Introduction To Economics Course Outline

DepartmentM

Wolaita Sodo University

Tarcha Campus Department
of Economics
Instructors: Yonas K. (Msc)
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Course Title: Introduction to Economics Course Code: Econ 1011
Credit Hours: 3
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I. 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 theories of consumers’ and
producers’ behavior. Besides the course will also cover the neoclassical theory of product and/or
service pricing for perfectly competitive market and provide brief introduction to monopoly,
monopolistic competition, and oligopoly market structures. The second major part of the course
will discuss elements of macroeconomics such as macroeconomic goals, national income account
and its measurement, macroeconomic problems and policy instruments. In offering the course,
the real contexts Ethiopia will be thoroughly considered.
II. General objective
- The course will introduce students to the fundamental economic concepts and principles.
- Describing the major economic agents and their respective roles and objectives,
- Introducing the concepts of demand and supply and their interactions.
- Introducing students to the neoclassical theory of consumer preferences and utility
maximization approaches,
- Discuss short- run behavior of production and the related cost structure,
- Introduce the different market structures and their real world applications, and
- Equipping students with macroeconomic goals, national income accounting, economic
problems and policy instruments in light Ethiopian context.
III. Units and contents
Lecture Topic & Sub Topics of the Course
Chapter One: Introduction(6 hrs)

1. Introduction
1.1. Definition and Meaning of Economics
1.2. Rationale of Economics
1.3. Scope and methods of economic analysis
 Micro and macro economics
 Positive and normative economics
 Inductive and deductive reasoning in economics.
1.4. Scarcity, choice, opportunity cost and production possibilities frontier
1.5. Basic economic questions,
1.6. Economic systems
1.7. Decision making units and the circular flow model
Chapter Two: Theory of Demand and Supply (8hrs)
1
2.1. Theory of Demand
 Demand function, demand schedule and demand curve
 Determinants of Demand
 Elasticity of Demand
2.2. Theory of Supply
 Supply function, supply schedule and supply curve
 Determinants of supply
 Elasticity of supply
2.3. Market equilibrium
Chapter Three: Theory of Consumers’ Behavior (9 hrs)
3.1. Consumer preferences
3.2. The concept of utility
3.3. Approaches of measuring Utility
3.3.1. The cardinal utility approach
 Assumptions of cardinal utility theory
 Total and marginal utility
 Law of diminishing marginal utility (LDMU)
 Equilibrium of the consumer
3.3.2. The ordinal utility approach
 Assumptions of ordinal utility approach
 Indifference curve and map
 Properties of indifference curves
 The marginal rate of substitution (MRS)
 The budget line or the price line
 Equilibrium of the consumer
Chapter Four : The Theory of Production and Costs (8 hrs)

4. Theory of Production and Costs
4.1. Theory of production in the short run
 Definition of production
 Production function
 Total, average, marginal product
 The law of variable proportions
 Stages of production
4.2. Theory of costs in the short run
 Definition and types of costs
 Total, average, marginal costs in the short run
 Relationship between short-run production and cost curves
Chapter Five: Market structure (6 hrs)
2
5. Market structure
5.1. The concept of market in physical and digital space
5.2. Perfectly Competitive market
 Assumptions
 Short run equilibrium of the firm
 Short run equilibrium of the industry
5.3. Monopoly market
 Definition and Characteristics
 Sources of Monopoly
5.4 Monopolistically competitive market
 Definition and characteristics
5.5 Oligopolistic market
 Definition and characteristics
Chapter Six: Fundamentals of macroeconomics (with stylized facts from Ethiopia) (11 hrs)
6.1. Goals of Macroeconomics
6.2. The National Income Accounting
 Approaches to measure national income (GDP)
 Other income accounts (GNP, NNP, NI, PI and DI)
6.3. Nominal versus Real GDP
6.4. The GDP deflator and the Consumer Price Index(CPI)
6.5. The Business Cycle
6.6. Macroeconomic Problems
 Unemployment
 Inflation
 Trade deficit and budget deficit
6.7. Macroeconomic Policy Instruments
 Monetary policy
 Fiscal policy
IV. Assessment Methodology

Assessment method Weight
Assignment (individual and/or group) 20%
Tests/ quizs/mid 30%
Final Exam 50 %
Total 100%
V. Readings and texts

1. A. Koutsoyiannis, Modern Microeconomics
2. Hal R. Varian, Intermediate Microeconomics: A Modern Approach, 6th edition.
3. N. Gregory Mankiw, 2007, Macroeconomics, 4th edition..
4. Ayele Kuris, Introduction to Economics, 2001.
5. Begg, Fisher &Dornbusch, 2005, Macroeconomics, 8th Ed.
6. Liberman, Marc and Hill, Robert E, 2005, Introduction to Economics 2nd Ed.

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DepartmentM

Wolaita Sodo University

Chapter One: Introduction(6 hrs)

Chapter Four : The Theory of Production and Costs (8 hrs)

Chapter Five: Market structure (6 hrs)

IV. Assessment Methodology

V. Readings and texts

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