The Foundations of the Market Economy

Aim

After completing the course, the student should be able to:

• account for basic economic problems and the meaning of the basic assumptions economise with scarce resources and rationality
• in speech and writing give an account of the structure of a country's national accounts and analyse the meaning of various indications of the macroeconomic situation
• explain what determines demand, supply and price in a market, as well as what can cause these to change
• account for individuals' trade-offs between benefits and costs associated with different choices
• account for companies' trade-offs between different production factors in order to produce at a basic level apply economic models to analyse economic problems.

Content

The course covers basic economic theory in both microeconomics and macroeconomics. The course begins with the basic prerequisites of the economy, the actors in the market, and the assumptions of rationality, demand, supply, and equilibrium price, as well as various disturbances in the market. The course also deals with consumer and producer theory—how actors, individuals, and companies make decisions to maximise benefits or minimise costs. Within macroeconomics, the national accounts and their structure are treated as well as other concepts related to a country's economic situation and how these can be used to analyse a country's economic situation. Basic concepts such as opportunity cost and managing scarce resources are also covered in the course.