INTRODUCTION TO ECONOMICS

PROFESSOR: LUIS RIVAS

DEGREE: BACHELOR IN BUSINESS ADMINISTRATION
ACADEMIC YEAR: 2015-2016
DEGREE COURSE YEAR: FIRST SECOND THIRD FOURTH
1º SEMESTER 2º SEMESTER
CATEGORY: BASIC COMPULSORY OPTIONAL
NO. OF CREDITS (ECTS): 6 3
LANGUAGE: ENGLISH SPANISH
TUTORIALS: TO BE ARRANGED
FORMAT: PRESENTIAL
PREREQUISITES: NONE

1. SUBJECT DESCRIPTION

Over the past few decades, Economics has taken on a growing importance among scientific
disciplines and it is now included in introductory courses for most university degree programs.
Economic science studies human behavior in its attempt to satisfy the most urgent needs by
choosing among multiple possibilities in an environment of scarce resources, uncertainty and
subjective valuations. Thus the knowledge of economic science is basic to understand how
individual agents, typically interacting in decentralized markets, achieve collective ends.

Students in the Introduction to Economics course will get acquainted with basic economic
thinking and will get a general and overarching perspective on the skills and information to be
presented in subsequent economic theory courses. The final aim is that this methodology
becomes a useful tool that students can apply in their future professional career.

2. OBJECTIVES AND SKILLS

2.1. OBJECTIVES

Given its introductory nature, the basic objective of the course is to familiarize students with
basic economic concepts and with the methodology that scholars and practitioners in the
economic discipline use to understand and explain decision making and the economic problems
and phenomena that surround us. In this first course we will get a flavor on how markets work,
how prices arise through individuals´ interaction, and how public intervention may at times be
justified on social grounds and other times may be questionable if it leads to an outcome where
social welfare is smaller than that resulting from an environment with voluntary private
interaction. To do so we will go over basic concepts and tools and will sketch out the main
economic processes and relationships, in the fields of both microeconomics (feasible choices,
individual supply and demand, consumer and producer behavior, the workings of markets,
assessment of economic outcomes, public sector intervention, etc.) and macroeconomics
(national production and growth, employment and the labor market, the role of investment,
inflation, unemployment, fiscal and monetary policies, etc.).

Edited by IE Publishing Department.

Last revised, June 2015

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2.2. SKILLS

The Business Administration degree, through the study of Economic Theory, aims to develop
students’ ability to describe, analyze and understand the economic environment where business
takes place. More specifically, the Introduction to Economics course aims for the student to
make progress in several specific skills:

Cognitive (Know)
 Analyze the behavior of economic agents (consumers and businesses) and the operation of
markets.
 Understand economic institutions through the study of theories as to how the economy
works.
 Learn macro-aggregate economic concepts and their use.
 Understand the general workings of the overall economy over the short and the long run.
 Explore the use of economic models to make predictions about the real world.

Procedures (Know How)

 Apply economic criteria based on the use of technical tools to the analysis of simple
economic problems.
 Use the relevant information to evaluate the current economic environment and posible
evolution of business and markets.
 Use the course material to analyze new economic problems and reason in a rigorous and
systematic way.
 Identify the sources of relevant economic information.
 Draw relevant information from data that non-experts would be unable to appreciate.
 Improve the ability to present and discuss in a coherent manner, whether in a written text or
public exposition, the results of a specific economic study.

Attitude (Being)
 Improve individual problem solving, confront problems in a rigorous and systematic fashion
and think critically.
 Develop the ability to share and discuss the results with other students.
 Encourage an entrepreneurial and positive attitude when faced with new problems, and
encourage students to overcome failure.

