Principles of Economics

Full course description

According to a classic definition, economics is the study of the use of scarce resources that have alternative uses. This course introduces basic economic ideas and concepts. In the lectures, we first study markets, the most common allocation mechanism for scarce resources of any kind in many economies. We analyze behaviour on markets, outcomes of markets, and different market forms. Here, we also introduce game theory to study situations with strategic interaction (e.g., oligopolistic competition). We then turn to the idea of comparative advantage as an explanation of trade patterns. While the first part of the course mainly covers microeconomic topics, the second part is devoted to macroeconomics. Here, we first consider macroeconomic indicators (e.g., GDP) and then study economic fluctuations (e.g., the Great Recession of 2007–2009) as well as economic policy. Further topics (e.g., the monetary system) will be covered in the tutorials. Through presentations and special debates (e.g., on Behavioral Economics), the tutorials give the opportunity to apply and reflect on some of the contents of the course.

The course provides a foundation for many other economics courses at UCM. It is a strict or recommended prerequisite for courses such as SSC2020 (The Economics of Information), SSC2038 (International Macroeconomics), SSC2043 (Development Economics), or SSC2048 (Intermediate Microeconomics).