SYLLABUS FOR INTRODUCTION TO ECONOMICS COMMON COURSE

I. Instructor Contact Instructor’s Name_______________________Mob.No_ _____________

Information Meeting day (s): _________ Meeting time: ___________
Building location: _________Floor No_ ______ Room No_ __________
Email: _____________ Consultation Hours:___________

II. Course Lecture Discussion Group & Home Total number

Information with Peers & Individual Study/Self- of hours per
Assessment
instructor Assignment study/ semester
48 30 15 40 25 158
Course is prearranged For all Fresh Man Programmes/Students/
to
Degree Program B.A. /BSc./BED/LLB & others
Course Title Introduction to Economics
Department
Course statusof Supportive
Management)
Course is coordinated Economics Department
Course
by by Number ECON 1105 (Proposed)Year I Semester II, Last Course)
ECTS /Credit Hours 5/3
Academic Year: _________ Semester: ___________

III. Course Description

This course provides a general introduction to economics combining elements of micro
and macro fundamentals. The first part of the course focuses on partial equilibrium
aspects of theories of consumer behaviour, producer behaviour as well as on the
arrangements and implications of different market structures. It will also cover the
neoclassical theory of product and/or service pricing for perfectly competitive,
monopolistic, oligopoly, and monopoly market structures. In addition, topics covered will

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include factor market pricing, general equilibrium analysis and distortions which relate to
asymmetric information and moral hazard problems. The second part will discuss
elements of macroeconomics that revolve around issues of measurement of aggregate
economic activities, unemployment, and inflation. Emphasis will also be given to
sources, consequences and policy responses to economic fluctuations. In the first part the
course commences by highlighting the underlying assumptions behind each theory
followed by in-depth analyses of the decisions of economic units subject to resource
constraints in an effort to realize their respective objectives assuming the prevalence of
market clearing situation. Finally, students will be able to contextualize the key analytical
instruments with stylized facts from the Ethiopian economy.

IV. General Objective

The course will enable the students to make critical and informed economic decisions and
it also equips the student with the necessary standard tools to interpret and explain key
economic phenomenon that affect outcomes at micro and macro levels.

V. Specific Objectives
This course is aimed at:
 Describing the major economic units making up a society and their respective
roles
 Familiarizing students with the standard concepts of individual decision-making
units, their objective functions and the constraints within which they operate
 Introducing students to the neoclassical theory of consumer preferences and utility
maximization approaches
 Providing students with instruments of analysing the cost structure of producers,
how firms organize factors of production and minimize costs both in the short and
the long run.
 Exploring the different market structures and their implication for firm pricing
and social welfare under increasing concentration of firm power from perfect
competition to monopoly.

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  Enlightening students with methods of general equilibrium analysis, distortions
arising from asymmetric distribution of information between transaction parties,
and the implications for regulation and competition policy.
 Equipping students with macroeconomic concepts that relate to national income
accounting, economic crisis, unemployment, inflation, and policy responses from
monetary and fiscal authorities.
 Enabling students to contextualize the key analytical instruments with stylized
facts from the Ethiopian economy.

VI. Expected Learning Outcomes

After completing introduction to economics, students will be able to:
 Describe the major economic units constituting a given society and their
corresponding roles
 Explain the objective functions of consumers and how they attain this objective
under resource constraints
 Define producers’ objective functions, describe their cost structures in the short and
the long run, and apply partial equilibrium approaches to find optimal prices and
quantities under different degrees of competition.
 Tabulate markets into different categories on the basis of the number of buyers and
sellers and outline the various social welfare implications of each market structure.
 Elaborate the concept of general equilibrium analysis, identify its merits and
demerits, and discuss the various market failures due to distortions arising from
imperfect information and cultivate the corresponding possible remedial measures
 Understand how aggregate economic measures are constructed, their weaknesses,
and alternative measures of national wellbeing
 Identify the sources and adverse effects of economic crises and describe the pool of
policy instruments that can be deployed to mitigate the consequences of these
crises.
 Contextualize the key analytical instruments with stylized facts from the Ethiopian
economy
VII. Units and Contents

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 Lecture Topics & sub-topics

0.1 Definition and meaning of economics

0.2 Opportunity and accounting costs
One day crash 0.3 Induction and deduction in economics
0.4 Partial and general equilibrium analysis
0.5 The economic circular flow model and production possibilities frontier
Chapter One: theory of consumer behaviour and demand

1.1 consumer preferences and choices

1.1. Consumer preference
1.2. Utility
1.2 Approaches to measuring utility
1.2.1 The cardinal utility approach
1.2.2 Assumptions of cardinal utility theory
1.2.3 Total and marginal utility
1.2.4 Law of diminishing marginal utility (LDMU)
1.2.5 Equilibrium of a consumer
1.2.6 Derivation of the cardinalist demand

Weeks 1,2 and 3 1.3 The ordinal utility approach

1.3.1 Assumptions of ordinal utility approach
1.3.2 Indifference set, curve and map
1.3.3 Properties of indifference curves
1.3.4 The marginal rate of substitution (MRS)
1.3.5 Types of indifference curves
1.4 The budget line or the price line
1.4.1 Factors affecting the budget line
1.4.1.1 Effects of changes in income
1.4.1.2 Effects of changes in price
1.5 Optimum of the consumer
1.5.1 Effects of changes in income and prices on consumer optimum

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 1.5.1.1 Changes in income: income consumption curve and the Engel curve
1.5.1.2 Changes in price: price consumption curve (PCC)
1.5.2 Decomposition of income and substitution effects (normal, inferior or giffen
goods)
1.5.3 Derivation of market demand curve
1.6 Elasticity of demand
Chapter Two : The Theory of Production

