COURSE OUTLINE
BSNS104
PRINCIPLES OF ECONOMICS 1
Semester 2, 2016
BSNS104: Principles of Economics 1 (18 points)
Have you ever stopped to wonder at how easy it is, given you have the cash, to go out and buy
almost anything you want? How is it that such a wide range of goods and services are produced
in roughly the right amounts often at surprisingly low cost, and then distributed to the people
who want them? This paper builds an understanding of how, and how well, our market-oriented
economy gets this done. We use a variety of simple yet revealing graphical models to study the
mechanics of markets and the market system, and to evaluate the outcomes. We identify
factors that can inhibit markets functioning, and evaluate public policies used to counter-act
these inhibitors, both in individual markets and in the macro economy. In particular, we study
issues around international trade, business strategy, competition policy, the environment,
taxation, and cycles in exchange, interest, unemployment and growth rates.
Lectures: Tuesday, Thursday and Friday at 3:00-3:50 pm or 4:00-4:50 pm
This Course Outline contains information about BSNS104’s administration and the course
overall (FAQs, assessment, course materials, topics covered).
All other information about the course, including announcements, course materials and
marks on internal assessment, will be posted on the BSNS104 Blackboard site accessed via:
https://blackboard.otago.ac.nz/
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FAQs
Answers to some of the more Frequently Asked administrative Questions:
Q: When do tutorials begin?
A: In the second week of lectures, starting 18 July
Q: I haven’t been assigned to a tutorial stream OR I have been assigned to a tutorial stream
that does not suit me. What do I do?
A: Look for one or two other streams that suit you and email Terry ([email protected])
to check that there’s room.
Q: I missed my tutorial. What do I do?
A: Hopefully it is possible for you to attend another tutorial group sometime that same week.
Just go to any one that suits you and check with the tutor that there is enough room.
Q: I can’t make it to the mid-semester test as I have another commitment. What do I do?
A: Nothing. Plussage (explained below) automatically applies if you miss the midterm (for
whatever reason). You don’t need to inform us if you don’t attend the test.
Q: Are lecture slides handed out in class?
A: No, but you can download them from Blackboard before the lectures are held.
Q: I missed a lecture. What do I do?
A: Download the lecture slides from Blackboard and read the relevant material in the textbook.
Try and get notes off a friend who was at the lecture. If there is still something you don’t
understand, then feel free to go and ask the lecturer about it during his office hours.
Q: Do I have to do the weekly quizzes?
A: Yes, if you want the marks. Each quiz contributes 1% toward your grade, so your best ten
quizzes contribute 10%.
Q: Can I work on the quizzes with other people?
A: Yes. In fact we recommend that you do. But each person in your study group has to enter his
or her answers separately on Blackboard.
Q: I forgot to submit my quiz answers on time. Can I email my solutions to the lecturer?
A: No. We will not accept late submissions. However, we will count only your ten best quizzes,
so you can miss one without any loss, and each additional missed quiz costs only 1 mark
toward your final grade.
Q: Do I have to buy the textbook for this course (Gans, King, Stonecash, Byford, Libich and
Mankiw, Cengage Learning, 6th ed. 2015)?
A: No. You do not have to buy it but we advise that you read it. Several copies are available on
Close Reserve in the Central Library that you can borrow for two hours at a time. You can
also buy it as an ebook or buy individual chapters from the publisher’s website.
Q: Can I use Principles of Economics, University of Otago Custom Edition (used in 2014) or
earlier editions of the Gans et al. text book (e.g., 4th or 5th edition)?
A: Yes you can, though the custom publication contains a Macroeconomics part that differs
somewhat from the exposition in Gans, King, Stonecash, Byford, Libich, Mankiw (6th ed.).
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BSNS104 in the BCom degree and Economics major
BSNS104 is part of the business core and is required for ALL students enrolled in the Commerce
Degree at Otago. Economics is a fundamental social science discipline from which each of the
functional areas of business (such as Finance, Marketing, Accounting and various aspects of
Management) has derived some of its core principles and concepts.
BSNS104 is also the first of two introductory papers, along with ECON112, that are required for an
Economics minor or major as part of a BCOM, BA , BSc or BApSci degree. Including ECON112 in
your course not only gives you a much more complete introduction to Economics, but also gives
you the flexibility to be able to carry on to higher-level papers in Economics, and thereby
complete a minor or major in economics if you wish.