3. METHODOLOGY AND WEIGHTING

As Mankiw states in his textbook, student should:

a) Summarize, don´t highlight

b) Test yourself
c) Practice, practice and practice
d) Study yourself and in groups
e) Don´t forget the real world: read the newspapers

Lectures
Each theory session is designed as follows:

a) 5 minutes: students give the professor the summary of the previous session. One of them
reads it for the whole class
b) 5-10 minutes: students give the professor a brief report they have prepared containing 5
news from different newspapers (five continents). One of them reads and comment them for
the whole class
c) 60 minutes: master class. Lectures will be highly dynamic, with the exposition of the main
points by the professor and active participation from the class, with questions, debates,
examples, cases, pictures, news and very brief videos (New York Times, Financial Times,
BBC, etc.).
d) 10 minutes: quick-exam (multiple choice test) of the readings arranged in the syllabus

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Practice
To gain a better understanding of the theory studied in class, students will practice by way of the
following:

Questions for review. The review of the theoretical content covered in each session through the
answer of several key questions proposed in class is an important way to learn. The student
should try to answer on his own to self-evaluate his understanding and progress.

Problems and applications. Students must prepare and solve the problem sets assigned prior to
the beginning of the practice class by using the theory lectures and the recommended
bibliography. The problem sets may be complemented by texts from the press relevant to the
topic at hand. Students are expected to participate actively in class, expressing their difficulties
and proposing solutions. The professor will clarify the solutions but this will be productive only if
the students have previously tried to work on their own.

Assignments. There will be individual and/or group assignments in which students will be tasked
with finding sources of information, putting theory into practice, systematizing, reasoning and
solving problems, etc. Some of these assignments may be presented in class.

Readings: various interesting readings related to the concepts learnt are compulsory. In fact,
they are evaluated through short questions at the end of the corresponding class (known in
advance)

Teaching Methodology Weighting Estimated time a student

should dedicate to prepare
for:
Lectures (40)% 60 hours
Discussions (10)% 15 hours
Exercises (10)% 15 hours
Group work (20)% 30 hours
Other Individual studying (20)% 30 hours
TOTAL 100% 150 hours, 6 ECTs course (30
sessions)

4. CONTENT

The course consists of three main parts: Introduction, Microeconomics and Macroeconomics.
Furthermore, these three parts may be broken down into eight subcategories: The first part of
the course introduces you to Economics and provides an overview of this science. The second
part introduces the concept of demand and supply. The third part deals with welfare analysis
and efficiency. The fourth part emphasizes the need to know how firms behave in markets. The
fifth part will provide you with a detailed understanding of Macroeconomics: GDP and CPI.
Finally, the sixth, seventh and eighth parts deal with long, medium and short run economics.
The course will consist of a total of 30 sessions. There will be a balance between theoretical
and practical classes.

PART 1: INTRODUCTION (Sessions 1 to 4)

 Presentation
 A tour of the world
 Ten principles of Economics
 Thinking like an economist
 Main international economic institutions and data sources
Chapters 1 & 2, Mankiw and Taylor (2011)
Theory, questions for review, problems and applications

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PART 2: SUPPLY AND DEMAND (Sessions 5 to 7)
 Supply, demand and equilibrium
 Elasticity, price ceilings and floors and its applications
Chapters 4, 5 & 6, Mankiw and Taylor (2011)
Theory, questions for review, problems and applications
Reading 1 (to be arranged)

PART 3: SUPPLY AND DEMAND II (Sessions 8 to 9)

 Welfare analysis, efficiency and market intervention
 International trade
Chapters 7, 8, 9 & 21, Mankiw and Taylor (2011)
Theory, questions for review, problems and applications
Reading 2 (to be arranged)

PART 4: FIRM BEHAVIOUR AND THE ORGANIZATION OF INDUSTRY (Sessions 10 to 13)

 Production
 The cost of production
 Competitive markets
 Documentary 1
Chapters 10, 11, 13, 14, 15, 16 & 17, Mankiw and Taylor (2011)
Theory, questions for review, problems and applications
Reading 3 (to be arranged)

REVIEW (Session 14)

Common tutorial to review the Introduction and Microeconomics parts of the course before the
mid-term exam

MIDTERM (Session 15)