2 .1 Production function
Weeks 4 and 5 2.2. Stages and laws of production
2.3 The law of variable proportions
3.2.2. 2.4 Laws of returns to scale
2.5 Choice of optimal combination of factors of production
2.6 Short run and long run production functions

Chapter Three: Theory of Costs

3.1. Definition and types of costs

3.2 Short-run costs

Weeks 6 and 7
3.3 Long-run costs

3.4 Derivation of cost functions from production functions

3.5 Dynamic changes in costs- the learning curve

Chapter Four: Perfect Competition Market

4.1 The concept of market in physical and digital space (e.g. Amazon, Alibaba,etc..)

Weeks 8 and 9 4.2 The welfare costs, benefits of e-markets and their implication for regulatory
mechanisms

4.3 Competitive markets, short- run equilibrium of the firm, industry, and market

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 4.4 The long-run equilibrium of the firm, industry and market

Chapter Five: Pure Monopoly Market

5.1 Characteristics and source of monopoly
5.2 Short run and long-run equilibrium
Weeks 10 and
5.3 Price discrimination
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5.4 Multi-plant monopolist
5.5 Social cost of monopoly power
Chapter Six: Monopolistic Competition
6.1. Assumptions
6.2. Product differentiation, the demand curve and cost of the firm
Weeks 12 and 6.3. The concept of industry and product ‘group’
13 6.4. Short-run and long-run equilibrium of the firm excess capacity and welfare
loss
6.5. Brief introduction to oligopoly markets
Chapter Seven: Fundamentals of macroeconomics
Weeks 14, 15 and 7.1The concepts of GDP and GNP
16 7.2 Approaches of measuring national income (GDP/GNP)
7.3 Other social accounts (GNP, NNP, NI, PI and DI)
7.4 Nominal versus real GDP
7.5 The GDP deflator and the consumer price index
7.6 GDP and welfare
7.7 The business cycle
7.8 Unemployment and inflation
7.9 Technology (.e.g. Robots) and unemployment
7.10 Role of exchange rate, terms of trade, and other external shocks
7.11 Brief introduction to the Ethiopian Economy

VIII. Course Teaching Methodology

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The course will involve deploying different teaching methods that attempt to make the
teaching-learning process as effective as possible. For most part of the course, delivery
method will be arranged as to make the process student-centered. There shall be full and
active participation from students and they are strongly encouraged to ask questions, to
reflect on brain-storming queries, and be involved actively and attentively in take-home
assignments and peer discussions that appear during the semester both within and outside
class-room sessions.

While there is no limit to the imagination and flexibility of the instructor, the course
delivery techniques will generally involve the following items:

 Lecture
 Brain-storming sessions
 Group discussions
 Individual and group assignments

IX. Assessment Methodology

Students will be evaluated on different mechanisms some of which are planned and
others could be without announcement that include quizzes. Student evaluation will also
include periodic tests and final exam. Marks will be allocated according to the following
grading schedule.
Assessment method Weight
Assignment (Individual and group) 20%
Quizzes 10%
Tests 20%
Final Exam 50 %
Total 100%

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o Preparedness: You must come to class prepared by bringing with you the appropriate
materials like handouts, worksheets and exercises given, text books and completed
assignments. Complete the individual and group assignments and other activities on time. You
must plan your own learning through reading various course related materials and chapters in
books. You are expected to work much individually to meet the requirement of the course.
You have to use your time for group work and home study effectively.
o Participation: Make active participation during discussions (you must participate in class).
You are not participating if you are simply talking to a friend, doing homework, daydreaming,
or not doing what the rest of the class is doing. If you are working in a group or with a partner,
you must talk to your group members or partner and be a part of the group. Always be ready
and willing to give constructive feedback to partners’/group members and to listen to their
comments on your work
o Medium: Use only English, which is the medium of instruction, especially in the class room

XI. Policy of University:

o Attendance: It is compulsory to come to class on time and every time. If learners are going
to 85% during the term, they should not take this course
o Assignments: Learners must do their individual and group assignments and submit on time.
Any assignments will be submitted on and before the specified deadline.
o Tests/Quizzes: Learners have short quizzes and tests almost every unit. If they miss the class
or, are late for class, they will miss the quiz or test and no makeup test or quizzes will be given
for late arrivals. Therefore, learners are expected to comply with the rules and the regulations
of the University as well.
o Cheating: Learners must do their own work and not copy and get answers from someone
else. When learners are in class, there are strictly forbidden from chewing gum, consuming
any addictive substances, listening to recorders or CD players, or being involved in acts that
interrupt the normal teaching-learning process. Besides, learners are required to switch off
their cell phones before class and exam sessions. Learners who attempt to disobey these rules
and regulations will be subject to disciplinary measures accordingly to the Senate Legislations
of the University.

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X. Commitments of Instructor & Learners

X. READINGS AND TEXTS

1. A. Koutsoyiannis, Modern Microeconomics

2. D.N.Dwivedi, 1997, Micro Economic Theory, 3rd Ed., Vikas Publishing
3. R.S. Pindyck& D.L. Rubinfeld,Microeconomics.
4. Hal R. Varian, Intermediate Microeconomics: A Modern Approach, 6th Ed.
5. C.L.Cole, Micro Economics: A Contemporary Approach.
6. Ferguson & Gould’s, 1989, Microeconomic Theory, 6th Ed.
7. N.GregoryMankiw, 2007, Macroeconomics 4th edition
8. William H. Branson, 2006 Macroeconomic Theory and Policy

Prepared by: Name University of Participant

1. Wondemhunegn Ezezew (PhD) Gondar University
2. Mr. Tarekegn Bulado Hawassa University