Economic Principles and Policy
The module is designed to equip students with the key principles necessary for the analysis of a range of basic economic problems and policies. It seeks, in particular, to increase the students’ abilities to, independently, pose and solve economic questions, especially those relating to policy issues.
The first term of this module emphasises the fundamental conceptual foundations in microeconomics and key tools of micro-economic analysis, and provides concrete examples of their applications.
The second term focuses on macroeconomic issues with the second semester addressing micro-economic issues. The module builds on first-year economics and aims to both deepen and widen the students’ formal knowledge of economic theory and its application.
This module will develop understanding of how decisions by consumers, firms and government are interlinked, and impact on interest rates, exchange rates on the overall level of economic activity. Analysis of contemporary economic events will be a key feature of the module, enabling the procurement of skills to assess the likely trends in macroeconomic variables that will facilitate decision making.
This module covers economics from a business point of view and incorporates many international examples and the world economy.
You will gain an awareness of the economy and economic laws, how they change in both a micro and macro sense, and the effects this has on the decision making, which is a key skill required by company managers.
You will improve your analytical, logical, quantitative, and communication skills. You will cultivate the ability to apply tools and approaches from the Economics discipline to real-world problems in business and government policy, and to communicate these approaches to non-specialists. This module emphasizes several skills noted as highly valuable according to the Economics Network Research: Employers’ Survey 2014-15, including ‘the ability to analyse economic, business and social issues’, ‘the ability to simplify complexity while still retaining relevance’ and ‘communication of economic ideas.’
You are encouraged to attend the open lectures from visiting speakers in the Business School.
Full module specification
|Module title:||Economic Principles and Policy|
BEE1029 or BEE1034 OR BEE1030 and BEE1031
Cannot be taken with BEE2025 and BEE2026
|Duration of module:||
Duration (weeks) - term 1: |
11Duration (weeks) - term 2:
The first semester focuses on microeconomic issues with the second semester addressing macroeconomic issues. The module builds on first-year economics and aims to both deepen and widen your formal knowledge of economic theory and its application.
The module is designed to equip you with the key economic principles necessary for the analysis of a range of economic problems and policies. It seeks, in particular, to increase your abilities to independently pose and solve economic questions, especially those relating to policy issues. It emphasises the fundamental conceptual foundations in micro and macroeconomics and provides concrete examples of their applications.
Analysis of contemporary economic events will be a key feature of the module, enabling the procurement of skills to assess the likely trends in economic variables that will facilitate decision making.
ILO: Module-specific skills
- 1. demonstrate a comprehensive and detailed knowledge and understanding of intermediate microeconomic theory and be able to apply economic reasoning to the analysis of economic questions and policy
- 2. understand the factors affecting the macroeconomic environment, how they interact, and thus assess the ramifications of a change in one factor on other macroeconomic variables
- 3. comprehend the value of using economics in assessing the external environment for business decision-making
- 4. critically evaluate macroeconomic policies
ILO: Discipline-specific skills
- 5. identify, present and explain standard theoretical economic models and apply them to analyse economic questions and policy issues
- 6. think analytically
- 7. interpret economic data
- 8. question common assumptions held within the business environment
ILO: Personal and key skills
- 9. communicate concepts/definitions/arguments in writing
- 10. develop the capacity for analytical thought and reasoned discussion
- 11. develop independent study skills
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Scheduled Learning and Teaching Activities||44||Lectures, where key concepts are introduced|
|Scheduled Learning and Teaching Activities||10||Seminars, where problem sets are worked through and discussed|
|Guided Independent Study||246||To be divided between background reading (e.g. 80 hrs), solving/reviewing problem sets (e.g. 80 hrs) and exam revision (e.g. 86 hrs)|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Bi-Weekly problem sets||1 hour every two weeks||1-11||Oral in tutorial class and formative feedback.|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Midterm Examination 1st term (Microeconomics)||15||90 minutes||1, 3, 5-11||ELE|
|Examination 1st Term (Microeconomics)||35||2 hours||1, 3, 5-11||Final grade; Exam's indicative answers will be posted on ELE.|
|Examination 2nd Term (Macroeconomics)||45||2 hours||2-11||Final grade; Exam's indicative answers will be posted on ELE.|
|Average of 5 homework tasks to be completed on ELE (Term 2)||5||30 minutes||2-11||ELE|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Examination (Term 1) and Midterm||Examination 2 hours (50%)||1, 3, 5-11||August Examination Period|
|Examination (Term 2) and Homework Tasks||Examination 2 hours (50%)||2-11||August Examination Period|
Term 1: Microeconomics
- Module outline, background, Economic models (and maths tools), 'empirical' evidence
- Utility and choice (Utility, preferences, indifference curves, budget constraints)
Building the model, putting it together, examining it
- Demand curves: Individual and market demand
- Production functions and costs (brief)
- Profit maximisation and supply, perfect competition in a single market (brief)
- General equilibrium and welfare (brief)
How the market can go wrong (and how to fix it)
- Market failures: Public goods
- Monopolies, pricing and price discrimination
Extensions to the model
- Uncertainty (basic concepts, EU, risk aversion, investment choices)
- Game theory; experimental evidence on this
- Behavioural economics; Limits to cognition, willpower, self-interest; applications and evidence
Term 2: Macroeconomics
- A Tour of the World
- The Goods Market
- The Financial Market
- The IS-LM Model
- The Labour Market
- The Phillips curve, the natural rate of unemployment and inflation
- Putting all markets together: from the short to the medium run
- The Open Economy
Indicative learning resources - Basic reading
Readings and materials to be linked via the ELE
BEE2024 "Intermediate Microeconomics and Its Application" (12th ed.), by Walter Nicholson and Christopher M. Snyder, Cengage Learning.
- Earlier editions are also acceptable
- Note that any intermediate or advanced textbook in Microeconomics will cover virtually the same material, with varying degrees of mathematical rigour. There are now texts available for free, legally, online, such as “Introduction to Economic Analysis”, by Preston McAfee, Caltech and Tracy Lewis, Duke University, available at https://open.umn.edu/opentextbooks/BookDetail.aspx?bookId=47
BEE2024 Customised edition of Blanchard, O., Amighini, A. and FR. Giavazzi (2017) Macroeconomics: A European Perspective, third edition, London: Prentice-Hall.
Module has an active ELE page?
Last revision date