INTRODUCTION TO ECONOMICS EC1001 (ITE)
2005-2006 Course outline: microeconomics
WEEKS
Period 1
CONTENT
Microeconomics
LECTURER
Professor John Cubbin
CONTACT DETAILS
Room: D310
Phone: 020 7040 8533
E-mail: via WebCT
Web: www.staff.city.ac.uk/j.s.cubbin/
Period 2
Macroeconomics
Professor Keith Pilbeam
Room: D315
Phone: 020 7040 0258
E-mail: via WebCT
Web: www.staff.city.ac.uk/k.s.pilbeam/
LECTURES
Two a week, starting Monday September 26th.
Monday 1.00pm – 1.50pm, Poynton Lecture Theatre, The Centenary Building.
Friday 1.00pm – 1.50pm, Oliver Thompson Lecture Theatre, Tait Building.
Lecture slides, handouts and any other course materials for weeks 1-12 will be available on
WebCT in CitySpace via WebCT at https://uss2.city.ac.uk/WebCTV3/. You will need to log in
regularly to access course notes, class exercises and self-test module, (also if you want to
email me about the module.) (See below – ACCESSING COURSE MATERIALS.)
ITE EDUCATIONAL AIMS & OBJECTIVES:
This course aims to introduce the concepts of economic analysis and to develop an
understanding of the principles, theories and analytical tools that characterise economics as a
social science. The objectives of this course are to:
 Enable you to understand the behaviour of consumers, firms, markets and the economy
 Apply the economic principles and theories to which you have been introduced to the
understanding and explanation of common economic phenomena
 Provide the foundations for students progressing to intermediate level economic theory
and applied courses.
LEARNING OUTCOMES: MICROECONOMICS
On successfully completing this part of the course, you will be able to demonstrate a
knowledge and understanding of:
 key aspects of the behaviour of consumers, firms and markets;
 the implications of changes in relevant variables on the equilibrium of markets;
 the determinants of market structure and its effect on a firm’s supply and pricing
decisions;
 the principal rationale for Government intervention in markets, and the basis upon which
conclusions might be reached about the desirability of market outcomes on the grounds of
economic efficiency.
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MICROECONOMICS: TOPIC & STUDY GUIDE
The principal textbook for this course is: Sloman, J. (2003) Economics. 5th edition. Prentice
Hall (copies can be obtained on 7-day or short term loan from the main library, shelf-mark
number: 330 SLO).
The required readings listed below provide a starting point for your personal study and
should be read before the corresponding lecture. Additional reading material will be
suggested in lectures for some topics.
TOPIC
OBJECTIVE
REQUIRED
READING
1. ECONOMICS AS A SOCIAL
SCIENCE DISCIPINE: THEORY,
METHODS & APPLICATIONS.
To understand the sorts of questions
economists study, and the distinctive
theoretical and empirical ‘toolkit’
economists use to analyse them.
Sloman Ch.1:
Introducing
economics.
2.
ANALYSING MARKETS:
SUPPLY & DEMAND
To introduce you to the analysis of
demand, supply and the price
mechanism.
3. ELASTICITY
Sloman Chapter
2: Supply and
demand Sections
2.1 – 2.3
Sloman, Section
2.4 Elasticity &
Chapter 3:
Government
intervention in
the market
Sloman, Chapter
4: Background to
demand.
To extend your understanding of demand
and supply theory, including:
 elasticity of demand and supply
 applications
 the effects of government policy e.g.,
price ceilings, taxation.
To deepen your understanding of
consumers’ choices.
 The meaning and measurement of
utility
 Indifference curves
 Budget constraints
 Equilibrium of the consumer
 Income and substitution effects
 Derivation of the demand curve
 Consumer’s surplus
To understand in more detail the Sloman Chapter
determinants of supply, including:
5: Background to
supply
 The production function
 Diminishing returns
 Returns to scale
 Isoquants and isocosts
 Short- and long-run cost curves
Equilibrium of the profit-maximising
firm
4. UTILITY AND THE MODEL
OF RATIONAL CONSUMER
CHOICE
5. PRODUCTION AND COST
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MICROECONOMICS: TEACHING AND STUDY GUIDE (continued)
TOPIC
OBJECTIVE
REQUIRED
READING
6. MARKET STRUCTURE:
PERFECT COMPETITION
5. MARKET STRUCTURE:
PURE MONOPOLY; PERFECT
CONTESTABILITY
6. IMPERFECT COMPETITION:
MONOPOLISTIC COMPETITION
To develop an understanding of the
model of perfect competition (and the
purpose of this model) including
 Short- and long-run equilibrium of
the firm and industry
 Derivation of the supply curve of the
firm and industry in the short- and
long-run
To understand the relationship between
the structure of an industry and firms’
behaviour, including
 Pure monopoly
 Discriminating monopoly
 Contrasts with perfect competition
 The theory of perfect contestability
To understand profit maximising choices
made by firms that are monopolistically
competitive.

