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Applied Economics (Syllabus))

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					COURSE CODE             : SEEB2033
COURSE NAME             : APPLIED ECONOMICS
PREREQUISITES           : SEEB1013 PRINCIPLES OF ECONOMICS

1.0     SYNOPSIS

        Applied Economics is designed for students from non-economic undergraduate programs
        who want to increase their knowledge beyond the basic economic theory that they have
        learned in Principles of Economics. This course will discuss important topics in
        microeconomics and macroeconomics and focus will be given to the application of basic
        economic analysis to the central economic problems of the time.

2.0     OBJECTIVE

       Upon completion of the course, students are expected to

        2.1     understand how to think like an economists.
        2.2     understand the important theories, models and concepts in microeconomics and
                macroeconomics.
        2.3     recognize the most relevance method to understand economic issues.
        2.4     applied basic economic analysis to the central economic problems of the time.

3.0     LEARNING OUTCOME

        Upon completion of the course, students will be able to

        3.1     identify the important theories, models and concepts in every topic.
        3.2     explain the important theories, models and concepts in microeconomics and
                macroeconomics.
        3.3     relate the theories, models and concepts in understanding economic issues.
        3.4     analyze the theories, models and concepts used in understanding economic issues
                graphically.

4.0   REFERENCES

      Mankiw, N.G. (2012). Principles of Economics. 6th. Ed. International Student Edition.
         Singapore: Cengage Learning.

      Mankiw, N.G., et. al. (2011). Principles of Microeconomics. Malaysia Edition. Singapore:
         Cengage Learning.

      Siti Hadijah Che Mat & Azizah Md. Yusof (2007) Ekonomi gunaan. Pearson: Prentice
           Hall.

      M. Nasser Katib et. al (2007), Ekonomi, Edisi Kedua, Universiti Utara Malaysia: Thomson
         Learning.

      McConnell, C.R. et. al (2009), Economics: Principles, Problems, and Policies, 8th ed., New
        York: McGraw-Hill Irwin.


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       Bade,R & Parkin, M. (2011) Essential Foundations of Economics 5th ed. Boston: Pearson-
       Addison Wesley.

5.0    COURSE CONTENTS

      NO.                               TOPICS                                   HOURS
      1.0     Perfect Competition and the Analysis of Competitive Markets          3
              1.1 Perfect Competitive Markets
              1.1.1 Market characteristics
              1.1.2 Profit maximization by a competitive firm
              1.1.3 Long-run competitive equilibrium
              1.1.4 Coordination of short-run long-run
              1.1.5 The firm’s shut down decision

              1.2 The Analysis of Competitive Markets                                4
              1.2.1 Consumer and producer surplus
              1.2.2 Minimum price
              1.2.3 Price supports and production quotas
              1.2.4 Import quotas and tariff
              1.2.5 The impact of a Tax and subsidy

      2.0     Monopoly and Price Discrimination                                      6
              2.1 Monopoly
              2.1.1 Market characteristics
              2.1.2 Shift in demand curve

              2.2 Monopoly Power
              2.3 The Social Cost of Monopoly Power
              2.4 Capturing Consumer Surplus

              2.5 Price Discrimination
              2.5.1 First-degree price discrimination
              2.5.2 Second-degree price discrimination
              2.5.3 Third-degree price discrimination

      3.0     Monopolistic Competition and Oligopoly                                 6
              3.1 Monopolistic Competition
              3.1.1 Market features
              3.1.2 Short-run and long-run equilibrium
              3.1.3 Economic efficiency

              3.2 Oligopoly
              3.2.1 Market features
              3.2.2 Equilibrium in an Oligopolistic Market
              3.2.3 The Cournot Model

              3.3 Game Theory
              3.3.1 Cooperative and non-cooperative game
              3.3.2 Dominance strategy and Nash Equilibrium



                                               2
      3.3.3 Competition vs. collusion: The Prisoners’ Dilemma

      3.4 Cartel

4.0   Externalities                                                 3
      4.1 Negative Externalities and Market Inefficiency
      4.2 Positive Externalities and Market Inefficiency
      4.3 Ways to correcting market failure

5.0   Unemployment and Inflation                                    3
      5.1 Unemployment
      5.1.1 Recession, depression and unemployment
      5.1.2 Definition, categories of unemployment and how its
      measured
      5.1.3 The costs of unemployment

      5.2 Inflation
      5.2.1 Definition and types of inflation
      5.2.2 Measuring inflation rates
      5.2.3 The costs of inflation

6.0   Aggregate Demand (AD) and Aggregate Supply (AS)               4
      6.1 Understanding Aggregate Demand (AD)
      6.1.1 Aggregate demand curve
      6.1.2 Why the AD curve slopes downward
      6.1.3 Shift in the AD curve

      6.2 Understanding Aggregate Supply (AS)
      6.2.1 The short-run AS curve (SRAS)
      6.2.2 Shift in the SRAS curve

      6.3 The Long-run AS Curve (LRAS)
      6.4 Macroeconomic equilibrium in the short-run and long-run

7.0   Demand for Money, Money Supply and the Equilibrium            4
      Interest Rate
      7.1 Money Demand
      7.1.1 The definition and functions of money
      7.1.2 Money measurement
      7.1.3 The purpose of holding money
      7.1.4 Determinants of money demand
      7.1.5 The money demand curve

      7.2 Money Supply
      7.2.1 Money supply tools
      7.2.2 The money supply curve

      7.3 Money Market Equilibrium

8.0   Government Policies                                           3



                                        3
             8.1 Monetary Policy
             8.1.1 Monetary policy tools
             8.1.2 The relationship between money market and goods market
             8.1.3 Monetary policy in AD-AS model
             8.1.4 Expansionary (loose) and contractionary (tight) monetary
             policies

             8.2 Government and Fiscal Policy
             8.2.1 Fiscal policy tools
             8.2.2 Expansionary Fiscal policy
             8.2.3 The crowding out effect
             8.2.4 Contractioanry Fiscal policy

      9.0    International Trade and Exchange Rate                            6
             9.1 International Trade
             9.1.1 The theory of international trade
             9.1.2 Absolute advantage and comparative advantage

             9.2 Foreign Exchange Rates
             9.2.1 Demand and supply of foreign currencies
             9.2.2 Flexible exchange rates
             9.2.3 Fixed exchange rates
             9.2.4 Flexible exchange rates determination
             9.2.5 The advantages and disadvantages of fixed and flexible
             exchange rates

             TOTAL                                                            42


6.0     TEACHING METHODS
        Through Lectures and Discussion

7.0     COURSE ASSESSMENT
        Exercises, Quizzes and Mid-Semester Examination 50%
        Final Examination                               50%

8.0     CONSULTATION HOURS (Room#: 2.97 Economics Building)
        Monday and Thursday : 3:30pm-5:00pm
        Tuesday             : 11:00am-12:00noon




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Description: Applied Economics is designed for students from non-economic undergraduate programs who want to increase their knowledge beyond the basic economic theory that they have learned in Principles of Economics. This course will discuss important topics in microeconomics and macroeconomics and focus will be given to the application of basic economic analysis to the central economic problems of the time.