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Theory of Economics

Course developer

Course abstract

The course aims to provide knowledge of the basic scientific and practical principles of a market economy as well as relationships at the micro and the macro levels, thereby contributing to the possibilities of its practical application.

Students are provided with knowledge of basic theoretical principles and economical relationships both at micro and macro level and of an understanding of how to practically use them. The course familiarises students with macroeconomic relationships and trends in the economy of Latvia.

Learning outcomes and their assessment

Students will be able to demonstrate:
Knowledge of the main relationships and basic principles of the market at microeconomic and macroeconomic level – lectures, practicals, Tests 1 and 2.
Skills to practically analyse basic micro- and macroeconomic problems, model changes in market equilibrium, analyse motivations for market behaviours of consumers and producers, forecast the performance of a market mechanism depending on the extent of competition in the market based on the theoretical knowledge acquired – practicals, Tests 1 and 2.

Competences to independently obtain, select and systemise necessary information, independently analyse and tackle problems, make justified decisions, hear out and discuss practical solutions and make proposals, depending on the economic situation, based on the theoretical knowledge acquired and the economic relationships learnt –homework.

Course Content(Calendar)

1. Concepts of economics. (Lecture – 1h)
2. Demand and supply. (Lecture – 1h, practical works – 1h)
3. Elasticities of demand and supply. (Lecture – 1h, practical works – 1h)
4. Consumer behaviour in the market. (Lecture – 1h, practical works – 1h)
5. Production, production costs. (Lecture – 1h, practical works – 2h)
6. Forms of market competition, their features. (Lecture – 1h, practical works – 1h)
7. Market of the factors of production (resources). (Lecture – 1h, practical works – 1h) Test 1 – Analysis of market demand, supply and production costs. (Practical works – 1h)
8. Basic macroeconomic indicators. Price indices. (Lecture – 1h, practical works – 1h)
9. Aggregate demand and supply. (Lecture – 1h, practical works – 1h)
10. Cyclical nature of economic growth. (Lecture – 1h)
11. Employment and unemployment. (Lecture – 1h, practical works – 1h)
12. Inflation. (Lecture – 1h, practical works – 1h)
13. Money and the banking system. (Lecture – 1h, practical works – 1h)
14. Fiscal and monetary policies (Lecture – 1h)
15. Government budget and tax policies. (Lecture – 1h, practical works – 1h)

16. International economic relations. (Lecture – 1h, practical works – 1h) Test 2 – Calculation and analysis of main macroeconomic indicators. (Practical work – 1h)

Requirements for awarding credit points

During the semester, the student must pass two tests and do homework. The course ends with an examination.

Description of the organization and tasks of students’ independent work

Homework 1. Consumer motivation in the market. The student has to give three examples of how firms try to get consumers to buy more than they need to. The homework is presented orally during practicals within the time specified.

Homework 2. The student has to obtain, compile, display and analyse statistics on a current macroeconomic problem or an industry. The homework must be completed and presented for defence (in PowerPoint).

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 and homework completed during the semester. The cumulative assessment cannot include the tests retaken.
All students who have not earned a cumulative mark must take a written examination. All the tests and homework must have a passing mark.

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

Notes

General study course for the Faculty of Food Technology’s second-level professional programme Food Product Technology; a compulsory course for the professional programme Agriculture, full-time and part-time students.
Restricted elective course in academic bachelor's study programm "Food qaality and innovations".