The student has the possibility of eliminating the Microeconomics part for the final test if she
passes this exam

PART 5: MACROMAGNITUDES (Sessions 16 to 18)

 Main international economic blocks
 Some figures about the international macroeconomic relations
 Macromagnitudes I: production
 Macromagnitudes II: prices
Chapters 23 & 24, Mankiw and Taylor (2011)
Theory, questions for review, problems and applications

PART 6: LONG-RUN ECONOMICS: ECONOMIC GROWTH AND DEVELOPMENT (Sessions

19 to 21)
 Production and growth
 Development
 Saving & investment
 Documentary 1
Chapters 25 & 26, Mankiw and Taylor (2011)
Theory, questions for review, problems and applications
Reading 4 (to be arranged)

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PART 7: MID-TERM ECONOMICS: INFLATION AND UNEMPLOYMENT (Sessions 22 to 24)
 Trade-off between inflation and unemployment
Chapters 33, 34 & 36, Mankiw and Taylor (2011)
Theory, questions for review, problems and applications

PART 8: SHORT-RUN ECONOMIC FLUCTUATIONS (Sessions 25 to 26)

 Documentary 2
 Debate:
 SIMECO

Chapters 31, 32, 35 & 37, Mankiw and Taylor (2011)

Theory, questions for review, problems and applications
Readings 5 (to be arranged)

WORK PRESENTATIONS, REVIEW AND QUESTIONS & ANSWERS (Session 27-29)

FINAL EXAM (Session 30)

5. EVALUATION SYSTEM (ORDINARY AND EXTRAORDINARY)

Class attendance policy

Regular attendance is required in order to receive credit for class participation. According to the
University rules, students are required to attend at least 70% of all the sessions scheduled in
the course. Absences beyond this limit will automatically will result in a zero for the course. No
justifications will be necessary for the unattended sessions within the allowed limits.

Evaluation system
The evaluation for the class will be on a continuous basis and will depend on performance in the
quizzes, readings, in both mid-term and final exam, in the pair work and on participation in
class. The student will receive information on his/her grades for the different assignments.

Your final grade in the course will be weighted in the following way:

A. Active participation: 15%

- Attendance and Summaries: 5%
- Class participation: 10%

B. Exams: 50%
- Midterm: 25%
- Final: 25%

C. Practice: 20%
- Quizzes: 10%
- Readings: 10%

D. Team work: 15%

Remarks on Class Participation

Three main criteria will be used in reaching judgment about your class participation:

 Depth and Quality of Contribution: The most important dimension of participation

concerns what it is that you are saying. A high quality comment reveals depth of insight,
rigorous use of case evidence, consistency of argument, and realism.

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 Moving Your Peers’ Understanding Forward: Great ideas can be lost through poor
presentation. A high quality presentation of ideas must consider the relevance and timing of
comments, and the flow and content of the ensuing class discussion. It demands comments
that are concise and clear, and that are conveyed with a spirit of involvement in the
discussion at hand.
 Frequency: Frequency refers to the attainment of a threshold quantity of contributions that
is sufficient for making a reliable assessment of comment quality. The logic is simple: if
contributions are too few, one cannot reliably assess the quality of your remarks. However,
once threshold quantity has been achieved, simply increasing the number of times you talk
does not automatically improve your evaluation. Beyond the threshold, it is the quality of
your comments that must improve. In particular, one must be especially careful that in
claiming more than a fair share of “airtime”, quality is not sacrificed for quantity. Finally, your
attempts at participation should not be such that the instructor has to “go looking for you”.
You should be attempting to get into the debate on a regular basis.

Remarks on exams
The Mid-term Exam will consist of short questions and problems that will check your
understanding of Economics concepts throughout the first 13 sessions (Introduction and
Microeconomics) of the course.
The final exam will consist of short questions and problems that will check your understanding
of Economics concepts throughout the last 14 sessions (Macroeconomics) of the course.

