14604 - Notions of Agricultural Economics

Learning outcomes

The course aims at providing students with the basic theoretical tools to analyze the main dynamics of the economic system. lectures will focus on the main principles related the behavior of economic agents, to the functioning of markets and to the use and management of natural resources. the discussion of economic theories will be joined with the illustration of case studies applied to the agro-food sector.

Course contents

UNIT 0: INTRODUCTION TO THE COURSE (2 hours)

UNIT 1: WHAT IS ECONOMICS AND WHY STUDY IT (14 hours)

Measuring income and living standards. History’s hockey stick: growth in income. Income inequality. Economics and the economy. Malthusian economics. Economic models. Basic concepts.

Seminar 1: The 10 principles of economics
Seminar 2: Economics, environment, agriculture and food
Exercise 1: The economist's toolbox

Acquired skills: the student knows the basic references to interpret the specificities of agriculture and its evolution within the different economic systems. He/she can understand the meaning of the elements that characterize the economic sciences.

Materials: CORE Chapters 1, 2; slides; recommended readings

UNIT 2 WHO TO PRODUCE FOR (14 hours)

Labour and production. Preferences. Opportunity costs. The feasible set. Decision making and scarcity. Income and substitution effects on hours of work and free time. Social interactions: Game theory. Equilibrium in the invisible hand game. The prisoners’ dilemma. Social preferences: Altruism. Altruistic preferences in the prisoners’ dilemma. Behavioural experiments in the lab and in the field. Cooperation, negotiation, conflict of interest and social norms. The labor market: wages, profits and unemployment.

Seminar 3: Behavioural Economics
Exercise 2: Measure the utility function and consumer equilibrium

Acquired skills: the student knows the variables that influence the formation of prices in competitive markets. He/she critically understands the meaning of supply and demand shifts and identify the interpretative and application potential of the acquired notions.

Materials: CORE Chapters 3, 4, 5; slides; recommended readings

Firms, markets and the division of labor. Breakfast cereal: Choosing a price. Economies of scale and the cost advantages of large-scale production. Production: The cost function for Beautiful Cars. Demand and isoprofit curves: Beautiful cars. Setting the price and quantity to maximize profit. Look at profit maximization as marginal revenue and marginal cost. Gains from trade. The elasticity of demand. Using demand elasticities in government policy. Price-setting, competition, and market power. Product selection, innovation and advertising. Prices, costs, and market failures. Buying and selling: Demand and supply. The market and the equilibrium price. Price-taking firms. Market supply and equilibrium. Competitive equilibrium: Gains from trade, allocation, and distribution. Changes in supply and demand. The effects of taxes. The model of perfect competition.

Seminar 4: Blockchain technologies: a new perspective for the economic system
Exercise 3: The firms and the maximization of profit

Acquired skills: the student knows the different theoretical approaches on production and can identify the specificities of agricultural production, also for solving management issues in competitive agricultural enterprises. He/she can understand the notion production cost and its components. Finally, he/she can understand the characteristics and specificities of agricultural markets.

Materials: CORE Chapters 6 and 7; slide; recommended readings

UNIT 4 WELFARE ECONOMICS AND PUBLIC INTERVENTION (10 hours)

External effects and bargaining. Market failure: External effects of pollution. How market organization can influence price. Monopoly. Monopolistic competition. Oligopoly. Public goods. Missing markets: Insurance and lemons. Environmental goods. The effects of taxes. Reasons for public intervention, price controls, taxes, subsidies.

Seminar 5: The true cost of food
Seminar 6: Ecosystem services

Acquired skills: the student knows the basic elements of the economy of well-being and can recognize the reasons for public intervention. He/she can recognize the characteristics of public goods, collective resources, and meritorious assets, as well as cases of market failure.

Materials: CORE Chapters 8, 11 and 12; slide; readings

UNIT 5 ELEMENTS OF MACROECONOMICS (4 hours)

Measuring the aggregate economy. Measuring the aggregate economy: The components of GDP. Measuring the Economy: Inflation.

Acquired skills: the student understands the basics of macroeconomics and the flows that characterize it. He/she can define the basic concepts related to national product and national accounts, price index and inflation.

Materials: CORE Chapter 13; slide; recommended readings

Optional chapters of CORE: 10, 11, 14, 15 and 16

Readings/Bibliography

Main text

Samuel Bowles, Wendy Carlin, Margaret Stevens, L’economia - Comprendere il mondo che cambia, Il Mulino Manuali, 2017

Online version (free): https://www.core-econ.org/

Alternative text

N Gregory Mankiw, Mark P. Taylor, Principi di Economia, Zanichelli, 2015, or newer versioni (Chapters 1-22 excluding 9)

The text will be integrated with slides and other material

Teaching methods

Front loaded and active learning methodologies; group and individual exercises; seminars.

Assessment methods

The final exam consists in a written test that requires to answer to 5 questions in one hour. The 5 questions will cover the 6 units that characterize the programme. In case of positive, but not satisfactory evaluation, the student has the possibility to take an additional oral exam.

Students wishing to take the examination in English should inform the lecturer at least two days in advance.

The final exam is the same for the two modules.

Teaching tools

Laptop and beamer.

Office hours

See the website of Matteo Vittuari

See the website of Matteo Masotti