Principles of Economics

This course provides an introduction to current economic issues and to basic economic principles and methods. The economist John Maynard Keynes wrote that, "the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood." Economics is not primarily a set of answers, but rather a method of reasoning. By the end of the semester, students are able to use the analysis practiced in the course to form their own judgments about many of the major economic problems faced by the United States and other countries. In the first part of the semester, we focus on microeconomics, which is the study of the interaction of people and firms in markets. Since we live in a market economy, this study helps students to understand how American society organizes its economic affairs. We examine how the forces of supply and demand operate in the markets for goods and services. Students learn powerful tools that enable them to understand a great deal about the economy and how it works. Using these tools, we develop a framework to evaluate social policies. Trade—always a controversial subject—is analyzed, along with measures, such as tariffs, designed to restrict trade. Theories concerning firm behavior are then examined—how companies decide how much to produce, and the profits which result. During the second half of the semester, we focus on macroeconomics, the study of the economy as a whole. We study economic growth and development, business cycles, and the impact of both monetary and fiscal policy on inflation, unemployment, interest rates, investment, the exchange rate, and international trade. Students may not take both ECON E-10a and ECON E-1000 for degree or certificate credit.