Note: Students who DO NOT pass the mid-term exam will be evaluated of all the content of the
course (both Microeconomics and Macroeconomics) in the final exam. Those who PASS have
the possibility of get a higher score if they take both parts in the final exam (the grade will be the
maximum between the mid-term grade and the grade on the Microeconomics part of the final
exam)

Remarks on Team work

You are also expected to complete a work with your team and present it in written form. The
project will give you the opportunity to reflect on what you have learnt in class and apply it to
some practical problems.
In the first session the professor will indicate the characteristics that must perform the work:
content, bibliography, extension, examples, etc. A more complete guideline is given after the
mid-term exam (session 16). Particularly valued will be the rigor, clarity, the sources used and
the quality of work. Of course, invalidated the work they represent plagiarism. A 10 minutes
presentation is required. The presentations will be held in sessions 27- 29.

RETAKE POLICY
 Each student has 4 chances to pass any given course distributed in two consecutive
academic years (regular period and July period).
 Students who do not comply with the 70% attendance rule will lose their 1st and 2nd chance,
and go directly to the 3rd one (they will need to enrol again in this course next academic
year).
 Grading for retakes will be subject to the following rules:
 Students failing the course in the first regular period will have to do a retake in July
(except those not complying with the attendance rules, which are banned from this
possibility).
 Dates and location of the July retakes will be posted in advance and will not be
changed. Please take this into consideration when planning your summer.
 The July retakes will consist on one 20-questions multiple choice exam. The grade will
depend only on the performance in this exam; continuous evaluation over the semester
will not be taken into account. This exam will be designed bearing in mind that the
passing grade is 5 and the maximum grade that can be attained is 8.
 The non-July retakes (ordinary period; students in their third attempt) will consist on one
20-questions multiple choice mid-term exam (Introduction and Microeconomics) and
one 20-questions multiple choice final exam (Macroeconomics). The grade will depend

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 only on the performance in these two exams. These exams will be designed bearing in
mind that the passing grade is 5 and the maximum grade that can be attained is 8.
 The maximum grade that a student may obtain in the retake will be 8 out of 10.

6. USE OF ELECTRONIC DEVICES IN CLASS

This subject does not require the use of a laptop in class; nevertheless, if you want to bring your
laptop, please contact your professor.

7.- CODE OF CONDUCT IN CLASS

1. Be on time: Students arriving more than 5 minutes late will be marked as “Absent”.
Only students that notify in advance in writing that they will be late for a specific session might
be granted an exception (to the discretion of the professor).

2. If applicable, bring your name card and strictly follow the seating chart. It helps faculty
members and fellow students learn your names.

3. Don’t leave the room during the lecture: Students are not allowed to leave the room during
the lecture. If a student leaves the room during the lecture, he/she will not be allowed to re-enter
and, therefore, will be marked as “Absent”.
Only students that notify that they have a special reason to leave the session early will be
granted an exception (to the discretion of the professor).

4. Do not engage in side conversation. As a sign of respect toward the person presenting the
lecture (the teacher as well as a fellow student), side conversations are not allowed. If you have
a question, raise your hand and ask it. It you do not want to ask it during the lecture, feel free to
approach your teacher after class.
If a student is disrupting the flow of the lecture, he/she will be asked to leave the classroom and,
consequently, will be marked as “Absent”.

5. Use your laptop for course-related purposes only. The use of laptops during the lectures
should be authorized by the professor. The use of Facebook, Twitter, or accessing any type of
content not related to the lecture is penalized. The student will be asked to leave the room and,
consequently, will be marked as “Absent”.

6. No cellular phones: IE University implements a “Phone-free Classroom” policy and,

therefore, the use of phones, tablets, etc. is forbidden inside your classroom. Failing to abide by
this rule entails expulsion from the room and will be counted as one Absence.

