. J (1979) Macroeconomic theory. Academic Press.
  11. Shapiro E (1982). Macroeconomic Analysis, 5th. Edition Harcourt Barace Jovanovich.
  12. Eric, R, (1950). The elements of economic theory
  13. Ferguson, C. E, (1967). Microeconomic theory, Irwin inc.
  14. Koutosoyiannis, Microeconomics, 9 th edition.
  15. Lipsey, R. G Introduction to positive economics.
  16. Marshall, A., (1926). Principles of economics, rnacmillan
  17. Stigler, G. J. (1949). The theory of price.

 

4. Methods:

  • Lectures where verbal descriptions and illustrations are utilized.
  • Seminars where numerical examples are given solved.

 

Dr. Mohamed Eljack Ahmed

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