Note that ECON112 is offered only in Semester 2 and Summer School!
A major in Economics requires, in addition to BSNS104 and ECON112, three 200-level papers, and
four 300-level papers.
There are two streams in the Economics major. The one most people take concentrates less on
the maths and more on the economics. The other is more maths orientated and prepares you to
carry on to an Honours or Master’s degree in your fourth year.
A minor in Economics requires, in addition to BSNS104 and ECON112, two 200-level papers and
one 300-level paper.
See our department website for more information about the people in our department and
opportunities for study and research in Economics: http://www.business.otago.ac.nz/econ/.
Pre- and co-requisites
There are no pre-requisites beyond those for University Entrance (basic literacy and numeracy).
BSNS104 does not assume prior knowledge of Economics. If you performed well in high school
Economics, English and Maths you may be able to take ECON112 instead of BSNS104. To see if this
will work for you, go see Alan King in Commerce 712 as soon as possible.
If you think you might want to do Honours or a Master’s degree in Economics, first year statistics
(BSNS102 or STAT110) and calculus (FINQ102 or MATH160) are required to carry on to the maths
orientated papers in second year Economics. Even if you are doing an ordinary degree in
Economics, these papers are still useful.
BSNS104 Course staff
Lecturers:
Weeks 1-7: Stephen Knowles (Course Coordinator)
707 Commerce Building (479) 8350
[email protected]
Office hours: Monday 2-3; Wednesday 1-2; Thursday 1-2
Weeks 8-12: Mark Millin
715 Commerce Building (479) 4565
[email protected]
Office hours: TBA
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Senior Tutor and Course Administrator
Terry Kerr
716 Commerce Building (479) 8647
[email protected]
Office hours: TBA
Note: ALL administrative queries about the course (e.g. those about tutorial streaming, internal
assessment, etc.) should be directed to Terry. Questions about the lecture material should be
directed to the appropriate lecturer.
Assessment: Weekly Quizzes, Mid-Semester Test and Final Exam
Your learning will be assessed in three ways:
Assessment
Weekly quizzes
Mid-semester test
Final examination
Weight
10%
30%
60%
Plussage
No
Yes
Not applicable
Weekly quizzes. Every Monday at 9:00 o’clock in the morning, starting Monday 18 July, we will
post a quiz on Blackboard. Each quiz will consist of 12 multiple choice questions similar to
what you can expect to see on the mid-semester test and final exam. The quiz will be
available to work on for one week only, when the next quiz will appear.
You will submit your answers to the quiz on Blackboard, which marks your quiz automatically
and posts your result to Grade Centre. You are welcome, in fact encouraged, to work with
other people on the quiz, but you must submit your answers individually before the next
quiz appears at 9:00 am on the following Monday. There will be a total of 11 weekly quizzes.
Each of your ten best quizzes will count 1 mark (1%) toward your final course mark. So, you
can miss one quiz without any loss. We will also count up to 10 correct answers out of a
possible 12, so you can get two questions incorrect and still receive the full mark for the quiz.
If you get fewer than 10 answers correct on any given quiz, you will receive the relevant
percent of a mark for the quiz, e.g. if you get six correct you get a mark of 0.6 for the quiz.
Mid-semester test. We will schedule a test for an evening in the week beginning 22 August
2016 (but this will definitely not be on the Friday). The day, time and room allocation will be
announced in lecture and on Blackboard well before the test. The test covers all the material
from the first six weeks of lectures and the first five tutorials. It will consist of multiple-choice
and short-answer questions. The test is of 60 minutes duration.
It’s not possible to sit this test at any other time than this. Plussage (explained below)
automatically applies if you do not attend or turn in the test. There is no need to let us know if
you cannot attend the test.
Final exam. The final exam covers material from any part of the course, and consists of multiplechoice and short-answer questions. The University will report the exam timetable later in
Semester 2. The final exam is of two hours duration.
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We will provide you with a sample exam near the end of lectures so that you have an idea of
the style of questions you will be asked in the final exam. Past exams for BSNS104 are not
available on either Blackboard or the Library’s exam webpage.
