Course detail

Basic Elements of Economics

FP-ZEAcad. year: 2024/2025

The course covers microeconomic relationships and contexts, concepts, and essential theoretical foundations necessary for the microeconomic analysis of problems, facilitating the formation of a comprehensive understanding that leads to the rational behavior of microeconomic entities in a market environment. The course content is particularly focused on the behavior of consumers and firms in both perfect and imperfect competition. Additionally, the course addresses the issues of production factors and production functions. The content also includes the area of government interventions from a microeconomic perspective.

In the second part, the course discusses the fundamental economic relationships and contexts, concepts, and essential theoretical foundations necessary for analyzing current issues in the contemporary economy. Students will acquire a comprehensive understanding about the rational behavior of entities in the market environment concerning issues related to consumption, investment, inflation, and unemployment, as well as the measurement of economic output and its long-term growth, the business cycle, and fiscal and monetary policy. The course aims to provide an understanding of the behavior of the economy as a whole.



Language of instruction

Czech

Number of ECTS credits

7

Mode of study

Not applicable.

Guarantor

prof. Ing. et Ing. Stanislav Škapa, Ph.D.

Department

Institute of Economics (ÚE)

Entry knowledge

General economic and mathematical knowledge from high school is assumed.

Rules for evaluation and completion of the course

A student will receive credit if they earn at least 20 out of a possible 40 points awarded in the exercises. Points can be obtained from two midterm written assignments: the microeconomics midterm in the 8th week of the semester and the macroeconomics midterm in the 13th week of the semester. The maximum number of points from these written assignments is 40, distributed in a 60:40 ratio. Therefore, the maximum score for the microeconomics assignment is 24 points, with a minimum of 12 points required for successful completion, and the maximum score for the macroeconomics assignment is 16 points, with a minimum of 8 points required for successful completion. Students are entitled to a retake for both the first and second midterm written assignments. The retake for both assignments will be at the beginning of the examination period. Detailed information about the time and place for the retakes will be provided in the e-learning system, in course updates, or communicated by the instructor. Attendance in the exercises is not monitored.

The examination consists solely of theoretical questions (except for some questions with numerical tasks, though not as complex as those covered in the exercises). All questions in the exams are either multiple-choice with only one correct answer or true/false questions. For multiple-choice questions, students can earn 2 points for a correct answer, while no answer or an incorrect answer will be scored 0 points. For true/false questions, students can earn 1 point for a correct answer, with no answer or an incorrect answer scored 0 points. The questions in the exam are distributed in a 60:40 ratio between microeconomics and macroeconomics. Students must score at least 30 points in the exam.

Grading scale (students can earn up to 40 points from exercises and up to 60 points from the exam, for a total of 100 points):

A: 90 – 100 points

B: 80 – 89 points

C: 70 – 79 points

D: 60 – 69 points

E: 50 – 59 points

F: less than 50 points

A student has the right to withdraw from the exam no later than 24 hours before its start. A student who withdraws from the exam is considered not to have registered for the exam. If a student withdraws after the exam has started, fails to appear for the exam without a valid excuse, or if the excuse is not accepted, they will be graded "F". If a student does not withdraw from the exam in time, they can still excuse themselves for serious reasons, particularly health-related, up to 5 working days after the scheduled exam date or after the obstacle preventing the excuse has been removed.

Completion of the Course for Students with Individual Study Plans

If a student has an approved individual study plan, they are required to submit written assignments specified by the instructor and take repeat midterm written assignments in both microeconomics and macroeconomics to receive credit. Ten examples will be selected from microeconomics and ten from macroeconomics for the student to work on. These assignments must be submitted at least 2 days before the scheduled date for the midterm written assignment. The exam is written and follows the same rules as the standard course completion requirements.



Aims

The purpose of the course is to acquire and organize foundational knowledge in economic theory. By familiarizing themselves with the basic concepts of microeconomics and macroeconomics, students will understand the logic of market processes and the functioning of market mechanisms in everyday life. The main objective is to analyze real-world phenomena in the market environment and apply acquired knowledge in proposing solutions.

The student will be able to explain the basic concepts of economic theory and the principles of human economic behavior, as well as understand the fundamental mechanism of the national economy and its equilibrium, including the connections between the national economy and the global economy and their impact on the local interests of firms and institutions.




Study aids

Not applicable.

Prerequisites and corequisites

Not applicable.

