300210 - INTRODUCTION TO ECONOMY

Subject type: Basic

Coordinator: Judith Turrión Prats

Trimester: First term

Credits: 6

• Spanish
• English

Spanish (80%), English (20%)

Basic concepts of economic science, its fundamental principles and the operating guidelines that derive from it.

The aim of this class is to familiarize students with basic microeconomic concepts such as market, consumers, costs and benefits, supply and demand, among others.
Basic microeconomic mechanisms such as profit maximization, market equilibrium, and profit optimization within the course will be discussed and developed. The focus is on the role of government in the market economy with concepts such as taxes, price regulation and externalities.

The classroom (physical or virtual) is a safe space, free of sexist, racist, homophobic, transphobic and discriminatory attitudes, either towards students or teachers. We trust that together we can create a safe space to learn without having to suffer prejudices from others.

• Know and understand the basic concepts and principles of the functioning of contemporary economies -with special reference to the tourism sector- emphasizing the study of markets and their agents: companies, consumers, public administrations, and the interrelationships that exist between them.
• Differentiate the various economic structures of the market and analyze their competitive strategy.
• Analyze the microeconomic environment and evaluate the strategies of companies under their environment. Understand and apply the fundamental concepts and laws that govern the market economy: market demand and supply, equilibrium prices and quantities, elasticities, etc.
• Master the mathematical aspects of economic and / or business problems for decision making.
• Identify and interpret simple mathematical models applicable to economics.

Theoretical sessions MD1.

Lectures: Lectures based on the teacher's explanation in which all students enrolled in the subject attend.

MD5 directed learning.

Seminars: Face-to-face format in small work groups (between 14 and 40). These are sessions linked to the face-to-face sessions of the subject that allow to offer a practical perspective of the subject and in which the participation of the student is key.

Autonomous learning MD9.

Exercise and problem solving: Non-contact activity dedicated to solving practical exercises based on the data provided by the teacher.

MD11. Non-contact tutorials.

Students will have telematic resources such as e-mail and ESCSET intranet resources.

1. The concept and method in economics

1.1. What is economics.

1.2. Methodology of economics.

1.3. Normative economy and positive economy.

1.4. Applications.

1.5. Scarcity, choice and productive factors.

1.6. The frontier of production possibilities (FPP).

1.7. Opportunity cost.

1.8. Law of decreasing returns.

1.9. Microeconomics and macroeconomics.

1.10. Graphic representations in economics.

2. Specialization, exchange and money

2.1. Specialization and exchange. Market efficiency.

2.2. Absolute and comparative advantage.

2.3. Economies of scale.

2.4. Exchange and monetary economy: the functions of money.

3. Market mechanisms: supply and demand

3.1. The determinants of demand and its displacements.

3.2. The determinants of supply and their displacements.

3.3. The balance of the market.

3.4. The laws of supply and demand.

3.5. Applications of supply and demand analysis.

4. The elasticity of supply and demand

4.1. The elasticity of demand: price, substitution and income.

4.2. The elasticity of supply.

4.3. The elasticity of producers' income and consumer spending.

5. The theory of consumer choice.

5.1. The budget constraint.

5.2. Consumer preferences. The gender perspective in consumer behavior

5.3. Optimization in consumer choice.

5.4. Obtaining the demand curve.

6. The role of the state in the economy

6.1. The diversity of economic activities and economic agents.

6.2. Maximum and minimum prices (effective and ineffective).

6.3. Externalities (usually). Carbon markets

7. The company in a perfectly competitive market

7.1. Maximizing profits in a competitive company. 

7.2. Demand and marginal income of the company.

7.3. Optimal production and supply curve of the company in the short and long term.

7.4. Company response to variations in factor costs.

7.5. Answerable markets: entry and exit of companies; externalities.

8. Market power and pricing

8.1. The monopoly: inefficiency and social cost of the monopoly.

8.2. Price discrimination.

8.3. Bilateral monopolies and monopsons.

8.4. Vertical integration and transfer pricing.

8.5. Regulation of monopolies.

8.6. Absence of strategic behaviors (simultaneity of actions): Cournot's solution and Bertrand's solution.

8.7. Strategic behaviors (sequential actions): Stackelberg solution.

8.8. Joint profit maximization: collusion and cartel.

8.9. Barriers to entry.

9. Game theory and competitive strategy

9.1. Cooperation and conflict.

9.2. Alternative coordination mechanisms.

9.3. The institutional framework: property rights.

9.4. Nash equilibrium and Pareto optimums.

9.5. Nash's perfect balance in subplots.

Classes combine economic theory with empirical examples.

Attendance at all sessions is essential to understand the material of the subject. Attendance means active participation in face-to-face sessions and independent study outside the classroom.

During the term students will develop empirical work related to the microeconomic situation of the environment, simulating a real situation where theoretical knowledge will serve to meet the challenges of the work. 

The seminars are taught in person. These are sessions linked to the face-to-face sessions of the subject that allow to offer a practical application of the economic reality and in which the participation of the student is key to weigh the capacity to apply the theoretical concepts to the current economic frame.

The final mark of this course will consist of the following compulsory elements:

SE4, Final Exam: 50% (RECOVERABLE ONLY IF THE FINAL EXAM IS TAKEN)

Group work (50%) divided into:

• Written work of maximum 10 pages: 20% (RECOVERABLE)
• Presentation of the written work at the end of the course: 10% (NOT RECOVERABLE)
• Delivery of a set of exercises and participation: 20% (NOT RECOVERABLE)

It is essential to pass all parts of the course with a grade of 5 to pass the course. The final cut-off mark to pass the course will be a 5/10.

Students who do not take the final exam will not be able to take the resit exam.

The student will only be able to retake the final exam and not the parts of the continuous assessment.

MANKIW, GREGORY (2017). "Principles of Economics". Publisher: CENGAGE Learning; 8th Edition, Boston.

PARKIN, MICHAEL (2018). "Economy" Publisher: Pearson; 12th Edition, Mexico. 

SAMUELSON, PAUL & NORDHAUS, WILLIAM (2010). "Economy. With applications in Latin America”. Publisher: McGraw Hill; Nineteenth Edition, Mexico.

Wang, Weihua & Kim, Saebum (2019). Lady first? The gender difference in the influence of service quality on online consumer behavior. Nankai Business Review International.