Anyone who has enrolled in the paper can sit the final exam. That is, there is no “terms
requirement” for BSNS104. We consider that you are capable of taking responsibility for your
own learning. Nevertheless, we recommend that you attend all lectures and tutorials and
study for and sit the mid-semester test, i.e. make full use of the resources available to you.
Plussage means that your mid-semester test mark will count towards your final mark only if it
exceeds (in percentage terms) your final exam mark. We calculate your final mark in two ways:
weekly quizzes (10%) + mid-semester test (30%) + final exam (60%)
weekly quizzes (10%) + final exam (90%)
Your final mark is the higher of the two. In other words, if your mid-semester test mark in
percentage terms is lower than your final exam mark (or if you were absent from the midsemester test) then your final exam mark contributes 90% to your final mark.
The aim of plussage is to enable students who perform poorly on an internal assessment to
demonstrate improvement on the final exam. Your grade thereby better reflects what you
know at the end of the paper.
The risk with plussage is that it can tempt you to skip the mid-semester test or not prepare for
it seriously. We advise that you resist this temptation because:

The test is good preparation for both the final exam and the material in the second half of
the semester, and provides feedback on how well you are coping with the course material.

Many people do better in the mid-semester test than in the final exam, so it’s likely that
sitting the test will improve your final mark.

Your performance on the mid-semester test factors in to determine your eligibility for ‘Final
Exam Only’ should you fail the paper and the form of ‘Special Consideration’ that might be
offered should you be ill or otherwise impaired during the final exam.
Your scores on quizzes and the mid-semester test will be posted on Blackboard’s Grade
Centre. Make sure that you check occasionally to verify that internal assessments are getting
recorded properly.
If you have queries relating to any of the assessments, please contact Terry Kerr
([email protected]).
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Course materials and resources
Readings. This course and ECON112 are organised around the textbook:
GANS, KING, STONECASH, BYFORD, LIBICH AND MANKIW, 2015. Principles of Economics: Australia
and New Zealand Edition, 6th edition. Melbourne: Cengage Learning.
You can access the material in the textbook in a variety of ways:




The University Bookshop has paperback copies for sale.
You can buy an electronic version of the textbook or of individual chapters from the
publisher’s website: https://cengage.co.nz/product/division/higher/title/principles-ofeconomics-australia-and-new-zea/isbn/9780170248532
There are six copies of the textbook on Close Reserve in the Central Library, which you
can borrow for two hours at a time.
Obtain a second-hand copy of the custom reader used in 2014:
MANKIW, GANS, KING, STONECASH, BANDYOPADHYAY, AND WOODING, 2012. Principles of
Economics 1st edition. Melbourne: Cengage Learning. (ISBN 9780170224819 / 0170224813)
How you access the textbook material is entirely your decision.
Lectures and lecture slides. Lectures are given at 3:00 o’clock and repeated at 4:00 on Tuesday,
Thursday and Friday each week. You can attend either the 3 or 4 o’clock lecture (or both) as
long as there’s room.
We will post lecture slides before lectures on BSNS104’s Blackboard site. The slides will not
include all the details of the lecture. You can download and print the slides before lecture in
any format you like, so that you can add your own notes to them during the lecture.
Photocopies of the slides will not be available to pick up at lecture.
There will also be some work, especially development of graphs, done by hand during lecture
and projected on the screen. Seeing this development first hand and reproducing them in your
notes during lectures is a good way to learn about how these graphs are developed and
interpreted, but we will post scans of this material on Blackboard after the lecture.
Tutorials. Tutorials begin in week 2. Look on eVision to find out to which tutorial stream you
have been allocated. Try to attend the tutorial you are streamed to, but if that’s not suitable
then look for one or two other streams that suit you and email Terry
([email protected]) to check that there’s room. Tutorial questions will be posted on
Blackboard at the beginning of the week. Have a go at the questions before the tutorial so
that you come prepared to participate in the discussion during the tutorial.
Working through the tutorial questions provides the opportunity to:
practice and apply the concepts introduced in lectures
learn how to deal with the short-answer questions in the test and final exam
participate in relatively small group discussion.
If you have any queries relating to tutorials please contact Terry Kerr
([email protected]).