Basic literature

ŠKAPA, S. Mikroekonomie 1. VUT v Brně, FP 2016. 140 s. ISBN 978-80-214-5391-3. (CS)
KUČEROVÁ, V. Makroekonomie 1. Brno: CERM, 2013. 126 s. ISBN: 978-80-214-4798- 1. (CS)

Recommended reading

HOLMAN, R. Ekonomie. 5. vyd. C.H.Beck, 2011. 696 s. ISBN 978-8074000065. (CS)
MANKIW, G. N. Principles of Economics. 7th ed. Cengage Learning, 2014. 880 p. ISBN 128516587X. (EN)
SAMUELSON, P.A. a NORDHAUS, W. D. Economics. 19th ed. McGraw-Hill Education, 2009. 744 p. ISBN 978-0073511290. (EN)

Elearning

eLearning: currently opened course

Classification of course in study plans

  • Programme BAK-MIn Bachelor's 1 year of study, winter semester, compulsory
  • Programme BAK-PM Bachelor's 1 year of study, winter semester, compulsory

Type of course unit

 

Lecture

39 hod., optionally

Teacher / Lecturer

prof. Ing. et Ing. Stanislav Škapa, Ph.D.
prof. Ing. Marek Zinecker, Ph.D.

Syllabus

Basic Thematic Content of the Course Lectures:

  1. Introduction to the Course and Fundamental Concepts: The emergence of economics and its subject matter. Basic economic principles and their measurement. Errors in economic thinking and reasoning. Prices as a mechanism for coordinating human activities.
  2. Rational Behavior of Individuals: Goods and production factors. Households and firms. Alternative economic systems. The economic cycle of production factors and goods, household incomes, and firm revenues.
  3. Consumer Behavior and Demand Formation: Utility theory. Consumer equilibrium. Market demand. The law of diminishing demand. Demand elasticity.
  4. Firm Behavior in a Perfectly Competitive Market: Accounting costs and economic costs. Accounting profit and economic profit. Cost classification. Profit as the difference between revenues and costs. Firm equilibrium. The supply curve and shutdown point. Supply elasticity.
  5. Market Equilibrium and Efficiency: Market equilibrium and equilibrium price. Achieving market equilibrium. Stability of market equilibrium. Balancing marginal utility and marginal costs. Externalities.
  6. Firm Behavior under Imperfect Competition: The emergence of imperfect competition, basic characteristics of market structures: monopoly, oligopoly. Monopolistic competition. Monopsony.
  7. Market for Production Factors: Capital market, labor market, and land market (demand in the credit capital market, supply of financial capital, equilibrium in the financial capital market, labor supply, labor demand, equilibrium in the labor market). Unemployment, its forms, and causes. Measuring unemployment. State employment policy.
  8. Microeconomic Policy and State Interventions in Prices: Forms of state intervention to protect the market. Price ceilings. The impact of excise tax on price and quantity of goods. Subsidies to price (price floor).
  9. Aggregate Variables: Aggregate supply and aggregate demand. Growth and decline of AD and AS, aggregate expenditures, slope of the AS curve, slope of the AD curve. The AS-AD model.
  10. Measuring Economic Performance: Product and income indicators. Nominal, real, and potential GDP. Alternative indicators of living standards.
  11. Money Theory: Equilibrium in the money market, money multiplier. Inflation and its causes, types of inflation. Phillips curve theory.
  12. Macroeconomic Goals and State Economic Policy: Fiscal policy – public finance, state budget, built-in stabilizers, discretionary measures, expansionary and restrictive fiscal policy.
  13. Monetary Policy: Tools and goals of monetary policy, expansionary and restrictive monetary policy.

Exercise

26 hod., optionally

Teacher / Lecturer

Ing. Markéta Kruntorádová, Ph.D.
Ing. Štěpán Franc

Syllabus

Basic Thematic Content of Course Exercises:

  1. Introduction to the Organization of Exercises and Credit Requirements: Introduction to economics.
  2. Rational Behavior of Individuals: Goods and production factors. Households and firms. The economic cycle of production factors and goods, household incomes, and firm revenues. The market, types of markets, market participants, and the market mechanism.
  3. Consumer Behavior and Demand Formation: Demand elasticity.
  4. Firm Behavior in Perfect Competition: Firm equilibrium; the supply curve, break-even point, and shutdown point. Derivation of supply. Supply elasticity.
  5. Market Equilibrium: Balancing marginal utility and marginal cost; consumer and producer surplus from exchange. Externalities.
  6. Imperfectly Competitive Markets: Monopoly, oligopoly, monopolistic competition.
  7. Markets for Production Factors.
  8. Midterm Test on Microeconomics: State market interventions in prices. Price ceilings. Price floors. Excise tax.
  9. AS-AD Model: Formation of curves, effects of price and non-price factors.
  10. Measuring Economic Performance: GDP, methods of calculating GDP, the business cycle. Unemployment.
  11. Money Market: Inflation.
  12. Fiscal Policy.
  13. Test on Macroeconomics: Monetary policy.

Elearning

eLearning: currently opened course