Introduction to economics
Dr Ian Wills
4 points
* 2 hours per week
* First semester
* Clayton
*
Prerequisites: none
Objectives On successful completion of this subject students should be familiar with the economic way of thinking about choices between alternatives; recognise property rights, markets and prices as social coordination mechanisms, and the conditions under which markets work well and poorly; understand how markets incorporate information about both people's wants and available supplies of valued goods and services, and provide incentives for people to respond to the desires of others' appreciate the importance of information costs as an impediment to market functioning and government planning; be able to use basic economic concepts as an aid to understanding environmental problems.
Synopsis The economic concept of scarcity and the consequent need for social coordination in resource use, market and central planning systems of coordination. The economic concepts of demand, costs, supply and market power. Market and price determination. The costs of market exchange. Interactions between the economy and the environment. Environmental problems as the result of a lack of market signals about, and incentives to respond to, other people's concerns about use of the natural environment. Prohibitive costs of market exchange as a barrier to market signals and incentives. The advantages and disadvantages of government planning as an alternative signalling and incentive system.
Assessment Written assignment (1000 words): 30%
* Essay (750 words):
20% Examination (100 minutes) 50%
Prescribed texts
A detailed reading list will be provided at the beginning of the course
Recommended texts
Heyne P The economic way of thinking 1987
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