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Course content
Learning objectives. The aim of this course is to give you an introductory understanding of how
our mixed market economy operates, and how to apply that understanding to help you make
better business and personal decisions.
At the end of this course, you should be able to:
1. Explain in concept, with the aid of appropriate diagrams, how a competitive market and
the market system allocate scarce resources, how they respond to changing conditions,
and how well a competitive market and the market system perform.
2. Identify factors that in practice inhibit the functioning of individual markets and the
market system, describe and evaluate the effects of these inhibitors and the rationales for,
and effects of, various government interventions in the market economy.
3. Describe measures of macroeconomic performance and evaluate the short-run
macroeconomic consequences of fiscal and monetary stabilisation policies in open and
closed economies.
4. Present, with the aid of appropriate diagrams, cogent economic reasoning in concise
written statements.
Outline. The textbook is designed for a two-semester course. As some of you will choose not to
take ECON112, we selected chapters that provide a good general introduction to economics.
Many of the remaining chapters are interesting and important and are covered in ECON112.
We will cover the topics and chapters in the order shown below.
1. The gains from trade
Ch. 2, 3
2. Mechanics of a competitive market
Ch. 4
3. Responsiveness of market participants to change
Ch. 5
4. Evaluating market performance
Ch. 7
5. Market effects of an excise tax or subsidy
Ch. 6, 8
6. Market effects of international trade
Ch. 6, 9
7. Factors that inhibit market performance
8. Behavioural economics
9. Competitive markets
Ch. 10, 11 (parts)
Additional reading (TBA)
Ch. 14
10. Monopoly markets
Ch. 15
11. Competitive firms with differentiated products
Ch. 16
12. Strategic interaction & competition policy
Ch. 17, 18
13. Intro to macroeconomics and measuring GDP
Ch. 24
14. Intuitive introduction to business cycles and policy
Additional reading (TBA)
15. Introduction to the analysis of unemployment
Ch. 28 (parts)
16. Measuring changes in the cost of living
Ch. 25
17. Saving, investment and the financial system
Ch. 27
18. Money, inflation and the monetary system
Ch. 29, 30
19. Open economy macroeconomics
Ch.31
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Disclaimer
While every effort is made to ensure that the information contained in this document is accurate,
it is subject to change. Changes will be notified in class and via Blackboard. Students are
encouraged to check Blackboard regularly. It is the student’s responsibility to be informed.
How much time to devote to this course?
The University’s ‘rule of thumb’ for an 18 point Semester course is 10 hours per week. Four of
these hours are spent in lectures and a tutorial each week – leaving six hours per week for your
own reading, study and revision, and working through the weekly quiz.
Where are Stephen, Mark and Terry’s offices?
Reception for the Department of Economics is on the 7th Floor of the Commerce Building, and is
open 9.00-3.30pm Monday to Friday. Stephen, Mark and Terry’s offices are on the 7th floor (office
phone numbers are listed on pages 3 and 4).
Notices via email
Blackboard allows us to email the whole class about important events/issues. These emails will be
sent to your student email address, so either check it regularly or set your student email to
forward to your personal account.
Class representatives
A Class Rep will be chosen sometime during the 1st week of lectures. Class Reps are able to
discuss problems with you and, if you wish, take them to the lecturers or to the Head of
Department. Don’t hesitate, however, to discuss problems with your lecturer or tutor.
Special consideration
If you consider your performance in the end-of-semester examination to be seriously impaired, or
if you are too ill to sit an examination, you can apply for Special Consideration. To do this you will
need to obtain an application form from the University Information Centre or Student Health and
submit it within five calendar days from the date of the last examination for which the
application applies, including supporting documentation, such as a medical certificate.
Academic integrity
Academic integrity means being honest in your studying and assessments. Academic Misconduct,
is a breach of Academic Integrity and is taken very seriously by the University. Types of
misconduct include plagiarism, copying others’ work, unauthorised collaboration, taking
unauthorised material into a test or exam, impersonation, and assisting someone else’s
misconduct. It is your responsibility to be aware of and use acceptable academic practices when
completing your assessments. For more information, visit the University’s Academic Integrity
page www.otago.ac.nz/study/academicintegrity or ask at the Student Learning Centre or Library.
Finally, we hope that you enjoy this course. We intend to!
Stephen, Mark and Terry
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