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Source: http://www.doksinet GENERAL ECONOMICS I MICROECONOMICS TOPIC 1 BASIC ECONOMIC CONCEPTS Three fundamental questions which the general economics is called upon to answer: what shall be produced? how to produce? produce for whom? The peoples needs and the problem of their classification (the fundamentals of the marginal utility theory). Production activity as the main way of meeting the needs Production factors, productive forces, the means of production, the instruments and the objects of labor. Production technologies, the production function Production costs and the problem of their measurement. Production efficiency as the attainment of the set goal with the minimal costs. The problem of limited resources and the production-possibility curve; the law of diminishing returns of the factors of production, the concept of a "trade-off" and "opportunity costs". Division of labor and its main forms (in singular and social). Technological progress The process of

reproduction as a unity of production, exchange, distribution and consumption. Economic (production) relations and the subjects thereof Interest as a motive force of the economy. The concept of an economic system. Property and its role in forming an economic system Fundamental features of the centrally planned economy and market economy. Mixed economy. Microeconomics as a section of general economics, dedicated to the analysis of specific commodity markets functioning. The normative and positive aspects in the science of economics. TOPIC 2 ECONOMI ANALYSIS TOOLS The concept of an economic model (theory) as the chief tool for disclosing the main economic relationships. The role of abstraction (simplifying assumptions) in forming economic models. Incremental sophistication of models as a manifestation of the universal method of scientific study that consists in the advancement from the abstract to the concrete. A model as a scientific hypothesis before the comparison of conclusions

flowing therefrom with the facts of real life. Economic models and their verification against concrete data. Characteristics of the main types of data used in economics: time-series data, grouping of data. The method of index for data representation. Nominal and real variables in the economic analysis The tradition of using a graphic interpretation of economic models in microeconomics and macroeconomics. The method of comparative statics, its advantages and limitations TOPIC 3 A GENERAL DESCRPTION OF SUPPLY, DEMAND AND EQUILIBRIUM IN THE COOMODITY MARKETS Demand and supply as factors of the price function. Supply and demand curves Factors that determine the position of the demand curve (prices of "tie-in sales", consumer incomes, consumer tastes). Factors that determine the position of the supply Source: http://www.doksinet curve (production technology, prices of goods used in production, government regulation). A graphic representation of market balance Free markets and

price control TOPIC 4 DEMAND. THE INFLUENCE OF PRICES AND INCOME ON THE DEMAND PROFILE Price sensitivity of demand. Easiness of substitution as the main factor affecting the price demand elasticity. The employment of the price demand elasticity indicator for determining the amount of products supplied to the market that maximizes the consumers general expenditures on their purchasing. The concept of cross-elasticity of demand Income demand elasticity and the classification of goods into normal goods (including the necessary goods and luxury goods) and goods of inferior quality. Inflation affecting demand. TOPIC 5 CONSUMER CHOICE THEORY Main elements of the consumer choice theory (consumer income, prices of goods, consumer tastes, as well as the assumption of maximum efficiency consumer behavior). Budget restraint and the budget curve. Consumer tastes and the concept of the substitution of one good for another. The basis behind the diminishing marginal rate of substitution assumption

and the indifference curve map. The mechanism of utility maximization by the consumer The changes in the consumer choice due to changes (a) of income, (b). of the prices of goods. The concept of the substitution effect and the effects of a changing real income in the situation of relative prices changes. The Griffen good Diminishing character of the individual demand curve for most goods. The market curve of demand for goods as a result of a parallel addition of its individual curves. TOPIC 6 PRODUCTION. ORGANIZATIONAL FORMS AND BASIC CATEGORIES Organizational forms of enterprises: firms founded on the basis of individual private property; partnerships; limited liability companies (corporations) (open and closed joint stock companies). The specificity of the Russian legislation on the issue of the enterprises organizational forms. The goal of the firm in the contemporary market economy. Incomes and costs as the chief parameters that determine the firms decision-making on the output of

