HONG KONG SHUE YAN UNIVERSITY Department of Economics and Finance (Fall 2009 / Winter 2010)

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1 HONG KONG SHUE YAN UNIVERSITY Department of Economics and Finance (Fall 2009 / Winter 2010) Course Title : Principles of Economics Course Code : ECON Year of Study : 1 Number of Credits : 3 Duration in Weeks : 13 Contact Hours Per Week : Lecture (2 hours) Group Session (1 hour) Pre-requisite Course(s) : Nil Instructors : Dr. Shu-kam Lee (Coordinator) Office No.: LG 538 Tel. No.: , sklee@hksyu.edu Dr. Joe F. K. Wong Office: LG 539 Tel. No: Ext. 230; joewong@hksyu.edu Website: Dr. Raymond W. M. Yeung, Office: LG 211 Tel. No: wmyeung@hksyu.edu Course Aims This course presents economic principles not only as a mere body of knowledge but also a method enabling students to understand current economic problems. It also equips students with ability to apply the economic theories to real-world economic problems. Course Intended Learning Outcomes, Teaching and Learning Activities, and Assessment Tasks Course Intended Learning Outcomes Upon completion of this course, students should be able to: C1 define and describe basic economic terms, variables and concepts; C2 C3 C4 identify and outline economic problems; apply basic economic concepts to real-world economic problems; demonstrate mastery of different types of generic skills including collaboration skills, communication skills, critical thinking skills, problem-solving skills, self-management skills and study skills. 1

2 Teaching and Learning Activities The following teaching and learning activities are designed for this course to achieve the intended learning outcomes mentioned above. About 2/3 of the contact hours are allocated to lectures and the remaining contact hours are allocated to various learning activities. TL1 Lecture: Lectures are designed to introduce students to the theoretical concepts and methods of studying economics. TL2 Small Group Discussion: Students are divided into groups to help them understand the main concepts in the lectures and to discuss some current economic issues. TL3 Exercise: Exercises are provided to help students understand the theoretical concepts and economic problems. TL4 Term Paper (in groups): Term paper is used to enhance students abilities to apply basic concepts and theories to analyze the real-world economic problems. TL5 Presentation: Presentation is used for students to demonstrate their understanding of the content of the term paper and provide chances for them to practice their presentation skills. TL 6 Web-based Questions: Web-based Questions is designed for students to demonstrate their understanding of the theoretical concepts and economic problems through real time questions and answers. Assessment Tasks Continuous Assessment: A1 Attendance and Participation 5% A2 Quizzes 20% A3 Term Paper 15% A4 Presentation 10% Final Assessment: A5 Writing Examination 50% Total 100% Alignment of Course Intended Learning Outcomes, Teaching and Learning Activities, and Assessment Tasks Course Intended Teaching and Learning Learning Outcomes Activities Assessment Tasks C 1 TL 1, 3, 6 A 1-2 C 2 TL 2, 3, 6 A 1-3 C 3 TL 2, 4-6 A3-5 C4 TL4-5 A1, 3-4 Course Content 2

3 ECON. 101 Principles of Microeconomics (Fall Semester) Week No. Topic 1 Introduction a. Course Introduction: Microeconomics b. The Economic Perspective c. Theories, Principles, and Models d. Microeconomics and Macroeconomics e. Individuals Economizing Problem f. Society s Economizing Problem Principal Reading: T: Ch. 1. Supplementary Reading: Mankiw (2009): Ch Production Possibilities Model and Graphical Method a. Production Possibilities Model b. Law of Increasing Opportunity Costs c. Application of Production Possibilities Curve d. Graphs and Their Meaning Principal Reading: T: Ch. 1. Supplementary Reading: Mankiw (2009): Ch The Market System and the Circular Flow a. Economic Systems b. The Demise of the Command Systems c. Characteristics of the Market System d. Five Fundamental Questions e. The Circular Flow Model Principal Reading:T: Ch Demand, Supply, and Market Equilibrium a. What is a Market? b. Demand c. Supply d. Market Equilibrium and Analysis Method e. Government Price Controls Principal Reading: T: Ch. 3. Supplementary Reading: Mankiw (2009): Ch. 4 and 6. 5 Elasticity, Consumer Surplus and Producer Surplus a. Price Elasticity of Demand b. Price Elasticity of Supply c. Cross Elasticity and Income Elasticity of Demand d. Consumer and Producer Surplus 3

4 Principal Reading: T: Ch. 6. Supplementary Reading: Mankiw (2009): Ch. 5 and 7. 6 The Costs of Production a. Economic Costs b. Short-Run Production Relationship c. Short-Run Production Costs d. Long-Run Production Costs Principal Reading: T: Ch.8. Supplementary Reading: Mankiw (2009): Ch Public Goods, Externalities and Information Asymmetries a. Public Goods b. Externalities c. Information Failures Principal Reading: T: Ch.16. Supplementary Reading: Mankiw (2009): Ch Pure Competition a. Four Market Model b. Characteristics of Pure Competition c. Profit Maximization in the Short Run d. The Supply Curve in a Competitive Market e. Profit Maximization in the Long Run f. Pure Competition and Efficiency Principal Reading: T: Ch.9. Supplementary Reading: Mankiw (2009): Ch Pure Monopoly a. Characteristics of Pure Monopoly b. Barriers to Entry c. Monopoly Demand d. Output and Price Determination e. Economic Effects of Monopoly Principal Reading: T: Ch.10. Supplementary Reading: Mankiw (2009): Ch Monopolistic Competition a. Characteristics of Monopolistic Competition b. Price and Output in Monopolistic Competition c. Monopolistic Competition and Efficiency Principal Reading: T: Ch.11. Supplementary Reading: Mankiw (2009): Ch Oligopoly 4

