Economics

Objectives

The course aims to help students:

• Gain an understanding of economics as a field of study and gain a capacity to consider issues from the perspective of economics
• Obtain an understanding of basic concepts and principles of economics
• Obtain knowledge of major aspects of the Australian economic system
• Develop a capacity to think analytically, to discuss and write effectively about economics

Course outline

The course, which will inform students about major issues and institutions in the Australian economy, will normally include the following topics:

Microeconomics  (Semester 1)

The Nature and Method of Economics

• Relative Scarcity
• Opportunity Cost and Choice
• Efficiency in Resource Allocation
• The Scientific Method
• Positive and Normative Economics
• Different Economic Systems

Supply and Demand Analysis in the Competitive Market

• Demand
  • The Demand Function
  • The Demand Curve
  • Movements along the Demand Curve
  • Shifts of the Demand Curve
• Supply
  • The Supply Function
  • The Supply Curve
  • Movements along the Supply Curve
  • Shifts of the Supply Curve
• Interaction between Demand and Supply
• Adjustment to Equilibrium Price and Output
• Elasticity of Demand

Applications of the Competitive Model

• A consideration of the nature and implication of a range of government interventions in the competitive market including, price ceilings and floors and sales tax

The Concept of Market Structure

• Perfect Competition
• Monopoly
• Oligopoly
• Monopolistic Competition

Concentrated Market Structures

• Anti-Competitive Conduct
• Collusion
• Government Intervention in the Market Economy

Macroeconomics  (Semester 2)

An Introduction to National Accounting

• The Circular Flow of Income
• The Concept and Measurement of GDP
• Real GDP and Nominal GDP
• Other national accounting aggregates

Characteristics of Macroeconomic Performance

• Each characteristic will be considered in terms of its definition, nature, measurement, broad determinants and recent performance in Australia
• Employment & Unemployment
• Inflation
• Economic Growth
• Balance of Payments & Exchange Rates

The Determinants of Macroeconomic Activity

• Aggregate Demand and the Keynesian Model including: the 45 degree line diagram, the consumption function, and "the multiplier"
• The Supply Side

Macroeconomic Policies

Each policy will be considered in terms of its nature, factors influencing its effectiveness and recent operation in Australia:

• Budgetary Policy
• Monetary Policy
• Trade Policy
• Labour Market Programs
• Incomes Policy

Assessment

• Final examination 70%
• Term 2 test 10%
• Term 3 test 10%
• Attendance and participation 10%

Required texts

• McTaggart D, Findlay C., and Parkin, M, Economics 5th Ed. 2007, Addison-Wesley