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Introduction to Economics

Code: 102120 ECTS Credits: 6
2024/2025
Degree Type Year
2501231 Accounting and Finances FB 1
2501232 Business and Information Technology FB 1

Contact

Name:
Judit Panadés Martí
Email:
judith.panades@uab.cat

Teaching groups languages

You can view this information at the end of this document.


Prerequisites

To make a good track of this course it is recommended that students have a minimum knowledge of basic mathematics (functions in one variable and its representation, differentiation, and systems of equations). The previous mathematical tools will prove very convenient in order to properly solve problem sets and other related exercises.


Objectives and Contextualisation

The course introduces the basic concepts and methodology that we use in modern economic analysis. These tools will help us to begin the study of a wide range of phenomena which are interesting from the standpoint of economics. The course material is structured in a first part of Microeconomics and in a second part of Macroeconomics. The Microeconomics part introduces key concepts such as "opportunity cost", "efficiency", "market" and "production function", and studies various aspects of decision making by firms and their behavior in different market arrangements. The Macroeconomics part presents some basic concepts related to the National Accounting, and various economic aggregates. It also introduces the temporal dimension in decision making, and studies the predictions of some simple models with respect to economic activity at the aggregate level. The course also introduces some policy instruments, such as taxes and subsidies, and discusses basic aspects regarding fiscal policy and monetary policy. The ultimate goal of course is, therefore, to offer a broad perspective of economic issues and methods to successfully face the prospect of economic studies. Specifically, the objectives that are intended to be achieved are:
 
     1. Introduction of basics concepts of microeconomics. 
     2. Understand the concepts of market, law of supply and demand, classification of goods, and various forms of elasticity. 
     3. Taxation and its effects. Loss of efficiency (deadweight loss). 
     4. Different types of markets depending on the degree of competition. 
     5. Main aggregate economic magnitudes. 
     6. Savings and investment decisions. 
     7. Aggregate demand and aggregate supply. 
     8. Brief introduction to monetary policy and fiscal policy. 

Learning Outcomes

  1. CM02 (Competence) Evaluate the main inequalities and discrimination based on sex/gender present in society.
  2. CMU01 (Competence) Identify the social, economic, technological and environmental implications of academic-professional activities in one's own field of knowledge.
  3. CMU15 (Competence) Identify the social, economic, technological and environmental implications of academic-professional activities in the field of knowledge.
  4. KM09 (Knowledge) Describe the most remarkable technological, organisational and spatial aspects of revolutions in the field of production, emphasising organisational changes in business.
  5. KMU01 (Knowledge) Describe the benefits reaped from commerce and exchange.
  6. KMU02 (Knowledge) Identify the forces that govern demand and supply.
  7. KMU03 (Knowledge) Differentiate equilibrium effects in regimes (markets) other than competition.
  8. KMU04 (Knowledge) Identify the constituent elements of technology and coasts.
  9. KMU05 (Knowledge) Detail the main economic indicators and their components justifying their calculation and use.
  10. KMU06 (Knowledge) Identify the aspects that affect economic growth.
  11. KMU07 (Knowledge) Relate the effects of disruptions of demand and supply in closed and open economies.
  12. KMU08 (Knowledge) Describe earnings from trade and exchange.
  13. KMU08 (Knowledge) Describe the relationship between unemployment and inflation.
  14. KMU09 (Knowledge) Identify the forces that govern supply and demand.
  15. KMU10 (Knowledge) Differentiate between equilibrium effects in different competition regimes (markets).
  16. KMU11 (Knowledge) Identify the elements comprising technology and costs.
  17. KMU12 (Knowledge) Detail the main economic indicators and their components, justifying their calculation and use.
  18. KMU13 (Knowledge) Identify the aspects affecting economic growth.
  19. KMU14 (Knowledge) Relate the effects of supply and demand disturbances on closed and open economies.
  20. KMU15 (Knowledge) Describe the relationship between unemployment and inflation.
  21. SM02 (Skill) Analyse the explanatory capacity of different theoretical models of economics, in relation to their initial assumptions, taking as reference different historical cases.
  22. SMU01 (Skill) Identify the dynamic aspects of economic activity, taking as a reference the main phases of contemporary economic growth, and the main factors that have conditioned it.
  23. SMU08 (Skill) Identify the dynamic aspects of economic activity, taking as a reference the main phases of contemporary economic growth and the main conditioning factors.