5 a. Characteristics of Oligopoly b. Oligopoly Behavior: A Game-Theory Overview c. Oligopoly and Efficiency Principal Reading: T: Ch.11. Supplementary Reading: Mankiw (2009): Ch Wage Determination a. General Level of Wages b. A Purely Competitive Labor Market c. Monopsony Model d. The Minimum-Wage Controversy Principal Reading: T: Ch.13. Supplementary Reading: Mankiw (2009): Ch. 19 and Presentation of the Term Paper 5

6 ECON. 102 Principles of Macroeconomics (Winter Semester) Course Content Week No. Topic 1 Measuring Domestic Output and National Income a. Course Introduction: Macroeconomics b. Gross Domestic Product c. The Expenditures Approach d. Nominal GDP versus Real GDP e. Shortcoming of GDP Principal Reading:T: Ch. 24. Supplementary Reading: Mankiw (2009): Ch Economic Growth a. The Concept of Economic Growth b. Modern Economic Growth c. Institutional Structures that Promote Growth d. Ingredients of Growth e. Production Possibilities Analysis f. Accounting for Growth Principal Reading: T: Ch. 25. Supplementary Reading: Mankiw (2009): Ch Business Cycles, Unemployment and Inflation a. The Concept of the Business Cycle b. Indentifying Unemployment c. Indentifying Inflation d. Redistribution Effects of Inflation e. Does Inflation Affect Output? Principal Reading: T: Ch. 26. Supplementary Reading: Mankiw (2009): Ch. 28, 30 and Aggregate Demand and Aggregate Supply a. Aggregate Demand and Changes in Aggregate Demand b. Aggregate Supply and Changes in Aggregate Supply c. Equilibrium and Changes in Equilibrium d. Ratchet Effect Principal Reading: T: Ch. 29. Supplementary Reading: Mankiw (2009): Ch Fiscal Policy, Deficits, and Debt a. Fiscal Policy and the AD-AS Model b. Built-in Stability 6

7 c. Evaluating Fiscal Policy d. Problems, Criticisms, and Complications e. The Public Debt f. False Concerns g. Substantive Issues Principal Reading: T: Ch. 30. Supplementary Reading: Mankiw (2009): Ch Money and Banking a. The Functions of Money b. The Components of the Money Supply c. What Backs the Money Supply d. The Federal Reserve and the Banking System e. Recent Development in Money and Banking Principal Reading: T: Ch.31. Supplementary Reading: Mankiw (2009): Ch Money Creation a. The Fractional Reserve System b. A Single Commercial Bank c. Money-Creating Transaction of a Commercial Bank d. The Banking System: Multiple-Deposit Expansion Principal Reading: T: Ch.32. Supplementary Reading: Mankiw (2009): Ch Interest Rate and Monetary Policy a. The Concept of Interest Rate b. Targeting the Federal Fund Rate c. Tools of Monetary Policy d. Monetary Policy, Real GDP, and the Price Level e. Monetary Policy: Evaluation and Issues Principal Reading: T: Ch.32. Supplementary Reading: Mankiw (2009): Ch Financial Economics a. Financial Investment b. Present Value: Measuring the Time Value of Money c. Some Popular Investments d. Arbitrage and Managing Risk e. The Security Market Line Principal Reading: T: Ch.34. Supplementary Reading: Mankiw (2009): Ch International Trade a. The Economic Basis for Trade 7

8 b. The Concept of Comparative Advantage c. Supply and Demand Analysis of Exports and Imports d. Trade Barriers e. The Case for Protection: A Critical Review f. The World Trade Organization Principal Reading: T: Ch.37. Supplementary Reading: Mankiw (2009): Ch. 9 and The Balance of Payments, Exchange Rates, and Trade Deficits a. International Financial Transactions b. The Concept of the Balance of Payments c. The Exchange Rate Systems d. Recent U.S. Trade Deficits Principal Reading: T: Ch.38. Supplementary Reading: Mankiw (2009): Ch Presentation of the Term Paper Resources Textbook: McConnell R. C., Brue L. S. & Flynn, S. M., Economics. 18 th McGraw-Hill ed. Reading List: Frank, R. H. & Bernanke, Ben S., Principles of Economics. 4 th McGraw-Hill. ed. Harford. T., The Undercover Economist. Little Brown. Kui-Wai, Li., The Hong Kong Economy: Recovery and Restructuring. McGraw-Hill (Asia) Mankiw N. G., Principles of Economics, 5 th ed. South-Western. Riddell, T., Shackelford J., Stamos. S. & Schneider, G., Economics: A Tool for Critically Understanding Society, 8 th ed, Prentice Hall. 8