7. IMPERFECT
OLIGOPOLY
COMPETITION:
8. THE ECONOMICS OF
LABOUR MARKETS
9. WELFARE ECONOMICS
Monopolistic competition
To understand the relationship between
the structure of an industry and firms’
behaviour, including
 Duopoly and oligopoly
 Kinked demand curves
 Game theory
To understand the economics of labour
markets, including
 Demand and supply of factors of
production
 Marginal productivity theory
 The individual’s supply of labour
To introduce the use of normative
(welfare) economics to guide economic
policy, including
 Pareto optimality
 Allocation and distribution
 Market failure & role of government.
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Sloman Chapter
6: Profit
maximisation
under perfect
competition and
monopoly,
Sections 6.1 –
6.2.
Sloman Chapter
6: Profit
maximisation
under perfect
competition and
monopoly,
Sections 6.3 &
6.4 and Section
7.3
Sloman Chapter
7: Profit
maximising
under imperfect
competition,
Section 7.1
Sloman Chapter
7: Profit
maximising
under imperfect
competition,
Section 7.2.
Sloman Chapter
9: The theory of
the distribution
of income.
Sections 9.1 and
9.2
Sloman Chapter
11: Markets,
efficiency and the
public interest.
See also Section
12.1: Economics
of the
environment.
Microeconomics: Further reading and study guide
For each topic, your study of economics begins by reading the chapters in Sloman (2003)
detailed above, attending lectures and participating in classes. Your personal study should
build on this by reinforcing, testing and extending your understanding of the concepts and
principles learned.
1. Reinforce your understanding.
There is a wide range of excellent introductory economic theory textbooks available. If you
still find a particular concept difficult to understand, try consulting an alternative textbook
(the chapters relevant to each topic are usually easy to identify). Sometimes a slightly
different explanation helps. The following are recommended and are available in our library:



Parkin, M., Powell, M., Mathews, K. (2003) Economics 5th edition. Addison Wesley
[library: MAIN 330 PAR]
Samuelson, P.A., Nordhaus, W.D. (1995) Microeconomics, 15th edition, McGraw Hill.
Begg, D., Fischer, S., Dornbusch, R. (2003) Economics, 7th edition, McGraw Hill.
[library: MAIN 330 BEG]
2. Practice and apply the concepts.
Sloman (2003) - and most of the textbooks listed above - are accompanied by workbooks or
study guides. It is strongly recommended that you monitor your own progress by working
through the exercises relevant to each topic.
 Sloman, J., Sutcliffe, M. (2000) Student workbook and reader, (to accompany Sloman)
Prentice Hall, 4th edition. [library: MAIN 330 SLO]
 Smith, P. (2000) Workbook (to accompany Begg, Fischer and Dornbusch ), McGraw Hill.
[library: MAIN 330 BEG]
 Atkinson, B. (2000) Study Guide. (to accompany Parkin, Powell and Matthews), Addison
Wesley. [library: MAIN 330 PAR]
3. Test your understanding
Attempt the quizzes available in the module on Cityspace (as they become available.)
Attempt the exercises and tests available on the websites accompanying the textbooks.
 The website for the Sloman book is:
http://swx.prenhall.com/bookbind/pubbooks/sloman_ema
Prentice Hall provide good support to students on this web site and a representative from
the company will give a short talk at the first lecture.

The website for Begg, Dornbusch and Fischer is:
http://highered.mcgraw-hill.com/sites/0077099478. Then click Student Centre and
the Chapter you want to check.
 The website for the Parkin book is: www.econ100.com
Attempt previous years’ exam papers for this course. Examination papers for 2000 – 2003
are available from the library’s website: www.city.ac.uk/library/unilib/exams/econ.html.
