Economic Analysis I


Course website: http://elearning.socadm.duth.gr/moodle/

Description and Aims:

In this course presented are at an introductory level the basic concepts, methods and tools used by economists when investigating the central problems of modern societies. It focuses on microeconomic analysis issues, as developed within the paradigm of neoclassical theory, which currently dominates the field. The microeconomic analysis focuses on the examination of the decisions made by economic units (individuals, households, enterprises, and the public sector) for the production, distribution and consumption of specific goods.

This course provides also a brief overview of the historical evolution of economic thought and the key alternative theoretical approaches that developed especially in the 19th and 20th century. This historical perspective provides students with the opportunity to evaluate and critically approach the structure of the main arguments and conclusions of modern Microeconomic Analysis.

Outline:

• Economic theory. Basic concepts. Brief historical overview and main schools of thought. Economic science and economy. Positive and normative economics. Microeconomic and Macroeconomic approach.

• Economic models and theories. Economic data, diagrams and measurements. Index numbers and inflation. Nominal and real variables.

• Mixed economy and the role of the state.

• Basic concepts in microeconomic analysis. Demand and supply of goods. Factors affecting the demand and supply (of goods and production factors). The role of the market. Prices and market equilibrium. Substitutes and complements. Changes in demand and supply. Graphic representations. Excess supply and excess demand. Shifts in supply and demand curves.

• Price elasticity of demand and supply, income elasticity of demand, cross price elasticity. Definitions and types of elasticity. Normal and inferior goods. Luxuries and necessities. Total expenditure on a good (and total revenue of producer) for changing prices. Short-run and long-run elasticity.

• Consumer choice and budget constraint. Indifference curves.

• Organization of business and production. Product, costs, revenues, profits. Calculation of marginal cost from total cost. Supply curve of the firm and the market. Long term and short term. Calculation of marginal revenue. Output level profit maximization.

• Market structure and competition (perfect competition, imperfect competition, monopoly). Perfect competition: conditions, demand curve. Pure monopoly: conditions, demand curve. Imperfect competition and demand curves. Oligopoly and monopolistic competition: conditions and effects.

Learning Outcomes:

Upon completion of the course students should be able to:

• understand the assumptions and basic tools and methods of economic analysis in exploring contemporary social problems

• understand the mechanism and operation of the free market in accordance with the neoclassical model.

• understand the factors that shape the supply and demand of goods and the factors of production.

• calculate the quantitative dimensions of the supply and demand of goods.

• critically approach the neoclassical microeconomic theory.

Assessment:

A written examination at the end of the semester (100%).
Supplementary assessment (written course work) in consultation with the staff (+20%). The grade of each assessment method, written examination and written course work, should be 5 or more.

Bibliography

Compulsory

  • Begg D., Fischer S. & Dornbusch, R, 2005. Economics (8th edition). Maidenhead: McGraw-Hill. [In Greek: Begg D., Fischer S. & Dornbusch, 2006. Εισαγωγή στην Οικονομική. Τόμος Α΄. Αθήνα: Εκδόσεις Κριτική].
  • Mankiw, G.N. & Taylor, M.P., 2006. Economics, Mason/Ohio: Thomson South-Western. [In Greek: Mankiw, G.N. & Taylor M.P., 2010. Αρχές Οικονομικής Θεωρίας. Τόμος A’. Αθήνα: Εκδόσεις Gutenberg].
  • Additional notes and exercises from the teachers will be posted on the course website.

Optional

  • Bowles, S. & Edwards, R., 1985. Understanding Capitalism. New York: Harper &Row. [In Greek: Bowles, S. & Edwards, R. 2000. Κατανοώντας τον Καπιταλισμό. Τόμος Α΄. Αθήνα: Gutenberg].
  • Ferguson, K., 2001, Essential Economics. Palgrave Macmillan. [In Greek: Ferguson, K., 2004. Βασικές Αρχές Οικονομικής Θεωρίας. Αθήνα: Εκδόσεις Κριτική].
  • Heilbroner, R.L., 1999. The Worldly Philosophers (7th edition). Simon & Schuster. [In Greek: Heilbroner, R.L., 2000. Οι Φιλόσοφοι του Οικονομικού Κόσμου. Αθήνα: Εκδόσεις Κριτική].
  • Heilbroner, R.L. και Thurow, L.C., 1981. Understanding Microeconomics, 5th Edition. New Jersey: Prentice Hall. [In Geek: Heilbroner, R.L. και Thurow, L.C., 1984. Για την Κατανόηση της Μικροοικονομικής. Αθήνα: Εκδόσεις Παπαζήσης.]
  • Robinson, J. και Eatwell, J., 1977. An introduction to Modern Economics, London: Routledge and Kegan Paul. [In Greek: Robinson, J. και Eatwell, J., 1973. Εισαγωγή στη Σύγχρονη Οικονομική. Αθήνα: Εκδόσεις Παπαζήση].
  • Πετραλιάς, Ν.Σ., 1991. Πολιτική Οικονομία Ι (Πανεπιστημιακές Παραδόσεις 1991-92). Αθήνα: Πανεπιστήμιο Αθηνών.
  • Samuelson, P. A. & Dordhaus, W. D., 1998. Economics (16th edition). Boston, Mass: Irwin/McGraw-Hill. [In Greek: Samuelson, R. A. & Dordhaus, W. D., 2000. Οικονομική. 16η διεθνής έκδοση. Τόμος Α΄. Αθήνα: Εκδόσεις Παπαζήση].
  • Σταμάτης, Γ., 1991, Νεοκλασική Μικροοικονομική Θεωρία, Αθήνα: Εκδόσεις Κριτική
  • Varian, H. 2009. Intermediate Microeconomics (8th edition) London, New York: W. W. Norton & Company.