Economics
Course Syllabus
August 2002
Chapter 4 p. 51 - 60
Scarcity & Choice
Opportunity Costs & Production Possibilities Curve
Purpose & Goals of Economic Systems
Allocation of Economic Resources
What, How & For Whom to produce Goods & Services
Efficiency vs. Equity
Economic Resources (Factors of Production)
Land, Labor, Capital, & Entrepreneurship
Assumptions for Creating Economic
Models
Economic Rationality
Free versus Economic Goods
Ceteris Paribus
Comparative Economic Structures
Various Readings
Traditional Societies / Economies
Hunter / Gatherer
Confucian
Caste
Successes & Failures
Centrally Planned Economies
Marxist criticisms of Capitalism
Nationalization of Land and Capital
Non-Price
Allocation of goods/services
Pasts Examples of Central Planning: USSR, China, Cuba
Potential Strengths
Rapid
Industrialization, Full Employment & Social equity
Weaknesses
Misallocation of resources resulting in
Shortages & Surpluses
Lack of incentive for innovation
Market Economic Systems
Adam Smith's Invisible Hand
Laws of Supply & Demand
Recent Expansion of Markets
Collapse of Communist Planned Economies
Privatization of State Firms
Globalization
Mixed Economic Systems Chapter 3
Role of Private Enterprise
Allocation of Resources
Consumer Sovereignty
Wealth Creation
Role & Functions of Governments
Reallocation of Resources, Public & Merit Goods
Redistribution of Income / Wealth
Maintain Competition
Enforce Legal Structures
Stabilization of Macroeconomic Conditions
Traditional Aspects of Current Economies
Gender Roles
Agricultural Policies
Central Planning
Health Care
Education
Chapter 2 - Graphing
Chapter 5 p. 67 - 88
Chapter 6 p. 102 - 107
Chapter 7 Elasticity
Assumptions: Elements of Perfect Competition
Many buyers and sellers
Comparable Products
Easy Movement into & out of Market
Equal Knowledge of Market Conditions
Demand & Law of demand
Movement along demand curve (QD)
Shift of demand curve
Supply & Law of Supply
Movement along supply curve (QS)
Shifts of supply curve
Market equilibrium
Market price as allocation device (For Whom to Produce)
Elasticity of Supply and Demand
Critical View of Markets
Market Efficiencies
Increasing Material Standards of Living
Innovation & Choice
Market Failures
Externalities
Inequities of Wealth & Income
Monopoly
Social Issues
Recessions/Inflation
Government Response to Market Failures
Public & Merit Goods
Market Interventions
Tax Policy, Trade Permits, Recycling Policies
Non-Market Intervention
Regulation, Minimum Wages, Price Floors & Ceilings
Introduction to Macroeconomics
Government Macroeconomic Goals
Chapter 3
Goal #1 Promote Economic Growth
Causes of Growth: Increases in Quality and Quantity of Economic Resources
Full Employment
Cyclical Unemployment
Structural Unemployment
Frictional Unemployment
Various Effects of Unemployment
Capital Growth
Technological Change
Tax Policy to Promote Research and Development
Measuring Economic Growth
Gross Domestic Product
Gross National Product
Critical View of Using GNP/GDP to Measure Economic Growth
Non Marketed Output not included
Illegal & Black Market output not included
Effective Uses of GDP
Single Country Comparisons over time
International Comparisons
Limitations of GDP
Distribution of income
Productive nature of output
Quality of life indicators
Goal #2 Economic Development
Increases in Quality of Life
Indicators of Economic Development
GNP/GDP per capita
Limitations on GDP's Ability to Measure Quality of Life
Pollution & other externalities
Infant Mortality
Literacy
Life Expectancy
Availability of Medical Care
Income distribution
Population growth
Goal #3 Price Stability: Inflation and Deflation
Measuring price changes
CPI, PPI
Causes of Inflation
Demand Pull & Cost Push
Inflationary Expectations
Effects of Inflation
Redistribution of wealth
Uneven effects of various groups
Disincentive to save & invest
Government
Action to Promote Macroeconomic Goals
Government
Fiscal Policy
Goals and Techniques
Taxing & Spending policies
Automatic vs. discretionary
Problems with implementation
Forecasting
Political difficulties
Monetary Policy
Function definition of Money
Medium of exchange, store of value,
unit of account, standard for deferred payment
Role of the Central Bank
Interest rates: discount vs.
prime rates
Reserve Requirement
Open Market Operations
Introduction to Economic Development
Status
of Less Developed Nations
Shared Characteristics of Less Developed Nations
Poverty, Health, Illiteracy, Population Growth,
Low Productivity
Traditional Components of LDN Economic Systems
Agriculture
Land Ownership
Risk Minimization
Social Structure
Gender Roles
Political Structure
Authoritarianism & corruption
Command Components of LDN Economic Systems
Early Development Models
Government run utilities, infrastructure, & Health care
Indicators
of Economic Development
GNP/GDP per capita
Other Basic Indicators:
Crude Birth rates, Crude Death rates,
Literacy, Energy consumption per capita,
Life expectancy, Urbanization, infant mortality,
caloric intake, Dr's &
Hospitals per capita
income distribution, population growth
Composite Indicators
Physical Quality of Life Index (PQLI)
Human Development Index (HDI)
Sustainable growth versus resource sales
Barriers
to Economic Development
Political Institutions
Lack of Legal Foundation
Corruption, Civil Conflict, Land Ownership & Political
Instability
Social Structure
Tradition, cultural attitudes, gender issues, literacy rates,
inequitable division of wealth
Physical Barriers
Climate, resource availability, urban slums, poor infrastructure
Psychological Barriers: Dependency
and other colonial legacies
International Relations
Terms of Trade
Cyclical nature of primary product exports
Agricultural protections by DC
Synthetic substitutes
International Indebtedness
Introduction to International Trade
Gains
from International Trade
Theory of Comparative Advantage
Lowest Opportunity Cost
Absolute vs. Comparative
Gains from specialization
Globalization
Increased access to information
World Markets for Resources, Goods & Services
Less Developed Nations
Increased Access to Developed World's Markets
Increased Access to Information via Internet
Problems of Freer Trade / Globalization
Growth in Multinational Corporations
Destruction of smaller firms
Monopoly strength within regions
Economic Dislocation
Cultural Homogeneity
Wage Reductions
Trade Protectionism
Types of Protection
Tariffs, quotas, non-tariffs, export subsidies &
Voluntary export restraints
Arguments in Favor of Protectionism
Infant industries, strategic goods, retaliation, LDN attempts
to diversify economy, phase out inefficient industries.
Costs of Protectionism
Higher Prices & less choice for Consumers
Long range competitiveness of industry
Long Run reliance on protectionist policies reducing
export competitiveness.
Structure of World Trade Environment
Bretton Woods Agreement
Formation of World Trade Organization
Tariff vs. non-tariff, Most Favored Nation (MFN),
Services, Intellectual property agreements
anti-dumping agreements, allowances for LDN,
removal of quotas, Arbitration of Trade Disputes, &
Ongoing nature of trade discussions
World
Bank
International Monetary Fund
Implications for Less Developed Nations
Inability to compete in Secondary & Tertiary Sectors
Loss of control over financial and service industries
Consequences for pursuing Comparative Advantage in
Primary Sector of Economy
Exploitation of Child and Cheap Labor
Environmental Destruction
END OF FIRST SEMESTER