N Introduction to Economics (Econ-1011) Course Outline
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’ behaviour. 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. Units and contents
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
1.3.1. Micro and macroeconomics
1.3.2. Positive and normative economics
1.3.3. 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 (8 hrs.)
2. Theory of Demand and Supply
2.1. Theory of Demand
2.1.1. Demand function, demand schedule and demand curve
2.1.2. Determinants of Demand
2.1.3. Elasticity of Demand
2.2. Theory of Supply
2.2.1. Supply function, supply schedule and supply curve
2.2.2. Determinants of supply
2.2.3. Elasticity of supply
2.3. Market equilibrium
Chapter Three: Theory of Consumers’ 3.3.1.1. Assumptions of cardinal utility
Behaviour (9 hrs.) theory
Theory of Consumers’ Behaviour 3.3.1.2. Total and marginal utility
3.1. Consumer preferences 3.3.1.3. Law of diminishing marginal utility
3.2. The concept of utility (LDMU)
3.3. Approaches of measuring Utility 3.3.1.4. Equilibrium of the consumer
3.3.1. The cardinal utility approach 3.3.2. The ordinal utility approach
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3.3.2.1. Assumptions of ordinal utility 3.3.2.4. The marginal rate of substitution
approach (MRS)
3.3.2.2. Indifference curve and map 3.3.2.5. The budget line or the price line
3.3.2.3. Properties of indifference curves 3.3.2.6. Equilibrium of the consumer
Chapter Four: The Theory of Production 5. Market structure
and Costs (8 hrs.) 5.1. The concept of market in
4. Theory of Production and Costs physical and digital space
4.1. Theory of production in the short run 5.2. Perfectly Competitive market
4.1.1. Definition of production 5.2.1. Assumptions
4.1.2. Production function 5.2.2. Short run equilibrium of the firm
4.1.3. Total, average, marginal product 5.2.3. Short run equilibrium of the industry
4.1.4. The law of variable proportions 5.3. Monopoly market
4.1.5. Stages of production 5.3.1. Definition and Characteristics
4.2. Theory of costs in the short run 5.3.2. Sources of Monopoly
4.2.1. Definition and types of costs 5.4. Monopolistically competitive
4.2.2. Total, average, marginal costs in the market
short run 5.4.1. Definition and characteristics
4.2.3. Relationship between short-run 5.5. Oligopolistic market
production and cost curves 5.5.1. Definition and characteristics
Chapter Five: Market structure (6 hrs.)
Chapter Six: Fundamentals of macroeconomics (with stylized facts from Ethiopia) (11 hrs.)
6. Fundamentals of macroeconomics
6.1. Goals of Macroeconomics
6.2. The National Income Accounting
6.2.1. Approaches to measure national income (GDP)
6.2.2. 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
6.6.1. Unemployment
6.6.2. Inflation
6.6.3. Trade deficit and budget deficit
6.7. Macroeconomic Policy Instruments
6.7.1. Monetary policy
6.7.2. Fiscal policy
Assessment Methods
Evaluation in this course consist both formative and summative assessments including quizzes, test and final
exam. Marks will be allocated according to the following grading schedule.
Assessment method Weight
Mid 20%
Assignment (individual/Group) 30%
Final Exam 50 %
Total 100%
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