Course
Course Code
Credit points
FHEQ level
Prerequisites
Faculty
1a INTRODUCTION TO ECONOMICS
(to be added at later date)
30
Level 4
None
ECONOMICS
Course leader Masud Ally
DESCRIPTION
This is an introductory course which assumes no prior knowledge of economics. It is split into two components: Microeconomics and Macroeconomics.
The course equips students with an understanding of microeconomics and macroeconomics, and prepares them for Microeconomics and Macroeconomics (Level 5), as well as topics in
Applied Economics (Level 6). The objective of the course is to familiarise students with the building blocks of the subject and to cement a firm understanding of basic concepts in economics. Students should understand the intuition behind the results and be able to apply economic theory to the real world.
AIMS
The course aims to:
 Provide students with a firm foundation upon which to build their further studies in economics.
 Introduce students to modelling economic problems.
 Introduce students to fundamental concepts in economics and thereby allow them to start to ‘think like an economist’.
LEARNING OUTCOMES
On successful completion of the course, students should be able to:
Knowledge and understanding
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K1a Articulate the distinction between things which are real and nominal and why economists think in most cases people should care about real things. (K1a, K2a)
K1a, K2a Summarise and discuss fundamental ideas in economics, like opportunity cost, deadweight loss, marginal analysis and Pareto efficiency. (K1a)
K1a List and explain some basic tools of fiscal and monetary policy. (K1a)
Subject-specific skills
S1a, S3a
S1a, S2a
Undertake simple comparative statics analysis in economic models. (S1a, S3a)
Model simple problems effectively by considering which issues are important to the issue at hand and which can be safely ignored. (S1a, S2a, S3a)
Transferable skills
T1a, T2a Reflect on the challenges of, and gain practice in, presenting complex economic ideas so that they can be easily understood by a non-specialist audience. (T2a
PPE)
LEARNING AND TEACHING
This Level 4 course is taught in the Michaelmas and Hilary term with one 90-minute lecture each week and a one-hour weekly tutorial.
Lectures are interactive and students are expected to engage in discussion throughout. A revision session is held in the Trinity term.
Course information and supplementary materials are available through the Moodle VLE
‘Introduction to Economics’ page.
Students are required to attend and participate in all the formal and timetabled sessions for this course. Students are also expected to manage their directed learning and independent study in support of the assignments and tasks they are given in classes.
ASSESSMENT
Formative
Students prepare work for each weekly tutorial, which include short questions and problems.
They are given detailed feedback, but the assessment does not form part of their grade.
The objective of formative assessment is to motivate students to attempt economic theory challenges, in the form of past examination questions or similar. This enables students to assess their own ability, test their understanding of lecture material independently, and identify gaps in their knowledge.
Summative
Students are assessed by two 2-hour end-of-year unseen examinations, one for the
Microeconomics half of the course, and one for the Macroeconomics half.
Questions are typically multi-part. The first parts require the reproduction of the solution to a model which has been covered during the year. Later parts present an unfamiliar scenario to
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students which they are expected to solve using their understanding of the relevant economics, and occasionally ask the student to express a policy recommendation in nontechnical language.
All assessment is aimed at enabling students to understand the basic principles of Economics.
Later parts of questions with unfamiliar scenarios test the student’s understanding of economic modelling, and ability to present a case both in competent economic language as well as in non-technical terms.
INDICATIVE READING
Note: Comprehensive and current reading lists for courses are produced annually in Subject
Handbooks or other documentation provided to students; the indicative reading list provided below is used as part of the approval/modification process only.
Core reading
Mankiw, N.G. and Taylor, M.P. (2011), Economics, Andover: Cengage Learning.
Supplementary reading
Varian, H. (2010), Intermediate Microeconomics: A Modern Approach, London: W.W. Norton and Company.
INDICATIVE TOPICS
Microeconomics
Supply and Demand
 Introduction to Economic Modelling
 Elasticity and its Application
 Supply, Demand and Government Policies
 Consumers, Producers and the Efficiency of Markets
Economics of the Public Sector
 Externalities
 Public Goods and Common Resources
 The Design of the Tax System
Firm Behaviour and Industrial Organisation
 The Costs of Production
 Firms in Competitive Markets
 Monopoly
 Monopolistic Competition
 Oligopoly
Macroeconomics
The Data of Macroeconomics
 Measuring a Nation’s Income
 Measuring the Cost of Living
The Real Economy in the Long Run
 Production and Growth
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 Saving, Investment and the Financial System
 The Basic Tools of Finance
 Unemployment
Money and Prices in the Long Run
 The Monetary System
 Money Growth and Inflation
Short-Run Economic Fluctuations
 Keynes and IS-LM Analysis
 Aggregate Demand and Aggregate Supply
 The Influence of Monetary and Fiscal Policy on Aggregate Demand
 The Short-Run Trade-Off Between Inflation and Unemployment
INDICATIVE EXAMINATION QUESTION
A company considers a package to help employees with the running cost of their cars. It considers two options:
1) To offer a fixed amount of money towards the use of the car in addition to a costfree usage for the first X miles,
2) To participate in the actual cost of running the car (i.e. pay a certain amount A per mile used). a) Let X represent mileage of car usage, and Y all other goods. Discuss the effect of each option on an employee’s set of possible choices, and show these on relevant graphs. b) Which of the options will the employee prefer if the company decided to spend the same amount of money under the two options? On what factor(s) does your answer to this question depend? c) Critically analyse both schemes and evaluate their merits and disadvantages. Which of these schemes would you advise the company to adopt, and why? d) Explain your answer to (c) to the company using terminology that a non-economist can be expected to understand.
SUMMATIVE ASSESSMENT STRUCTURE
Assessment 1
Assessment type: Examination
Weighting: 50%
On-line submission: No
Duration: 2 hours
Length: N/A
Assessment 2
Assessment type: Examination
Weighting: 50%
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On-line submission: No
Duration: 2 hours
Length: N/A
Date of validation
Date last modified
Finally approved by the Southampton Solent
University Academic Standards and
Development Committee 19 November 2014.
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