Course Name: Introduction to Economics Couse Status: Common Course

Course Code: Econ 1011

ECTS: 5 Credit Hours: 3

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.

General objective

The course will introduce students to the fundamental economic concepts and principles.

Specific objectives of the course

This course is aimed at:

 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 behaviour 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.

Expected learning outcomes

After completing introduction to economics, students will be able to:

 Describe the major economic agents and their corresponding roles and objectives;
 Understand the concepts of demand and supply and their interactions;
 Explain the objective functions of consumers and producers’ behaviour in the short run.
  Differentiate the various types of market structures,
 Understand the fundamental macroeconomic concepts, problems and policy instruments in the
context of Ethiopia.

Lecture Topic & Sub Topics of the Course

Chapter One: Introduction 3.3. Approaches of measuring Utility
1.1. Definition and Meaning of Economics 3.3.1. The cardinal utility approach
1.2. Rationale of Economics 3.3.1.1. Assumptions of cardinal utility
theory
1.3. Scope and methods of economic analysis
3.3.1.2. Total and marginal utility
1.3.1. Micro and macro economics
1.3.2. Positive and normative economics 3.3.1.3. Law of diminishing marginal
1.3.3. Inductive and deductive reasoning utility (LDMU)
in economics.
3.3.1.4. Equilibrium of the consumer
1.4. Scarcity, choice, opportunity cost and
production possibilities frontier 3.3.2. The ordinal utility approach
1.5. Basic economic questions 3.3.2.1. Assumptions of ordinal utility
approach
1.6. Economic systems
3.3.2.2. Indifference curve and map
1.7. Decision making units and the circular
flow model 3.3.2.3. Properties of indifference curves
Chapter Two: Theory of Demand and Supply 3.3.2.4. The marginal rate of substitution
(MRS)
2.1. Theory of Demand
3.3.2.5. The budget line or the price line
2.1.1. Demand function, demand schedule
and demand curve 3.3.2.6. Equilibrium of the consumer
2.1.2. Determinants of Demand Chapter Four: The Theory of Production and
Costs
2.1.3. Elasticity of Demand
4.1. Theory of production in the short run
2.2. Theory of Supply
4.1.1. Definition of production
2.2.1. Supply function, supply schedule and
supply curve 4.1.2. Production function
2.2.2. Determinants of supply 4.1.3. Total, average, marginal product
2.2.3. Elasticity of supply 4.1.4. The law of variable proportions
2.3. Market equilibrium 4.1.5. Stages of production
Chapter Three: Theory of Consumers’ 4.2. Theory of costs in the short run
Behaviour 4.2.1. Definition and types of costs
3.1. Consumer preferences 4.2.2. Total, average, marginal costs in the
3.2. The concept of utility short run
 4.2.3. Relationship between short-run Chapter Six: Fundamentals of macroeconomics
production and cost curves (with stylized facts from Ethiopia)
Chapter Five: Market structure 6.1. Goals of Macroeconomics
5.1. The concept of market in physical and digital 6.2. The National Income Accounting
space
6.2.1. Approaches to measure national
5.2. Perfectly Competitive market income (GDP)
5.2.1. Assumptions 6.2.2. Other income accounts (GNP, NNP,
NI, PI and DI)
5.2.2. Short run equilibrium of the firm
6.3. Nominal versus Real GDP
5.2.3. Short run equilibrium of the industry
6.4. The GDP deflator and the Consumer Price
5.3. Monopoly market
Index (CPI)
5.3.1. Definition and Characteristics
6.5. The Business Cycle
5.3.2. Sources of Monopoly
6.6. Macroeconomic Problems
5.4. Monopolistically competitive market
6.6.1. Unemployment
5.4.1. Definition and characteristics
6.6.2. Inflation
5.5. Oligopolistic market
6.6.3. Trade deficit and budget deficit
5.5.1. Definition and characteristics
6.7. Macroeconomic Policy Instruments
6.7.1. Monetary policy
6.7.2. Fiscal policy

Assessment Methodology
Assessment method Wight
Assignment(Indiv/Group) 20%
Quizzes/Tests(Max of 10% each) 30%
Final Exam 50%
Total 100%

Course policy
 Attendance: it is compulsory to come to class on time and every time. If students are going to miss
85% of the class during the term, they shall not be allowed to sit the final exam,
 Assignments: students must do their individual and group assignments and submit on time.
Assignments shall be submitted on or before the due date as specified by the instructor,
 Tests/Quizzes: instructors should give short quizzes and tests as appropriate.
  Cheating: students must do their own work and should not copy answers from someone else.
 Acts and mannerisms: When students are in class, they are strictly forbidden from chewing gum,
consuming any addictive substances, listening to recorders or CD players, or being involved in acts
that interrupt the normal teaching-learning process. Besides, students are required to switch off their
cell phones before class and exam sessions. Students who attempt to disobey these rules and
regulations will be subject to disciplinary measures accordingly to the Senate Legislations of the
University.

Readings and texts

1. A. Koutsoyiannis, Modern Microeconomics
2. D.N.Dwivedi, 1997, Micro Economic Theory, 3rd edition., Vikas Publishing
3. R.S. Pindyck& D.L. Rubinfeld, Microeconomics.
4. Hal R. Varian, Intermediate Microeconomics: A Modern Approach, 6th edition.
5. C.L.Cole, Micro Economics: A Contemporary Approach.
6. Ferguson & Gould’s, 1989, Microeconomic Theory, 6th edition.
7. N. Gregory Mankiw, 2007, Macroeconomics, 4th edition.
8. P. Aghion and P. Howitt ,2009, The Economics of Growth, The MIT Press.
9. A. B. Abel and B.S. Bernanke, 2017, Macroeconomics, 9th edition, Pearson.
10. Ayele Kuris, Introduction to Economics, 2001.
11. Begg, Fisher &Dornbusch, 2005, Macroeconomics, 8th Ed.
12. Liberman, Marc and Hill, Robert E, 2005, Introduction to Economics 2nd Ed