AB0901

PRINCIPLES OF ECONOMICS: A SINGAPORE PERSPECTIVE

Academic Year

: 2013 2014

Course Coordinator

: Siang Ng

Pre-requisites

: Nil

No. of AUs

: 3

Semester:

Course Description and Scope

This course aims to provide a basic understanding of Economics. The first portion of the course will
cover topics in Microeconomics such as the theory of consumption, the theory of production and
market structures. The second portion of the course will cover topics in Macroeconomics such as
Gross Domestic Product, inflation, Unemployment, Fiscal Policy, Monetary Policy, Nominal and Real
Exchange Rate, Purchasing-power Parity Theory and International Flow of Goods and Capital.

Course Learning Objectives

After the course, students should be able to:
Explain the concepts of demand, supply, elasticity, efficiency, GDP, inflation and unemployment
Apply economic models to analyze impact on market and economy when shock occurs
Calculate revenue, cost and output for firms
Compare and contrast different market structures
Analyze the effect of government policies on market and economy
Discuss an open economys interaction with the rest of the world.

Learning & Teaching Methods

Lectures
Tutorials

:
:

2 hours per week

1 hour per week

Course Assessments
Components

Marks

Individual/Group

Quizzes

20%

Individual

Class Participation

10%

Individual

Final Examination

70%

Individual

Total

100

Reading and Reference

Basic Text: N Gregory Mankiw, Euston Quah, Peter Wilson, Principles of Economics: An Asian
Edition, Cengage Learning 2013. (referred to as MQW in the weekly topic reading below)
Other references may be given in lectures.

Distributed by Nanyang Business School, Nanyang Technological University. All Rights Reserved

Course Teaching Staff

Instructor/tutor
Siang Ng

Office
Location

Phone

HSS- 04-73

Email
siangng@ntu.edu.sg

Suman Kamari Sharma

sumansharma@ntu.edu.sg

Jackson Teh Wah Yock

WYTEH1@ntu.edu.sg

Ou Kun

KOU001@ntu.edu.sg

Lyon Loh

LLOH002@ntu.edu.sg

Proposed Lecture Schedule

Teaching Week
1
13 Jan 14

2
20 Jan 14

3
27 Jan 14

4
3 Feb 14

5
10 Feb 14

Topics
MICROECONOMICS:
Lecture 1:
Introduction
How people make decisions
How people interact
How the economy as a whole works
The economist as scientist
The economist as policy adviser

Readings

Lecture 2:
Supply and Demand I: How Markets Work
Demand
Supply
Supply and demand together
The elasticity of demand
The elasticity of supply
The applications of supply, demand and elasticity
Control on prices

MQW Chapters 4-6

Lecture 3:
Supply and Demand II: Markets and Welfare
Consumer surplus
Producer surplus
Market efficiency
The deadweight loss of taxation
The determinants of the deadweight loss

MQW Chapters 7-9

Lecture 4:
Firm Behavior and the Organization of Industry I
Production and costs
The various measures of cost
Costs in the short run and the long run
What is a competitive market
Profit maximization and competitive firms supply curve
The supply curve in a competitive market

MQW Chapters 1314

Lecture 5:
Firm Behavior and the Organization of Industry II Monopoly, Oligopoly and Monopolistic Competition
Monopoly
How monopolies make production and pricing decisions
The welfare cost of monopoly

MQW Chapters 1517

MQW Chapters 1-3

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Teaching Week

Topics
Public policy toward monopolies
Price discrimination
Oligopoly
Markets with only a few sellers
Game theory and the economics of cooperation
Public policy toward oligopolies
Monopolistic competition
Competition with differentiated products
Advertising

Readings

NOTE: The Microeconomics Quiz will be held NEXT

WEEK (Week 6). There will be 10 Multiple Choice
Questions, covering material from Lectures 1-4. You
will take the quiz during the second half of tutorial 5.
6
17 Feb 14

7
24 Feb 14

3 March 14 to
7 March 14
8
10 march 14

9
17 march 14

Lecture 6:
The Economics of Public Sector
Externalities and market inefficiency
Private solutions to externalities
Public policies toward externalities
Public goods
Common resources
MACROECONOMICS:
Lecture 7:
GDP, Unemployment, Inflation, and Economic Growth
Major macroeconomic issues
The measurement of GDP
The components of GDP
Real vs nominal GDP
The consumer price index
Correcting economic variables for the effects of inflation
Unemployment and natural rate

MQW Chapters 1011

MQW Chapters 2324, and 28

Recess week

Lecture 8:
Saving, Investment and Financial System
Productivity and growth
Financial system
Saving and Investment in the national income accounts
Market for loanable funds

MQW Chapters 2526

Lecture 9:
Money, the Price Level and Inflation
The meaning of money
The central banking system
Banks and the money supply
The Classical theory of inflation
The costs of inflation

MQW Chapters 2930

Distributed by Nanyang Business School, Nanyang Technological University. All Rights Reserved

Teaching Week
10
24 March 14

11
31 march 14

Topics
Lecture 10:
Aggregate Demand and Aggregate Supply
Three key facts about economic fluctuations
Explaining short run economic fluctuations
The aggregate demand curve
The aggregate supply curve
Two causes of economic fluctuations
How monetary policy influence aggregate demand
How fiscal policy influence aggregate demand
Using policy to stabilize the economy

Readings
MQW Chapters 3334

Lecture 11:
Inflation and Unemployment
The Phillips curve
Shift in the Phillips curve the role of expectation
Shift in the Phillips curve the role of supply shocks
The cost of reducing inflation

MQW Chapter 35

NOTE: The Macroeconomics Quiz will be held NEXT

WEEK (Week 12). There will be 10 Multiple Choice
Questions, covering material from Lectures 7-10. You
will take the quiz during the second half of tutorial 11.

12
7 April 14

13

Lecture 12:
Open Economy Macroeconomics
The international flows of goods and capital
The prices for international transactions: real and nominal
exchange rates
Purchasing power parity
Supply and demand for loanable funds and foreign
currency exchange
How policies and events affect an open economy

MQW Chapters 3132

Lecture 13:
Review Lecture

14 April 14

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