goods. Main financial documents - profit and loss account and the balance - and their significance. The concept of the cash flow and the stock. The difference of economic costs from the cash expenditures flow (interpretation of credit debts, depreciation, stock changes). The difference between economic costs and bookkeeping costs and the concept of opportunity costs The selection of a production technology and the costs curve. The concept of the factor intensity of production. The prices influence upon the choice of a technology and the costs curve. TOPIC 7 PRODUCTION. COSTS, INCOME AND OUTPUT Total, average and marginal costs. The concept of the total and marginal income the curve shape of the total and marginal income. Marginal costs equalization Source: http://www.doksinet with the marginal income as a general principle of the output scale optimization. The need for a separate consideration of the problem of costs in short- and long-terms (partial and full adaptation of

production factors to the changing market conditions). Thrift and losses caused by the production scale in the long-term prospect and the Ushape of the long-term average costs curve. The presence of the fixed and variable factors of production and, respectively, of the fixed and variable short-term costs. The connection of the U-shape of the short-term average costs curve with the diminishing efficiency of the variable factor of production. The problems of profit maximization and loss minimization and the there associated specificity of decision-making on the short-term and long-term optimal output. TOPIC 8 MARKET STRUCTURE. PERFECT COMPETITION AND PURE MONOPOLY The concept of a market structure. The general definition of the perfect competition and a pure monopoly market (monopsony). Conditions for the existence a of perfect competition market (a large number of producers, each having a negligible share in the total output of the industry; the output of standard items by all firms

within the industry; availability of full information to consumers about the quality of products manufactured by different firms; a free "entrance" into the market and a free "exit" therefrom). Short-term and long-term marginal costs and the short-term and long-term supply curves of the firm and the industry. Marginal income equal to the price and the modification of conditions for an optimal output. The concept of a "marginal firm" and the conditions for the existence of a horizontal long-term supply curve for the industry. The effects for the output of the industry of the (a) changes in the overall level of costs and (b) demand for the products. The absence of real and tentative domestic and foreign competitors as a condition for a pure monopoly. Profit maximization algorithm by a pure monopoly The reasons for the absence of the supply curve in a pure monopoly. The concept of the measure of monopoly power and of monopoly super-profit. Comparison of a

competitive industry with a monopolized one and composed of many enterprises. The social price of a monopoly composed of many enterprises. Natural monopolies and the problems of their activity regulation. Discrimination monopoly in the conditions of a likelihood for market segmentation. The monopoly and technological progress TOPIC 9 MARKET STRUCTURE. OLIGOPOLY AND MONOPOLY COMPETITION The concept of a non-perfectly competitive firm. Two types of non-perfect competition: oligopoly and a sector of monopoly competition. The conditions for the existence of a monopoly competition sector (a lot of small firms, free "entry" and "exit", diminishing demand curve for the products of each firm. The causes that generate the non-horizontal character of the demand curve for the output of these firms. The mechanism of a "tangency equilibrium" under the conditions Source: http://www.doksinet of monopoly competition. Particular features of the firms monopoly power

manifestation under these conditions. oligopoly: a conflict between the desire for a collusion and competition. A kinked demand curve in an oligopoly. The Cournot equilibrium The significance of the games theory for describing the behavior of oligopolies. Natural and engineered barriers to the competitors "entrance" into the sector. A classical view of the factors that lay the groundwork for market structures. The role of a marginal scale of output and of the concentration of production connected therewith. Corrections entered by the new industrial economics: the role of the firms behavior and of potential competition for the formation of the market structure. TOPIC 10 THE PRICE FORMATION FOR THE SERVICES OF THE PRODUCTION FACTORS AND THE INCOME FROM THEIR USE Interdependency of production factors and the random character of demand for them. Marginal (physical) and marginal value product of the production factor (labor, capital, land). The condition for an optimization of the

number of production factors involved in the production (equating a marginal value product of each production factor to the price of services provided by it, or, which is the same thing, equating the quotient of each production factors marginal physical product by the price of services provided by it with the value inverse to the end products produced by these factors). The curve of the marginal value product of the production factor as a firms demand curve for this product. The curves of production factors supply by individual households and firms. The general supply and demand curves of the production factors. The equilibrium prices of production factors and the revenue allocation. TOPIC 11 LABOR MARKET AND WAGES The definition of wages under the conditions of free competition in the labor market. The factors that lay the groundwork for the demand on labor (the quality of workforce, capital accumulated, the quality of technologies applied, the art of management). Factors which

