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Theory of Economics

Course developer

Course abstract

The course builds up an understanding of consumption theory, market laws and producer motivation as well as knowledge of various types of competition, efficient exploitation of resources at the micro- and macro-levels and the consequences of disequilibrium in the national economy.

Learning outcomes and their assessment

Students will be able to demonstrate:
KNOWLEDGE of
the laws of market functioning, the basic principles of cost formation, efficient resource exploitation and economic growth. Practical assignments, tests 1 and 2.
SKILLS to
perform a practical analysis of a micro and macroeconomic situation and independently draw reasoned conclusions, simulate changes in market equilibrium by critically assessing the economic situation and perform production cost calculations and an analysis of an enterprise’s performance at various levels of competition based on the theoretical knowledge acquired. Practical assignments, discussions, tests 1 and 2, homework.
COMPETENCES to

independently define and analyse a particular economic problem as well as describe the market situation based on economic laws, substantiate decisions and, if necessary, perform an additional analysis, as well as independently obtain, select and systematize the information needed for drawing reasoned conclusions and developing reasoned proposals based on the theoretical knowledge acquired. Practical assignments, tests 1 and 2.

Course Content(Calendar)

Course Content (Calendar)Full- time studies:
1. Basic problem for economic analysis. (Lecture - 1h)
2. Demand and supply. (Lecture - 1h, practical - 1h)
3. Elasticity of supply and demand. (Lecture - 1h, practical - 1h)
4. Consumer behaviour in the market. (Lecture - 1h, practical - 1h)
5. Production, production costs. (Lecture - 1h, practicals - 2h)
6. Types of market competition, their specifics. (Lecture - 1h)
7. Market for the factors of production (resources). (Lecture - 1h, practical - 1h)
Test 1 - Analysis of a market, demand, supply and production costs. (1h)
8. Basic macroeconomic indicators. Price indices (Lecture - 1h, practical - 1h)
9. Aggregate demand and supply. Disequilibrium in the economy. (Lecture - 1h, practical - 1h).
10. Cyclical nature of economic growth (Lecture - 1h)
11. Employment and unemployment. (Lecture - 1h, practical - 1 h)
12. Inflation. (Lecture - 1h, practical - 1h)
13. Money and the banking system. (Lecture - 1h, practical - 1h)
14. Fiscal and monetary policies. (Lecture - 1h)
15. Government budget and tax policy. (Lecture - 1h, practical - 1h)
16. International economic relations. (Lecture - 1h)
Test 2 - Calculations and analysis of main macroeconomic indicators. (1h)

17. PowerPoint presentation of independent work - (practicals - 2h)
Part - time studies:
All topics specified for full - time studies are implemented, but the number of contact hours is 1/2 of the specified number of hours.

Requirements for awarding credit points

During the semester, the student must pass two tests, submit and defend homework on innovative products developed in Latvia as well as present and defend a PowerPoint presentation of a current macroeconomic problem or an important industry. The course ends with a formal test.

Description of the organization and tasks of students’ independent work

Homework 1. To describe the roles of value added and exports in the economy, it is necessary to give three examples of innovative products developed in Latvia, as well as sales markets for and prices on the products. Homework 1 must be submitted within the specified time for it and defended orally during a practical.

Homework 2. The student must obtain, compile, represent and analyse statistical data on a current macroeconomic problem or an important industry. Homework 2 must be submitted in PowerPoint and defended within the time specified.

Criteria for Evaluating Learning Outcomes

Students who have scored at least 70% have an opportunity to automatically earn a cumulative mark. The cumulative assessment consists of the tests taken (2x30%) and homework (40%) done during the semester. Both tests must be passed and both pieces of homework must be submitted and defended.

Compulsory reading

1. Bikse V. Makroekonomika: teorija un politika, LiepU, 2015.269 lpp.;

2. Nešpors V. Mikroekonomikas teorijas pamati. Rīga: RTU, 2015, 244 lpp.

Further reading

1. Šenfelde M. Makroekonomika. 5. izd. Rīga: RTU, 2014. 245 lpp.;
2. Rakesh V. Vohra. Prices and Quantities: fundamentals of microeconomics. Cambridge: Cambridge University Press, 2020. 207 p.;

3. Williamson D. Stephen. Macroeconomics, 6th edition, published by Pearson Education 2018. 731p.

Periodicals and other sources

1. Makroekonomika www.makroekonomika.lv
2. Centrālā statistikas pārvalde www.csb.gov.lv
3. EUROSTAT www.eurostat.com
4. DOING BUSINESS Measuring Business Regulations www.doingbusiness.org

5. LIAA www.liaa.gov.lv

Notes

General study course for the professional bachelor programm full - time studies and part-time studies.