7. Escalation policy: 1/3/5. Items 4, 5, and 6 above entail expulsion from the classroom and
the consequent marking of the student as “Absent.” IE University implements an “escalation
policy”: The first time a students is asked to leave the room for disciplinary reasons (as per
items 4, 5, and 6 above), the student will incur one absence, the second time it will count as
three absences, and from the third time onward, any expulsion from the classroom due to
disciplinary issue will entail 5 absences.

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8. BIBLIOGRAPHY

COMPULSORY

Title: Economics
Author: Mankiw, Gregory & Taylor, Mark
Publisher/Edition/Year: Cengage Learning / 2nd / 2011
ISBN: 9781844808700
Medium: Print

IE Library Permalink: http://ie.on.worldcat.org/courseReserves/course/id/10001850

RECOMMENDED

BLANCHARD, et al. (2010), Macroeconomics: A European Perspective. Financial Times

Prentice Hall. ISBN 0-27372-800-8.
SAMUELSON, P.; NORDHAUS, W. (2005), Economics. Edit. Mc Graw-Hill.
FRANK, R.; BERNANKE, B. (2007), Principles of Economics. McGraw-hill/Interamericana.
KRUGMAN, P.; WELLS, R; OLNEY, M. (2008), Fundamentos de Economía. Reverté.
MOCHÓN, F.: (2009), Economía, teoría y política. McGraw-Hill.
HARFORD, T. (2007), El economista camuflado. Ed. Temas de hoy.
BERGSTROM, T. & MILLER, J. (2009), Experimentos con los principios económicos. Antoni
Bosch
GIMENO, J. A.; GUIROLA, J. M. (1999), Introducción a la economía. Libro de prácticas:
Microeconomía. McGraw-Hill.
POMARES, I. y OTROS (1999), Entorno económico aplicado. Universidad de Huelva
publicaciones

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9. PROFESSOR´S BIO

LUIS RIVAS

Academia background:

PhD in Economics with honors, Universidad de Salamanca, PhD research prize, University
Cooperation Office
Degree in Economics, Universidad de Salamanca
Degree in Law, Universidad de Salamanca

Teaching and research experience:

Coordinator of internacional Relations, 2003 to present

1999-present: Lecturer in Economics: “Introduction to Economics”, UPSA, Spain; 2000-
01: Lecturer: “Regulation of Publicity in the European Union”, UPSA, Spain; 2000-present:
Lecturer in Economics: “The Construction of the European Union”, UPSA, Spain; 2003- present:
Lecturer in Economics: “Economic Journalism” UPSA, Spain; 2008: Doctoral Program, Lecturer in
Economics: “International Cooperation Policy”. Universidad Mayor de San Andrés, Bolivia; 2005-
present: Lecturer in Economics. M.A. in Corporative Communication: “Economic Competence in
the EU”, UPSA, Spain; 2005- present: Lecturer in Economics. M.A. in Corporative
Communication: “Economic Competence in the EU”, UPSA, Spain; 2006- present: Lecturer M.A.:
“Institutions of the EU”, UPSA, Spain; 2008/2009: Lecturer in Economics: “Accounting”, “Economic
and financial management”, IE, Salamanca, Spain; 2009/2010: Lecturer in Economics: “Economic
and financial management”, IE, Salamanca, Spain.

Researcher at University of Greenwich (London, UK) January-March 2012, University of

Memphis, (USA) September-October 2005, Université Catholique de Lille (France) June-July
2006, Universidade Católica Portuguesa (Lisbon, Portugal) June-July 2007, Universidade de
Aveiro (Portugal) June-July 2009, Universidad de Salamanca (España) 1997-1998 and at
Institute of Fiscal Studies, Ministry of Economy (Madrid, Spain): 2007-2008

He joined the IE University in 2009, where he teaches Introduction to Economics (BBA)

Curriculum vitae certified by the Regional Agency for Quality Assessment and Accreditation,
Castilla y León, Spain

10. OFFICE HOURS; CONTACT INFORMATION

Contact details: email larivas@faculty.ie.edu; phone number: +34 627553124

Office hours: to be arranged with the students via e-mail

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