Content

Theme 1: Introduction 

Objective: Learn that economics is about the allocation of scarce resources. Examine some of the tradeoffs that people face. Learn the meaning of opportunity cost and efficiency. Discuss why markets are a good, but not perfect, way to allocate resources. 

1.1 The principles of economics. 

1.2 Thinking like an economist. 

1.3 The opportunity cost efficiency. 

1.4 Interdependence and the gains from international trade. 

 

Theme 2: The market forces of supply and demand 

Objective: Examine what determines the demand and the supply for a good in a competitive market. See how supply and demand together set the price of a good and the quantity sold. Analyze the causes of the changes of the equilibrium market.

2.1 Demand and supply functions.

2.2 Market equilibrium.

2.3 Determinants of market demand and shifts in the demand curve.

2.4 Determinants of the market supply and shifts in the supply curve.

 

Theme 3: Elasticity

Objective: Learn the concepts of price elasticity and income elasticity for a better understanding how the quantity demanded responds to both a change in price and a change in income.

3.1 Definition of price elasticity of demand.

3.2 Interpretation of price elasticity of demand: inelastic and elastic demand.

3.3 Determinants of price elasticity of demand.

3.4 Price elasticity and revenue.

3.5 Income elasticity and cross-price elasticity of demand.

3.6 Price elasticity of supply and its determinants.

 

Theme 4: Welfare, taxes and price controls 

Objective: To introduce the concepts of consumer surplus and producer surplus and their relationship with the measure of welfare. The level of welfare associated to markets and the effects of taxes. 

4.1 Surplus (consumer and producer). Welfare measures. 

4.2 The effect of taxes and their incidence. 

4.3 Deadweight loss. 

4.4 Maximum and minimum prices. A view to the labor market.

 

Theme 5: The firm: cost curves and production. 

Objective: To define the concepts of production function and to analyze the different types of costs (and cost functions).

5.1 Objective of the firm. 

5.2 Production and technology. Marginal product and returns to scale.

5.3 Cost curves: total cost, average cost and marginal cost.

5.4 Short- and long-run cost curves.

5.5 The firm’s output decision.

 

Theme 6: Market Structure. 

Objective: To define several market structures in terms of competition. Study how the supply curve is determined when there are a large number of firms supplying the same good. Show how the market equilibrium is determined in perfect competition.

6.1 The behavior of firms according to the degree of competition in the markets. 

6.2 The competitive firm.

6.3 The profit maximization of a competitive firm.

6.4 Output decision in the long- and short-run.

6.5 Competitive firm supply curve.

6.6 Industry supply curve.

 

Theme 7: Aggregate magnitudes 

Objective: To introduce fundamental economic aggregates and its measure. Learn how gross domestic product (GDP) and consumer price index (CPI) are defined and calculated. Learn about how to measure unemployment. 

7.1 Macroeconomic aggregates. Index of prices and inflation.

7.2 Unemployment and its natural rate. The flows in the labor market.

7.3 Level of economic activity, wealth, per capita income, others indicators of welfare. GDP deflator. Variables in nominal terms and in real terms.

7.4 National accounts: some important identities.

 

Theme 8: Consumption, savings and investment. 

Objective: To analyze how the aggregate demand and aggregate supply are determined either in the short-run or long-run. 

8.1 The aggregate demand and shifts.

8.2 The aggregate supply, determinants and shifts.

8.3 Macroeconomic equilibrium in the short-run.  

8.4 Macroeconomic equilibrium in the long-run.   

 

Theme 9: Economic policies: monetary and fiscal policy 

Objective: Analyze how fiscal policy affects interest rates and aggregate demand. Introduction to monetary policy: controlling the amount of money and its effect on the price level. 

9.1 Instruments of fiscal policy and the multiplier effect of the fiscal policy in a simple macroeconomic model. 

9.2 Taxes and government expenditures. Limits of public debt. 

9.3 Instruments of monetary policy. Money market equilibrium.

9.4 The monetary policy and the inflation rate. 


Activities and Methodology

Title Hours ECTS Learning Outcomes
Type: Directed      
Exercises and other tasks 17 0.68
Theorethical lectures 32.5 1.3
Type: Supervised      
Tutorials and work monitoring 5 0.2
Type: Autonomous      
Solving problem sets 15 0.6
Student work 72 2.88
Texbook reading 4 0.16

In this course we combine lectures with ICT support, together with several applied sessions devoted to solving problem sets and lists of exercises. We will eventually propose several readings, as well as case studies using real data. We plan to have all the teaching on campus. 

