EXC 3500 Economics 2
EXC 3500 Economics 2
Economics II provides you with concepts and models to understand both global and national challenges and opportunities that industries and society as a whole face. The course covers topics such as trade, markets, and price formation, various types of market failure, and instruments to correct them. Additionally, it explores how strategic behavior can be modeled within a simple game theoretical framework. You will also learn how the Norwegian economy is influenced by international conditions, as well as the background for economic policies implemented by the Government and Norges Bank. In this context, models explaining phenomena like economic fluctuations, unemployment, and inflation are discussed, along with how economic policy can be used to influence economic development.
Upon completion of the course, students should have knowledge of:
- The difference between absolute and comparative advantage and why free trade between individuals and nations is profitable.
- Strategic behavior and simple game theoretical models.
- The difference between efficiency and distribution.
- Consumer surplus, producer surplus, and economic surplus.
- Various market models such as perfect competition and monopoly.
- Different types of market failures, such as lack of competition, externalities, and public goods.
- How various instruments can be used to correct market failures.
- International trade and trade policy.
- Macroeconomic indicators containing information about the current economic situation.
- Key objectives and instruments in economic policy and the background for the economic policies pursued by the Government and Norges Bank.
- The effect of economic policy in a small open economy with a flexible exchange rate.
- Individual preferences for the distribution of consumption over time.
- Problems with inflation.
- The relationship between inflation and unemployment.
- The effect of demand and supply shocks on inflation.
After completing the course, students should be able to:
- Explain the conditions for profitable trade and discuss the effects of different trade policy measures.
- Understand and analyze various types of games, such as the prisoner's dilemma. Show how the equilibrium in a game can be altered.
- Analyze how different markets work and demonstrate how various instruments can alter the equilibrium.
- Discuss different types of market failures and how these can be corrected.
- Determine which economic theory is most relevant to discuss an issue in a specific situation.
- Collect updated economic data and indicators and use them, for example, to assess a country's current economic situation.
- Discuss fundamental economic relationships and have developed a critical sense to distinguish between correct and incorrect statements about economic policy and use of policy instruments.
- Conduct discussions on possible effects of changes in economic policy and policy instruments using both mathematical and graphical reasoning.
Students should be ethically aware of the fundamental conflicts between interest and goals associated with economic policy. They should be aware of the importance of sustainable resource use. They should be able to assess an economic issue from different perspectives with respect to the economic interests of different groups. Students should further develop a critical sense for possible deviations between declared political goals and ambitions and the actual effects of economic policy. Students should develop the ability to independently extract information and produce and communicate simple economic analyses and assessments.
- Trade. Absolute and comparative advantage.
- Game theory. Strategic behavior. Simultaneous moves. Sequential moves (dynamic games).
- Consumer surplus, producer surplus, societal economic surplus. Pareto optimality. Distribution and equality.
- Price regulations. Taxes and subsidies.
- Market failure: Monopoly and price discrimination.
- Market failure: Externalities. Correction of externalities. Coase's theorem.
- Market failure: Public goods.
- International trade and trade policy. Partial market theory and trade. Import regulations: Tariffs and quotas.
- Labor market.
- Money and credit.
- Business cycles, inflation, and fiscal policy.
- Inflation and the Phillips curve.
- Business cycle theory: Monetary policy. The multiplier model for an open economy and the AS-AD model.
The course consists of 36 hours of lectures. In addition, digital learning resources such as videos, multiple-choice tests, and problem sets will be developed.
Higher Education Entrance Qualification.
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
SØK 3420 Economics I and MET 2910 Mathematics, or similar.
| Assessments |
|---|
Exam category: School Exam Form of assessment: Written School Exam - pen and paper Exam/hand-in semester: First Semester Weight: 100 Grouping: Individual Support materials:
Duration: 5 Hour(s) Comment: • Ordinary school exam Exam code: EXC 35001 Grading scale: ECTS Resit: Examination every semester |
| Activity | Duration | Comment |
|---|---|---|
Teaching | 36 Hour(s) | |
Prepare for teaching | 108 Hour(s) | |
Individual problem solving | 51 Hour(s) | |
Examination | 5 Hour(s) |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.