ADDIS ABABA UNIVERSITY

SOUTHERN CAMPUS
DEPARTMENT OF ARCHITECTURE
Course Title: Introduction to economics
Course No: Econ 101
Instructor: Eyasu Kumera
Course Objective This course basically introduces the fundamental concepts microeconomics
and macroeconomics. The microeconomics section introduces
fundamental economic concepts such as scarcity, opportunity cost, the
laws of demand and supply and elasticity. Concepts of a competitive
market and the essence of short-run production theory and profit
maximization are covered in this part of the course. Topics related to the
concept, measurement and problems of economy-wide performance are
treated under the macroeconomic part of the course.
Course Outline

1. Introduction
1.1 Definition of Economics
1.2 The Concept of Human Needs
1.3 Scarcity and Choice
1.4 Elements of Economic System
1.5 The Circular Flow of Economic Activities
1.6 Method, Types and Levels of Economic Analysis
1.7 Fundamental (Basic) Economic Problems and Alternative Systems
1.8 The Production Possibility Frontier
2. Micro Economics
2.1. Theory of Demand and Supply
2.1.1. Demand Analysis
2.1.2. Supply Analysis
2.1.3. Market Equilibrium
2.1.4. Elasticities
2.2. Theory of Consumer Behavior
2.2.1. Cardinal Utility
2.2.1.1. Total and Marginal Utility
2.2.1.2. Consumer’s Equilibrium
2.2.2. The Budget Line
2.2.2.1. Shift and Rotation of the Budget Line
2.2.3. Ordinal Utility
2.2.3.1. The Indifference Curve
2.2.3.2. Marginal Rate of Substitution
2.2.3.3. Consumer’s Equilibrium Using Ordinal Approach
2.3. Theory of Production
2.3.1. Concepts of Production and Production Functions
2.3.2. Production in the Short-Run and the Stages of Production
2.3.3. Production in the Long-run concepts of Iso-quant, Iso-Cost and Producer’s
2.4. Theory of Cost
2.4.1. Short-Run Costs and Short-Run Cost Curves
2.4.2. The Conventional Short-Run Cost Curves
 2.4.3. Long-Run Costs and Long-Run Cost Curves
2.4.4. Accounting Costs and Economic Costs
2.5. Analysis of Market Structure
2.5.1. Meaning, Elements and Classification of Market
2.5.2. Conditions for the Existence of Perfect Market
2.5.2. Short Run Equilibrium of the Firm
2.5.3. Short Run Profit or Loss?
2.5.4. Short run Supply Curve
2.5.5. Long Run Equilibrium of the Firm
2.5.6. Imperfect Competition
3. Macro Economics
3.1. Introduction to Macroeconomics
3.2. Objectives and Instruments in Macroeconomics
3.3. National Income: Concept and Measurement
3.3.1. Basic Concepts of Gross Domestic Product (GDP), Gross National Product
(GNP) and Others
3.3.2. Measurement of GNP
3.3.3. Shortcomings of National Income Accounting System
3.4. Major Macroeconomic Problems
3.4.1 Unemployment
3.4.2 Inflation
3.5. Aggregate demand and supply
3.6. Economic policy instruments: monetary, fiscal and income policy

References
1) Cambell R. McConnel, Economics: principles, problems and policies, McGraw-Hill, New
York.
2) David N. Hyman (1989), Economics, Trwin, Boston.
3) Paul A. Samuelson and William D. Nordhaus (1989), Economics, McGraw-Hill.
4) W.J. Boumol and A.S. Blinder, Economics: principles and policy, Harcout Brace Jouncbich,
inc.k, New York, any edition.
5) Gregory, paul R.F. Ruffin, J,ROY, Principles of Macroeconoimics Foreman and Company
Boston, 3rd ed, 1988
6) Bowden, E.V. Economics, the Science of Common Sense, 5th ed
7) Jhingan, M.L Macroeconomic Theory,
Theory, Dechi , 1998

Any other introductory textbook can be used as a reference.

Student Evaluation
Students will be evaluated on the basis of one/two assignments, one mid-term exam and one final
exam, the weights for each will be as follows: Assignment(s) (10%), Mid-term Exam (30%) and
Final Exam (60%.