Annotation: Within the schedule set by the centre or degree programme, 15 minutes of one class will be reserved for students to evaluate their lecturers and their courses or modules through questionnaires.


Assessment

Continous Assessment Activities

Title Weighting Hours ECTS Learning Outcomes
Final exam 50% of the final mark 2 0.08 KM09, KMU01, KMU02, KMU03, KMU04, KMU05, KMU06, KMU07, KMU08, KMU09, KMU10, KMU11, KMU12, KMU13, KMU14, KMU15, SM02, SMU01, SMU08
Other evaluation activities 20% of the final mark 1.25 0.05 CM02, CMU01, CMU15, KM09, KMU01, KMU02, KMU03, KMU04, KMU07, KMU08, KMU09, KMU10, KMU11, KMU14
Partial exam 30% of the final mark 1.25 0.05 KMU01, KMU02, KMU03, KMU04, KMU07, KMU08, KMU09, KMU10, KMU11, KMU14

This subject/module does not offer the option for comprehensive evaluation. There will be a continuous evaluation of the course through partial evaluations and a final exam. The weight of each of the previous components in the calculation of the final grade is as follows:

a) 50% for final exam 

b) 50% for partial evaluation activities (30% a partial exam and 20% other evaluation activities)

Partial evaluation activities: The objective of these activities is to facilitate the learning of the material by studying relatively small quantities of material rather than forcing the student to learn a lot of material for only one exam. One of the activities consist of a midterm exam, which counts for a 30% of the final grade, in which it will not be allowed to consult any reference/support materials, and the maximum resolution time will be 75 minutes. The rest of partial evaluation activities will be managed by the teacher. You will be able to use a calculator, but under no circumstances you will be allowed to use the cellular phone. 

Final Exam: It includes all the materials of the course. The exam is designed so that students are forced to make the last effort that is required to consolidate the knowledge already acquired. The maximum resolution time is 2 hours and 15 minutes. During the exam it will not be allowed to consult any reference/support materials. You will be able to use a basic calculator, but under no circumstances you will be allowed to use the cellular phone.

Hence the double assessment system aims to ensure the success in the learning process of the largest number of students. Additionally it is advisory to solve problem sets and other home-works that will be provided in advance during the developing of the course. The purpose of problem sets is to put at work the concepts and results developed during the lectures. Home works using real data can, eventually, be proposed in order to provide a more complete overview of the issues being studied.

All students are required to performthe evaluation activities. The grade of the course is computed by applying the aforementioned weights. In case the grade is equal to or above 5, it is considered that the course requirements are satisfied and hence it cannot be the subject of a new assessment. In the case the grade is below to 3,5, the student must re-take the course the following year. For those students who have obtained a grade that is equal to or greater than 3,5, but smaller than 5, there will be a second chance exam (re-take exam). The coordinator of the course will decide, and announce in due time, the format of the second chance exam. The second chance exam is scheduled in the last week of the semester. The grade of the second chance exam will be qualitative with only two options: PASS or NO PASS. If a student gets a grade of PASS in the second chance exam his final grade in the subject will be 5. If a student gets a grade of NO PASS in the second chance exam his final grade will be the one obtained before the second chance exam.

Students not participating in any activities subject to evaluation are considered "Non-Evaluable". Therefore, it is considered that a student who performs any of the continuous assessment components can no longer be eligible for a "Non-Evaluable”.

Exceptionally and with the aim of motivating students' participation in activities related to the course,  an individual bonus of maximum 0.5 points (including all activities) can be given to the final grade of the subject (before the retake exam). The criteria and conditions for obtaining this bonus must be published ex-ante on the virtual campus. Obtaining this bonus implies that students will have to submit some type of document or quiz to show that they have achieved the objective of the activity. These teaching activities will be carried out outside the class schedule. The implementation of the bonus, if applicable, must be previously approved by the subject coordinator.

Calendar of evaluation activities

The dates of the evaluation activities (exercises in the classroom, questionnaires ...) will be announcedwell in advance during the semester.

The dates of both the partial exam and the final exam will be scheduled in the assessment calendar of the Faculty.