determine the supply of labor (the dynamism of the size of population, particular features of the populations desire to increase its labor contribution). Equilibrium in the labor market and the main reasons for the difference in the labor remuneration (difference which compensates harsh working conditions; difference in the quality of work; the rent elements in the wages and salaries of unique specialists; existence of groups within the workforce that are not competing with each other). Trade unions and their effect on the labor market. Specificity of labor relations regulation in the Russian Federation. TOPIC 12 THE MARKETS OF LAND AND THE MONEY MARKETS. THE RENT, THE INTEREST AND THE PROFIT The rent as an income from the fixed factors of production. The rents derivativeness for the natural factor of production from the price generated with the help of this productdriven factor. The role of the rent and of other factor-driven incomes in maintaining efficiency when using limited

resources. Capital and the "roundabout" modes of production. The rental fee for using capital goods and the return on capital. Savings, financial assets and their Source: http://www.doksinet discounted value. The mechanism for defining the return on capital and the level of the rate of interest. The short-term and long-term equilibrium in the money market, the concept of a natural rate of interest. The influence produced on the money market by the uncertainty and the risk and by technological changes. The nature of profit. TOPIC 13 UNCERTAINTY AND RISK IN THE ECONOMY The concepts of uncertainty and risk. Risk aversion and its connection with the conception of diminishing utility. Insurance as a way of risk distribution The money market as an instrument for risk distribution. Non-insurable risks as a manifestation of a "market failure". The problem of moral hazards and the adverse selection. The opportunities of social security insurance Speculative markets as

instruments of the transfer of goods and services in time and space flowing from surplus to deficit (arbitration between space- distant markets, speculative activities aimed to draw profit from a possible change of prices in time). Speculation and risk distribution; the hedging of risks. The role of speculation in maximizing the utility Negative aspects of speculative behavior. TOPIC 14 INTRODUCTION INTO THE WELFARE ECONOMICS Justice and efficiency. Perfect competition and the Pareto efficiency Market structures imperfection as well as the absence of individual markets - the side-effects markets (for example, the pollution of the environment), the markets for most "future goods", the markets of all types of risks (i.e the existence of non-insurable risks) - as the major causes for the existent market failures). Incomplete information at the disposal of economic agents, the existence of public goods and the market failures. TOPIC 15 THE GENERAL EQUILIBRIUM THEORY AND THE

WELFARE ECONOMICS Production functions of separate goods and services and societys production possibilities frontier. Substantiation (for a two commodity market model) of the general equilibrium in the point of the production possibilities frontier where the marginal rate of transformation of one commodity into another equals the inverse value of their price ratio. The Pareto efficiency of the general equilibrium point, The model of a general equilibrium with due account for the time factor. The definition of the equilibrium level of savings, investments and the rate of interest. TOPIC 16 MARKET SETBAKS (FAILURES) AND THE ECONOMIC FUNCTIONS OF THE STATE Intervention by the government as a response to the market failures. The nature of the present-day mixed economy. The fundamentals of an anti-monopoly and and industrial policy. Nationalization ans privatization. Source: http://www.doksinet The state and the distribution of income: is intervention necessary? The social functions of

the contemporary state. Budget as the states major instrument. Introduction into the tax theory The nature of the market structures distortions due to the activity by the state and the "second best" policy. II MACROECONOMICS TOPIC 1 TURNOVER OF GOODS AND PAYMENTS. THE NATIONAL INCOME ACCOUNTS The subject-matter of macroeconomics. Three ways of measuring the economic activity: by production scales, the size of income and expenditure. The gross and intermediate output; value added by procession Aggregate demand and its elements (consumer and investment expenditures, government spendings on goods and services, net export). Injections into the goods and payments turnover and the outflows therefrom. Indirect and direct taxes, government subsidies and transfers, savings. Main indicators of economic activity (gross domestic and gross national product, the net product and the national income), their advantages and disadvantages. The system of national accounts. TOPIC 2 THE KEYNESIAN

