Introduction of Economics 4003-112pe

1. Economics – the subject and methods of economic analysis
A/ Fundamental issues of Economics
B/ Economic assets, opportunity costs, limited resources, scarcity
C/ Problems of economic choice.
2. Production Possibilities Curve (PPC)
A/ Linear and arched Production Possibilities Curves
B/ Choice between investment and consumption
C/ Shifts in the Production Possibilities Curve.
3. The market
A/ Demand, supply and their determinants, the law of supply and demand, graphic analysis
B/ Market equilibrium, static and dynamic analysis
C/ Market equilibrium price, minimum price and maximum price.
4. Degree of buyers’ responsiveness to price changes
A/ Price elasticity of demand (PED)
B/ Graphic and economic analysis of the coefficient of cross elasticity of demand.
5. Degree of buyers’ responsiveness to changes in income and prices of other goods
A/ Income elasticity of demand (IED)
B/ Mixed elasticity of demand
C/ Elasticity of supply
D/ Interpretation of elasticity coefficients.
6. Fundamentals of consumer economic decisions
A/ The concept of utility – problems of rational choice
B/ Indifference curve and its characteristics
C/ Budget constraint line
D/ Consumer equilibrium.
7. Effect of income and price changes on consumer economic decisions
A/ Price-consumption curve
B/ Income-consumption curve
8. Production functions
A/ Two-function production function - / isoquant, isocost / - selection of production techniques
B/ One-factor production function / total product, average product, marginal product.
9. Costs in the business – short-term analysis
A/ Fixed costs, variable costs, total costs
B/ Average costs and marginal cost
C/ Graphic analysis of short-term costs.
10. The business operating in a perfect competition market
A/ Assumptions of perfect competition market
B/ Price, average and marginal revenues
C/ Profit maximization and loss minimization in a business
D/ Effects of changes in market demand on the position of a business.
11. Pure Monopoly Market
A/ Assumptions of pure monopoly market
B/ Total revenue, average revenue, marginal revenue in a monopoly
C/ Monopoly price and production output volume
D/ Perfect and imperfect price differentiation in a monopoly
12. Imperfect competition market
A/ Assumptions of oligopoly market
B/ Concepts of price leadership in an oligopoly
C/ The "kinked demand curve” model in an oligopoly
D/ Assumptions of monopolistic competition market
D/ Equilibrium in a monopolistic competition market
13. Input markets
A/ Labour market – demand and supply in a labour market
B/ Equilibrium in a free-competition labour market
C/ Employer cartel and monopsony in a labour market
D/ Natural resources market. The category of economic rent.
14. National income account / GDP, GNP, CRF, DN, DO, YD, calculation methods, GDP – real and nominal approach, deflator, GDP at market prices and input markets, income method, expenditure method, GDP, GNP and standard of living. Overview of macro-aggregates using an example of statistical data.
15. Determinants of national income / circular flow, components of aggregate demand – consumer demand, capital expenditures, global demand, equilibrium point production, MPC, MPS, multiplier, paradox of thrift.
16. Circular flow in a 3-agent closed economy / state participation in the circular flow, the effect of state spending and taxes on the production output, state budget, public debt and deficit, automatic stabilizers.
17. The effect of foreign trade on national income / net exports and equilibrium income, multiplier in an open economy, model of a 3-agent open economy.
18. Money and its functions / origins of the banking system, the modern banking system, commercial banks and money supply, the monetary base and money creation multiplier.
19. The central bank and monetary system / the central bank and money supply, the demand for money, control of the money supply, objectives and tools of monetary policy.
20. Monetary and fiscal policies in a closed economy / dampening effect, crowding out effect, money, interest rate and global demand, expansive and restrictive monetary and fiscal policies.
21. Fundamental macroeconomic problems – unemployment / structure of unemployment, types of unemployment, natural rate of unemployment, private and social cost of unemployment.
22. Fundamental macroeconomic problems – inflation / types of inflation, inflation, money and the budget deficit, short- and long-term Phillips curve, methods of fighting inflation.
23. International trade and trade policy / geographic and commodity structure of world trade, comparative advantage, economic aspects of custom duties and subsidies, other trade policy measures.
24. International monetary system / gold standard, fixed and variable exchange rates, the European Monetary System.

Student's workload:
lecture - 30 h
preparation to the lecture - 30 h
preparation to the examination - 30 h
total - 90 h