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4. Extend your knowledge
An important aspect of training in economics is the development of skills in numeracy. This
course uses basic mathematical concepts. Students intending to major in economics are
particularly encouraged to familiarise with the expression of economic problems in
mathematical form. The following are recommended, and are available in our library:



Archibald, G.C., Lipsey, R.G. (1973) A mathematical treatment of economics,
Weidenfeld and Nicholson. [library: 330.0151 ARC]
McKenna, C.J., Rees, R. (1992) Economics: a mathematical introduction. Oxford.
[library: 330.0151 MCK]
Thomas, R. (1999) Using mathematics in economics, Longman. [library: 510.2433 THO]
5. See economics in context as a social science
The methods and concerns of economics have application beyond simply market transactions.
Two recent contributions by economists to this broader sphere can be found in the following
leisure time reading:
Layard, Richard (2005) Happiness Allen Lane.
Levitt, S.D., and Dubner, S.J. (2005) Freakonomics Allen Lane.
ACCESSING COURSE MATERIALS
You will automatically be registered on the module via WebCT (also known as Cityspace).
Log on to the Web and visit https://uss2.city.ac.uk/WebCTV3/. (Bookmark it as a favourite in
your web browser.) This will provide you with materials such as:
 Copies of each week's lecture notes
 Multiple choice quizzes to test your understanding
 Copies of the course work questions
You will need to consult the site regularly since materials will only be available within a
fixed time span – e.g. lecture notes 3 days before and one week after each lecture. If you
access from outside the university your browser may need adjusting e.g. to allow pop-ups and
Java scripts. Details will be provided when you first access Cityspace.
Since WebCT is a new departure for this module we may not be using all its features
immediately. As a contingency in case of difficulties with registration, etc. for the first few
weeks only materials will also be available on my personal web pages at
http://www.staff.city.ac.uk/j.s.cubbin/.
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ASSESSMENT
Coursework and exams will be weighted 0.2 and 0.8 respectively.
Two items of coursework are to be completed. Use the following Table as a check-list to
make sure you have completed or have planned to complete both.
COURSEWORK CHECKLIST
Coursework requirements
1. Essay in microeconomics
An essay topic will be set
during the course of Term 1.
An essay of no more than
1,500 words must be
submitted by 5pm on
Monday November 20th
2005.
2. Essay in macroeconomics
An essay topic will be set
during the course of Term 2.
An essay of no more than
1,500 words must be
submitted by 5pm on
Monday March 13th 2006.
Weighting
0.5 of the
coursework
requirement
for this
module
Note now in your diary…
This coursework is due November 20th
2005.
0.5 of the
coursework
requirement
for this
module
This coursework is due March 13th
2006.
All written coursework must be posted in the box provided on the lower ground floor of
the social science building, and electronically via WebCT. Please ensure that the hard copy
of your work has a cover sheet clearly marked with your name in BLOCK CAPITALS and
the name of your class tutor. Without these details, correct and in legible form, your work
may not get marked, or, if marked, correctly recorded. These cover sheets are available
outside the Economics Department office. There is a page describing the criteria for marking
written ITE coursework, at http://www.city.ac.uk/andy/teaching/ite/criteria.htm.
Important: To avoid the risk of scoring zero for your submission, see also the notes on
plagiarism at:
http://www.city.ac.uk/social/dps/Economics%20Plagiarism.pdf. Note that your submission may be
analysed using plagiarism alert software.
Part I as a whole will contribute 10% to the final degree classification aggregate (the
weightings on second and third years are Part II: 30% and Part III: 60%).
Progress to the second year is dependent on your passing the examinations in the
Summer term and satisfactorily completing the coursework during the year.
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ITE FINAL EXAMINATION, SUMMER 2006
At present we intend that the rubric for the 2006 examination will be the same as last year:
Time allowed: 3 hours
Format: There will be three sections, as follows:
Section A: answer 10 compulsory short-answer questions (worth 4 marks each) = 40 marks
Section B: answer 2 out of 4 micro essay questions (15 marks each) = 30 marks
Section C: answer 2 out of 4 macro essay questions (15 marks each) = 30 marks
Past examination papers can be accessed, from City machines only, on the Library’s web
pages at http://www.city.ac.uk/library/unilib/exams/econ.htm. Previous years’ papers are
available in hardcopy only from the Short Loan Collection at the Northampton Square
Library. Remember, when you are looking at these, that the structure of exam has varied
from year to year.
This year the BSc programme is undergoing a review. In the event that we decide to change
the examination rubric you will be informed in good time.
John Cubbin
September 2005
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