"The dates of evaluation activities cannot be modified, unless there is an exceptional and duly justified reason why an evaluation activity cannot be carried out. In this case, the degree coordinator will contact both the teaching staff and the affected student, and a new date will be scheduled within the same academic period to make up for the missed evaluation activity." Section 1 of Article 115. Calendar of evaluation activities (Academic Regulations UAB). Students of the Faculty of Economics and Business, who in accordance with the previous paragraph need to change anevaluation activity date must process the request by filling out an Application for exams' reschedule

https://eformularis.uab.cat/group/deganat_feie/nou-reprogramacio-de-proves 

Grade revision process

After all grading activities have ended, students will be informed of the date and way in which the course grades will be published. Students will be also informed about the procedure, place, date and time of grade revision following University regulations.

 Retake Process

"To be eligible to participate in the retake process, it is required for students to have been previously been evaluated for at least two thirds of the total evaluation activities of the subject." Section3 of Article 112 ter. The recovery (UAB Academic Regulations). Additionally, it is required that the student to have achieved an average grade of the subject higher or equal to 3.5 and strictly lower than 5.

The date of the second chance exam will be posted in thecalendar of evaluation activities of the Faculty. 

Irregularities in evaluation activities

In spite of other disciplinary measures deemed appropriate, and in accordance with current academic regulations, "in the case that the student makes any irregularity that could lead to a significant variation in the grade of an evaluation activity, it will be graded with a 0, regardless of thedisciplinary process that can be instructed. In case of various irregularities occur in the evaluation of the same subject, the final grade of this subject willbe 0".Section 10 of Article 116. Results of the evaluation. (UAB Academic Regulations).


Bibliography

Bibliography 
 
The reference manual for the course is: 
 
-Krugman, P., Wells, R., i Graddy, K., Essentials of Economics. Palgrave Macmillan.
 
It is a basic manual introductory to economics which analyzes issues in both microeconomics and in macroeconomics. The text is well organized, with detailed explanations and examples and allows the reader to concentrate on the fundamental aspects of the issues at hand. Furthermore, most chapters contain case studies that demonstrate how to apply the theoretical concepts. 
 
More Texbooks
There are many good texts that may eventually be used to complement class notes and explanations given by the teacher. Some of them are the following:
 
-  G. Mankiw, "Principles of Economics" Ed. Mc Graw-Hill. Texbook based on real case studies, applications and examples.
 
- Samuelson, P. and Nordhaus, W. "Economics" McGraw-Hill Ed. This manual is very similar to the reference manual but it offers additional explanations from a slightly different point of view, with more current references to real problems of specific economies. 
 
- Dornbush, R. & Fisher, S. "Macroeconomics" McGraw-Hill Ed. This manual presents an approach to the study of macroeconomics at an affordable level but substantially more advanced than the basic manual. 
 
- Begg, D., Dornbush, R. & Fisher, S., "Economics" McGraw-Hill Ed. This is a manual widely accepted and it has become a good reference to take into account within texts and manuals that introduce students to the study of economics for the first time. It is a complete and affordable text issues where both microeconomics and macroeconomics are discussed. It contains many examples that help the reader better understand the theoretical concepts. 
 
- Varian, Hal R., "Intermediate Microeconomics" Ed A. Bosch. This manual focuses only on the analysis of issues related to microeconomics. The analysis is rather more formal and complex. It can be a good supplement for those students who want to go deeper into these issues. 
 
Other manuals 
Mochón, F. "Principles of Economics" McGraw-Hill Ed
Wonnacott & Wonnacott, "Economy" Ed McGraw-Hill
Frank & Bernanke, "Principles of Economics" McGraw-Hill Ed 
 
Web Links 
International Monetary Fund (IMF): http://www.imf.org/external/esl/index.asp
Bank of Spain (BE): http://www.bde.es
European Central Bank (ECB): http://www.ecb.int/home/html/lingua.es.html
National Institute of Statistics (INE): http://www.ine.es

Software

In order to fully follow this course, it is recommended to have a basic knowledge of Excel and Word applications.


Language list

Name Group Language Semester Turn
(PAUL) Classroom practices 101 Catalan first semester morning-mixed
(PAUL) Classroom practices 201 Catalan first semester morning-mixed
(PAUL) Classroom practices 501 Catalan first semester afternoon
(TE) Theory 10 Catalan first semester morning-mixed
(TE) Theory 20 Catalan first semester morning-mixed
(TE) Theory 50 Catalan first semester afternoon