MODEL OF OUTPUT AND INCOME DETERMINATION The purpose of the model and its basic prerequisites. Potential and actual output The consumption and savings function; the concept of the marginal propensity to consume and the marginal propensity to save. Autonomous and non-autonomous expenditures; plotting the curve of the aggregate demand function. Determination of the equilibrium value of output and income by means of the "Keynesian cross". Equilibrium income multiplier The paradox of thrift TOPIC 3 THE INFLUENCE OF THE FISCAL POLICY AND FOERIGN TRADE ON THE AGGREGATE DEMAND General concepts: the fiscal policy, stabilization policy, state budget deficit (surplus), government debt. The specificity of influence of public procurement and net taxes on the equilibrium output and income. The balanced budget multiplier A soft and a contractionary fiscal policy. The influence of the national budget deficit and the government debt on the economy. Source: http://www.doksinet Specificity

of exports and imports influence on the aggregate demand. Equilibrium income multiplier in the open economy. TOPIC 4 MONEY AND THE CONTEMPORARY BANKING BUSINESS Money and its functions. Main types of payment instruments Monetary reserves and bank reserve requirements. Money supply and "monetary aggregates". The functions of commercial banks and their role in forming the monetary stock (supply). The mechanism of non-cash transactions Particular features of the monetary system in the epoch of paper money. The monetary base and money multiplier. Factors which determine the size of the money multiplier TOPIC 5 THE ACTIVITY OF THE CENTRAL BANK AND THE MONETARY SYSTEM The instruments for the Central Bank to influence the money supply: the establishment of minimum reserve requirements, discounting rates, performance of "open market transactions". The Central Bank as the "borrower of last resort". The role of the Central Bank in managing the government debt and

financing the deficit of the state budget. What is "money printing"? The concept of the demand for money and the motives laying the basis for the latter. The mechanism for establishing equilibrium in the financial market. The interest rate as the "price of money". TOPIC 6 THE MONETARY AND FISCAL POLICY IN A CLOSED ECONOMY The influence of money and the interest rate on the size of consumer demand for investment-available funds. The essence of the transmission mechanism The fiscal policy and the "crowding-out effect". The IS/LM model and its application for making clear the efficiency of the fiscal and monetary policy. Demand management; varieties of the fiscal and monetary policies and the combinations thereof. TOPIC 7 AGGREGATE SUPPLY, PRICE LEVEL AND THE SPEED OF ADJUSTMENT Dependency between the general level of prices and the size of the aggregate demand; the curve of a macroeconomic demand. Dependency of the aggregate supply on the state of the factor

markets, and, first and foremost, of the labor market. the vertical shape of the aggregate supply curve in the event of the prevalence of the perfect competition laws in the labor market. Nosensical attempts to influence the amount of output and income in these conditions by means of stimulating the aggregate demand. Source: http://www.doksinet factors that account for the "stickness" of wages and salaries in the short term. The influence of this circumstance on the shape of the short-term aggregate supply curve. Economys adaptation to the shocks caused by the demand and by the supply. TOPIC 8 UNEMPLOYMENT The characteristics of the main types of unemployment - frictional, structural, classic, unemployment generated by the low demand. Voluntary and involuntary unemployment The natural level of unemployment. The characteristics of the supply-side policy and its role in bringing down the natural level of unemployment. The essence of the "hysteresis" phenomenon and

its forms. Hysteresis as a factor that can generate and preserve high unemployment for a long period. TOPIC 9 INFLATION Money supply and inflation. The quantity theory of money and its limitation Interrelationship between inflation and the nominal rate of interest The nature of hyperinflation The deficit of the state budget and inflation Inter-relationship of inflation, on the one hand, and unemployment, on the other. The Phillips curve and is contemporary interpretation. The absence of a "trade-off" between inflation and unemployment in the situation of a shock from the side of supply. The social costs connected with a high inflation ("the shoe leather costs" and "the menu costs", problems connected with the institutional non-adjustment of the economy to inflation, the costs of the unanticipated inflation and the costs due to the uncertainty of prices dynamism). Methods of combating inflation (the restrictive monetary and fiscal policy, the incomes

