AB 0901 Principles of Economics

Course Description and Scope The main aim of this course is to provide a basic understanding of Economics. The first 7 weeks of the course will cover topics in Microeconomics such as the theory of consumption, the theory of production, and market structure. The last 5 weeks of the course will cover topics in Macroeconomics such as inflation, unemployment, balance of payments, etc. Fiscal, monetary and exchange rate policy will also be examined. Proposed Lecture Schedule 2012
Aug 13 to 17

Lecture 1 (make-up) to be conducted on Aug 14 from 5pm to 7pm at LT 24
Aug 20 to 24

Topics Microeconomics Lecture 1: Introduction 1.1 Definition of Economics 1.2 Scarcity and Choice 1.3 Production Possibilities Frontier 1.4 Introduction to Supply, Demand and Market Equilibrium 1.6 Elasticity

Readings MP Chapters 1,2 , 3 and 4

Lecture 2 (make up) to be conducted on Aug 21 from 5pm to 7pm at LT 24 Tutorial 1 begins this week
Aug 27 to 31

Lecture 2: Efficiency and Equity, and Markets in Action 2.1 Demand and Marginal Benefits Supply and Marginal Cost Is the Competitive Market Efficient? Is the Competitive Market Fair? 2.2 Markets in Action Housing Markets and Rent Ceilings The Labour Markets and Minimum Wage Taxes, Subsidies and Quotas

MP Chapters 5 & 6

Lecture 3 Tutorial 2

Lecture 3: Households’ Choices 3.1 The Household’s Budget Preferences and Utility Maximizing Utility 3.2 Consumption Possibilities Preferences and Indifference Curves Predicting Consumer Behaviour Lecture 4 Firms and Markets 4.1 Organising Production 4.2 Output and Costs Production Short and Long Run Cost

MP Chapters 7 & 8

Sept 3 to 7 Lecture 4 Tutorial 3

MP Chapters 10, 11 &12


Topics 4.3 Perfect Competition The Characteristics Short-Run and Long Run Equilibrium Lecture 5: Perfect Competition and Monopoly 5.1 Perfect Competition The Characteristics Short-Run and Long Run Equilibrium 5.2 Monopoly Market Power Output and Price Decision Comparison of Perfect Competition and Monopoly Price Discrimination Natural Monopoly 5.2 Monopolistic Competition Price and Output in Monopolistic Competition Product Development and Marketing 5.3 Oligopoly Two Main Oligopoly Models Oligopoly Games Lecture 6: Monopolistic Competition and Oligopoly 6.1 Monopolistic Competition Price and Output in Monopolistic Competition Product Development and Marketing 6.2 Oligopoly Three Main Oligopoly Models Oligopoly Games Lecture 7: Market Failure and Government 7.1 Regulation and Antitrust Law The Economic Theory of Government 7.2 Externality Government Actions in the Face of Externality 7.3 Public Goods and Common Resources Classifying Goods and Resources Public Goods and the Free-Rider Problem NOTE: Quiz 1 based on multiple choice questions, covering material from Lectures 1-6 will be conducted during your respective tutorial session (Tutorial 6).


Sept 10 to 14

MP Chapters 12 and 13

Lecture 5 Tutorial 4

Sept 17 to 21

MP Chapters 14 & 15

Lecture 6 Tutorial 5

Sept 24 to 28

Chapters 16 & 17

Lecture 7 Tutorial 6

Oct 1 to 7


2012 Oct 8 to 12 Lecture 8 Tutorial 7 (review of Quiz 1 questions)

Topics Macroeconomics Lecture 8: Macroeconomic Overview 8.1 Origins and Issues of Macroeconomics Economic Fluctuations and the Okun Law Inflation and Unemployment Macroeconomic Policy Challenges and Tools 8.2 Measuring GDP and Economic Growth Circular Flow of Expenditure and Income The Expenditure Approach The Income Approach Real GDP and the Price Level 8.3 Monitoring Jobs and the Price Level Unemployment and Full Employment The Consumer Price Index Lecture 9: Determination of Real GDP 9.1 At Full Employment: The Classical Model Real GDP and Employment The Labour Market and Potential GDP Unemployment at Full Employment 9.2 Expenditure Multipliers: The Keynesian Model Fixed Prices and Expenditure Plans Real GDP with a Fixed Price Level The Multipliers Lecture 10: Money, the Price Level and Inflation 10.1 What is Money? 10.2 Depository Institutions 10.3 The Federal Reserve System 10.4 How Banks Create Money 10.5 The Market for Money 10.6 The Quantity Theory of Money 10.7: Money market and Keynesian Model Lecture 11: Aggregate Supply and Aggregate Demand 11.1 Aggregate Demand 11.2 Aggregate Supply 11.3 AD-AS Model 11.4 AD-AS Model and Demand Management Policies Lecture 12: The Exchange Rate and the Balance of Payments 12.1 Currencies and Exchange Rates 12.2 The Foreign Exchange Market 12.3 Changes in Demand and Supply: Exchange Rate Fluctuations

Readings MP Chapters 21 & 22

Oct 15 to 19 Lecture 9 Tutorial 8

MP Chapters 23 and 28

Oct 22 to 26 Lecture 10 Tutorial 9

MP Chapters 24 and 25

Oct 29 to Nov 2 Lecture 11 Tutorial 10

MP Chapters 27, 30 & 31

Nov 5 to 9 Lecture 12 Tutorial 11

MP Chapter 26


Topics 12.4 Exchange Rate Policy NOTE: Quiz 2 based on multiple choice questions, covering materials from Lectures 7 to 11, will be conducted during the second half of your respective tutorial session (Tutorial 11). Lecture 13: Role of Unions and Government in Society Tutorial 12: Review of Quiz 2 questions


Nov 12 to 16 Lecture 13; (make-up) to be conducted on Nov 13 from 5pm to 7pm at LT 24 Tutorial 12

Basic Texts: Economics, 10th Edition Michael Parkin, University of Western Ontario Publisher: Addison-Wesley Copyright: 2008

NTU Library Call Number: HB171.5.P247 2012 Online Resources Student Learning Support
Here is the companion website for Parkin: http://wps.aw.com/aw_parkin_economics_8/0,13296,4324270-,00.html This website is available FREE to students with the text. It features Economics in the News Today, solutions to odd-numbered problems in the text, glossary flashcards, graphing tools, and study help. For each chapter, students can access:       Chapter objectives Study resources, such as PowerPoint® slides and answers to odd-numbered problems in the text Quick multiple-choice quizzes Web exercises and links to online resources Key figures from the text eThemes of the Times, a collection of recent articles from the New York Times, and analysis questions

Method of Instruction

Lectures Tutorials

: :

2 hours per week 1 hour per week

Course Assessment Quizzes Class participation Final Examination : : : 20 % 10% 70 % _____ 100% _____

Lecturer Professor Chew Soon Beng

Office Room No. HSS - 04 - 78

DID 6790 4761

E-mail Address asbchew@ntu.edu.sg

Tutors Please see Blackboard for individual tutorial sections.