Lecturer: Damien King, E212 McIntyre (Office Hours: Wed & Fri, 2-4pm)

Assistant: Peta-Gay Fairclough-Campbell, E210 McIntyre (Office Hours: Wed 3-5, Fri 10-12)
Pre-reqs: CXC mathematics (grade II) or ECON0001.
Anti-reqs: ECON1001, ECON1002.
Description
This course introduces you to the basic principles of economics. It assumes no previous exposure to
economics. All you need is curiosity and a willingness to read. During the term, we will discuss the
basic ideas underlying the economic way of thinking and apply it a range of phenomena both within
and outside of the areas of traditional economic analysis. The objective is that, by the end of the course,
you will be able to approach a problem in the way that an economist would. Along the way, we
introduce some of the basic tools of economic analysis.
Syllabus
I: The Basics II: The Toolbox III: The Economy
-------------------------WEEKS 1, 2
1. The Core Principles
People Respond to Incentives
Resources are Scarce
Prices Reflect Scarcity
Returns Eventually Diminish
Exchange is Beneficial
--------------------------- WEEK 3
2. Production and
Consumption Possibilities
Production Possibility Frontier
Budget Constraint
The Gains from Trade
--------------------------- WEEK 4
3. The Market Model
Demand
Supply
The Market
Special Cases
Welfare
--------------------------- WEEK 5
4. Interfering in the Market
Taxation
Price Restrictions
Quantity Restrictions
--------------------------- WEEK 6
5. Market Failures
Externalities
Public Goods
Asymmetric Information
--------------------------- WEEK 7
6. Inflation: the Market for
Money
What is Inflation?
The Market for Money
The Source of Inflation
Whats Wrong with Inflation
--------------------------- WEEK 8
7. Finance: the Market for
Loans
Savings and Investment
Role of the Financial System
Financial Institutions and
markets
The Market for Funds
--------------------------- WEEK 9
8. External Linkages: the
Market for Foreign Exchange
Nominal and Real Exchange Rates
Exchange Rates in the Short Run
Purchasing Power Parity
-------------------------- WEEK 10
9. Economic Growth
Growth Factors
Production Function
Depreciation
Solow Growth Model
-------------------------- WEEK 11
10. Economic Statistics
GDP: Measuring Production
CPI: Measuring Inflation
DEPARTMENT OF ECONOMICS
ECON1000: Principles of Economics
Course Outline: September 2013


Resources
There are links to all the required resources on the courses OurVLE site, http://ourvle.mona.uwi.edu/.
The material is drawn largely from the following sources.
N. Gregory Mankiw, Principles of Economics (any edition), South-Western, United States.
Robert Stonebraker, The Joy of Economics: Making Sense Out of Life,
http://faculty.winthrop.edu/stonebrakerr/book/contents.htm
Steven E. Landsburg, The Armchair Economist: Economics and Everyday Life, The Free Press, New York, 1993 and
(revised) 2012.
Tim Harford, The Logic of Life, Random House, New York, 2008.
Tim Harford, The Undercover Economist, Oxford University Press, Oxford, 2006.
Assessment and Delivery
The final grade is determined from in-course quizzes (accounting for a total of 60% of your course
grade) and a comprehensive final examination (40%).
The course syllabus is delivered in two lecture hours and one tutorial hour per week. Problem sets (not
for grading) will be provided for practice at problem solving. You are to attempt answers to the
problem sets before you attend your tutorial.
Learning Objectives
The Core Principles
Describe the scope of economics.
Explain the core principles that economists use to
understand observed phenomena.
Explain, calculate, and apply opportunity cost.
Demonstrate how a market economy works.
Production and Consumption Possibilities
Use a production possibility frontier to analyse
opportunity costs and trade-offs.
Explain how people gain from specialization and trade.
The Market Model
Identify the factors that affect demand and supply.
Distinguish between shifts of and movements along
demand and supply curves.
Use the market model to analyse the effect of stimuli
on prices and quantities in a market.
Demonstrate why market outcomes can be efficient
and desirable.
Interfering in the Market
Analyse the effect of various market interventions
(such as price controls and quantity restrictions) on
prices and quantities in a market.
Market Failures
Identify the circumstances under which market
outcomes are neither efficient nor desirable and
formulate appropriate corrective actions.
Inflation: The Market for Money
Explain the cause of inflation.
Explain the problems that inflation causes.
Finance: the Market for Loanable Funds
Explain the role of the financial sector.
Identify the different ways in which the sector carries
out its role.
Use the market model to analyse how changes in the
factors that affect the credit market will affect interest
rates.
External Links: the Market for Foreign
Exchange
Identify the ways in which events in the rest of the
world can affect the local economy.
Define and explain the balance of payments.
Apply the market model to the determination of
exchange rates.
Economic Growth
Explain the factors that account for differences in
living standards amongst countries.
Explain why the rates of economic growth differ
across countries and over time.
Identify policies that may accelerate growth.
Economic Statistics
Define and explain Gross National Product.
Calculate GDP for a hypothetical economy.
Calculate the inflation rate.