SUBJECT

Title

Principles of economics

Type of instruction

lecture

Level

bachelor

Part of degree program
Credits

3

Recommended in

Semester 1

Typically offered in

Autumn semester

Course description
  • Subject and method of economics. Supply and demand curve, the Marshall-cross. How markets work. Shifts in the demand/supply curve. Elasticity of demand and supply and its application.

  • The consumption decisions. Description of preferences, representing preferences with indifference curves. Properties of indifference curves. Budget constraints, consumers’ optimum choice. Income and price changes, determinants of individual demand-curve and Engel-curve, income and substitution effects.

  • The firm decisions: Production function and its properties. Сonсept of short and long runs.

  • Short-run production function: Dynamics and relationship of marginal and average returns to a variable factor. Long-run production function and its characteristics. Сonсept and types of returns to scale, increasing, constant and decreasing returns. Isoquants maps and isocost, optimal choice.

  • Cost functions and their derivation: Deriving long-run and short-run cost functions for production functions. Short-run and long-run cost functions.

  • Market structures classification: Perfect competition as a type of market structure, monopoly as a market structure, monopolistic competition, oligopoly as a market structure.

  • Macroeconomics: Subject of macroeconomics, basic macroeconomics sectors and macroeconomics circular flow. Macroeconomics aggregates. Aggregate expenditures and equilibrium income.

  • Goods market and IS curve derivation. The monetary base and the money supply. The Supply of money: The money multiplier model. The Demand for money, money market and LM curve derivation. Equilibrium in IS-LM model. Effectiveness of fiscal and monetary policies.

  • The aggregate demand curve. The aggregate supply (AS) curve. Equilibrium in aggregate supply- aggregate demand model. Fiscal and monetary policies in the complete model.

  • Inflation and unemployment.

Readings
  • Hóka Sándorné-Gelegonya Judit: Közgazdaságtan alapjai, Műegyetemi kiadó 2002.