Module Identifier EC10510  
Academic Year 2003/2004  
Co-ordinator Professor Andrew Henley  
Semester Semester 1  
Other staff Mr Nicholas Perdikis  
Mutually Exclusive EC10120  
Course delivery Lecture   22 Hours  
  Seminars / Tutorials   5 Hours  
Assessment TypeAssessment Length/DetailsProportion
Semester Exam2 Hours  100%

Learning outcomes

On successful completion of the module students will understand how markets co-ordinate economic activity and produce equilibrium prices and quantities; how to evaluate market outcomes for policy purposes; and the mutual benefit from trade between individuals and between countries. They will also have acquired an understanding of the main determinants of macroeconomic (aggregate) economic activity, its principal measures and how it changes over time. Students will also have developed an understanding of the causes of inflation and unemployment.

Brief description

An introduction to the principles underlying economics: the study of markets and the macroeconomy.


1. Introduction and Introductory Microeconomics (Professor Andrew Henley)

1.1 Introduction to Economics

Reading: Mankiw, Chaps. 1, 2 and 3
Case et al., Chaps. 1 and 2
Frank and Bernanke, Chaps. 1 and 2
Sloman, Chaps. 1 and 23

Lecture 1: What is economics?
Mankiw?s ten principles of economics

Lecture 2: Thinking like an economist
The methods economists use ? introduction to economic models
The way economists approach economics problems
Lecture 3: Interdependence, exchange and trade
Absolute and comparative advantage

1.2 Demand and Supply

Reading: Mankiw, Chaps. 4 and 5
Case et al., Chaps. 4 and 5
Frank and Bernanke, Chaps. 3, 4, and 5
Sloman, Chap. 2

Lecture 4: Individual and market demand
Individual firm and market supply
Movements along and shifts in demand and supply

Lecture 5: Market equilibrium
Comparative static analysis of changes in equilibrium

Lecture 6: Measuring the responsiveness of demand and supply - elasticity
Price elasticity of demand
Income elasticity of demand
Cross price elasticity of demand
Price elasticity of supply

1.3 Government Intervention in Markets

Reading: Mankiw, Chap. 6
Case et al., Chap. 5
Sloman, Chap. 3

Lecture 7: Price controls
Price floors
How taxes affect market equilibrium
Tax incidence

1.4 Measuring the Efficiency of Markets

Reading: Mankiw, Chaps. 7, 8 and 9
Frank and Bernanke, Chap. 7

Lecture 8: Consumer surplus
Producer surplus
Market efficiency

Lecture 9: Application: winners and losers from international trade
The effects of restricting trade

1.5 Goods which Impose Costs on Others - Externalities

Reading: Mankiw, Chap. 10
Case et al., Chap. 16
Frank and Bernanke, Chap. 11
Sloman, Chap. 12, sections 1 and 2
Lecture 10: Externalities in production and consumption
Market solutions
Government policies on externalities

1.6 The Tax System

Reading: Mankiw, Chaps. 8 and 12
Case et al., Chap. 18
Sloman, Chap. 10

Lecture 11: Tax efficiency
The deadweight loss from taxation
Income or consumption tax?
Taxes as a means of redistribution

2. Introductory Macroeconomics (Nick Perdikis)

2.1 Measuring Economic Activity

Reading: Mankiw, Chap. 23
Case et al., Chap. 21
Frank and Bernanke, Chap. 21
Sloman, Chap. 13

Lecture 12: The meaning of aggregate economic activity
National Income, output and expenditure
Cycles and growth trends

Lecture 13: Measures of economic activity: national income, expenditure and product
The black economy
Business and government

2.2 The Determinants of Macroeconomic Activity

Reading: A handout on this topic will be provided ? it is important that you consult this.
Mankiw, Chap. 25
Case et al., Chaps. 21 and 22
Frank and Bernanke, Chap. 20
Sloman, Chaps. 13 and 20

Lecture 14: Determinants of aggregate demand
Determinants of aggregate supply
Determining economic activity in the short-run

Lecture 15: Long run determinants of economic activity
Supply in the long-run
Physical constraints and productivity

Lecture 16: Short and long-run compared
Government intervention and stabilisation

Lecture 17: More on government intervention and stabilisation

2.3 Inflation, Deflation and Unemployment

Reading: Mankiw, Chaps. 24 and 28
Case et al., Chaps. 22
Frank and Bernanke, Chap. 19
Sloman, Chaps. 13

Lecture 18: Definition and measurement of inflation
Causes and consequences of inflation
Policies to combat inflation

Lecture 19: Ideas of deflation
Causes of deflation
Consequences and policies

Lecture 20: Unemployment ? definitions and measurement
Causes of unemployment

Lecture 21: Consequences of unemployment
Policy responses to unemployment

Lecture 22: Review session

Reading Lists

N G Mankiw (2004) Principles of Economics 3rd edition. Thomson
R Frank and B Bernanke (2004) Principles of Economics 2nd edition. McGraw Hill
J Sloman (2000) Economics 4th edition. Prentice Hall
K E Case, R C Fair, M Gartner and K Healther (1999) Economics 2nd edition. Prentice Hall


This module is at CQFW Level 4