B6317 - Priinciples of Economics (LM)

Learning outcomes

The course aims to introduce the student who has no knowledge of economics to the basic principles of economic theory. The basic principles of market functioning, the behavior of economic agents and the basic elements of macroeconomic analysis will be studied, also making use of concrete examples and reference to current economic news. It is expected that, by the end of the course, the student will have acquired the necessary autonomy to take moderately advanced courses in economics and to process the issues at the center of economic debate with a critical spirit.

Course contents

Part I: Macroeconomics

1. Introduction: What is macroeconomics and its fundamental concepts
2. The market for goods
3. The financial markets
4. The market for goods and the financial markets: the IS-LM model
5. The labor market
6. The Phillips curve
7. Medium-term analysis: the IS-LM-PC model
8. Long term analysis and growth

 

Part II: Microeconomics

1. Supply, Demand and Market Equilibrium: Demand and Supply Curves and Their Shifts. The Elasticities of Demand and of Supply. The Market Equilibrium.
2. Consumer and Producer Surplus. Maximizing the Total Surplus: the Benevolent Social Planner and the Efficiency of Competitive Markets.
3. The tax system and the deadweight loss of taxation.
4. The Costs of Production. The Production Function. Total Revenues and Total Costs. Opportunity Costs. Economic vs Accounting Profit. Fixed and Variable Costs. Economies and Diseconomies of Scale.
5. Firms in a Perfectly Competitive Market. Profit Maximization and the Competitive Firm’s Supply Curve. Sunk Costs. The Long Run Equilibrium.
6. Monopoly. Monopoly’s Revenues and Profit Maximization. The Welfare Cost of Monopoly. Price Discrimination. Public Policy Toward Monopolies.
   

Readings/Bibliography

Blanchard, Amighini, Giavazzi (2023). Macroeconomics. A european perspective. Pearson

- Handouts

- N.G. Mankiw, M.P. Taylor, Economics (6th edition), Cengage Learning, 2023.

Teaching methods

Lectures. Each theoretical topic is followed by the study of particularly relevant examples and real cases.

Assessment methods

The exam consists of a written test divided into two parts: macroeconomics and microeconomics. Each part will consist of three questions, for which you will need to adequately justify your answers.

You can take the exam either through two partial tests (one at the end of each module) or in a single session as a comprehensive exam.

The score is expressed out of thirty, with equal weight given to the macroeconomics and microeconomics parts. Students are allowed to reject the grade only once. The grade applies to the exam as a whole, and it is not possible to keep the grade obtained in only one part of the test. For further information, please refer to the course page on Virtuale.

Teaching tools

Slides and teaching materials will be available on the Virtuale platform.

Office hours

See the website of Lucio Picci

See the website of Luciano Messori