policy, institutional reforms). Adjustment to inflation TOPIC 10 THE FOREIGN EXCHANGE MARKET AND THE BALANCE OF PAYMENTS Factors that determine the demand for foreign currency and its supply. The fixed and the floating exchange rate - two extreme varieties of the exchange rate regime. The mechanism for maintaining balance in the foreign exchange market under the fixed and the floating exchange rates. Devaluation and revaluation of currency The nominal and the real rate of exchange and the problem competitiveness of export and import items. The balance of payments; its current figures and items of capital. The concepts of the balanced and unbalanced balance of payments; the financing of a deficit of the balance of payments. Factors that affect the state of the current and capital items of the balance of payments. Source: http://www.doksinet TOPIC 11 MACROECONOMICS OF THE OPEN ECONOMY Relationship between the state of the economy and the balance of payments. Internal and external

balance in the economy. Economys adjustment to the internal and external shocks under a fixed rate of exchange regime. The reasons for inefficiency in stimulating the demand by means of a monetary policy under a fixed rate of exchange. Increased short-term efficiency of the fiscal policy under a fixed rate of exchange. Shortterm, medium-term and long-term effects of the national currencys devaluation Adjustment of the economy to the internal and the external shocks under a floating rate of exchange regime. The reasons for inefficiency in stimulating the demand by means of a monetary policy under a floating rate of exchange. Increased short-term efficiency of the monetary policy under a fixed rate of exchange. TOPIC 12 THE LONG-TERM GROWTH AND THE SHORT-RUN FLUCTUATIONS The problem of measuring economic growth: advantages and disadvantages of various indicators. The production function and the long-term economic growth. Malthuss theory The neoclassical model of a steady-state economy

The role of technological changes The conception of zero growth. The concept of business activity cycles. The fundamentals of cyclicality (the model of an accelerator-multiplier, the concept of a political business cycle, the theory of a balanced business cycle). The economic growth and the policy of the government. Arrangements that affect the aggregate demand and the aggregate supply. TOPIC 13 THE GENERAL CHARACTERISTICS OF THE CONTEMPORARY SCHOOLS OF ECONOMICS Four major problems whose interpretation is the division line between the major trends of the present-day economic thought: the speed at which the markets achieve a balanced state; the character of expectations of the the economic transactors; uniqueness or multiplicity of the long-term balance state; the relation to the long-term and the shortterm perspective. The general characteristics of the new classical macroeconomic theory, monetarism, the "eclectic" and the "extremist" Keynesianism. TOPIC 14

INTERNATIONAL TRADE AND THE TRADE POLICY Internationalization of production and the factors that lie behind it. The theory of comparative advantage and the Heckscher-Ohlin theory The Leontief paradox. The factors that condition the development of the international intrabranch exchange. The problem of the gainers and loosers in the process of an international division of labor. Source: http://www.doksinet The essence of the trade policy. The costs and benefits connected with the application of customs tariffs. The quotas, non-tariff barriers, export subsidies TOPIC 15 THE INTERNATIOAL MONETARY SYSTEM AND INTERNATIONAL FINANCES Characteristics of the gold standard. The reasons for the emergence of the Bretton Woods currency system after the Second World War and its particular features. The factors that conditioned the crisis of the Bretton Woods system and then its abandonment. The mechanisms of foreign exchange and financial crises in the contemporary conditions and the ways to

counteract them. The role of international coordination in the economic policy The EU experience. RECOMMENDED READING LIST: 1. Агапова ТА, Серёгина СФ Макроэкономика 10-е изд М: МАРКЕТ ДС, 2013г 2. N Gregory Mankiw : Macroeconomics 9th Edition: Macmillan learning, 2016 3. N Gregory Mankiw : Principles of Microeconomics, 8th Edition : Cengage, 2016 4. Frederic S Mishkin: The Economics of Money, Banking and Financial Markets ,11th Edition: The Pearson, 2015 5. Лаврушин О Банковское дело Учебник 11-е изд М:КноРус, 2014 6. http://gmathultedu/ 7. https://wwwetsorg/gre/