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Theory of Economics

Course developers

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 – 1h)
3. Elasticities of demand and supply. (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 features. (Lecture – 1h, practical – 1h)
7. Market of the factors of production (resources). (Lecture – 1h, practical – 1h)
Test 1 – Analysis of market demand, supply and production costs. (Practical – 1h)
8. Basic macroeconomic indicators. Price indices. (Lecture – 1h, practical – 1h)
9. Aggregate demand and supply. The cyclical nature of economic growth (Lecture – 1h, practical – 1h)
10. Employment and unemployment. (Lecture – 1h, practical – 1h)
11. Inflation. (Lecture – 1h, practical – 1h)
12. Money and the banking system. (Lecture – 1h, practical – 1h)
13. Fiscal and monetary policies (Lecture – 1h)
14. Government budget and tax policies. (Lecture – 1h, practical – 1h)
15. International economic relations. (Lecture – 1h, practical – 1h)
16. Test 2 – Calculation and analysis of main macroeconomic indicators. (Lecture – 1h)
Homework presentation (Practicals – 2h).

Requirements for awarding credit points

The student must take two tests and complete homework in order to earn a passing mark.

Description of the organization and tasks of students’ independent work

Homework. The student must obtain, compile, present, and analyse statistical data on a current macroeconomic problem or industry. The homework must be completed and presented for defence in PowerPoint or Canva.

Criteria for Evaluating Learning Outcomes

The student who has scored at least 60 is granted a passing mark. The final assessment consists of the tests taken and homework completed during the semester. If the score is less than 60, a failed test must be retaken to earn a passing mark.

Compulsory reading

1. Bikse V. Makroekonomika: teorija un politika. 2.izd. LiepU, 2020.363 lpp.;

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

Further reading

1.Mankiw, N.G., Macroeconomics. 10th edn., New York, Macmillan International Higher education, 2019, 612 p.
2.Šenfelde M. Makroekonomika. 5. izd. Rīga: RTU, 2014. 245 lpp.
3. Rakesh V Vohra. Prices and Quantities: fundamentals of microeconomics. Cambridge: Cambridge University Press, 2020. 207 p.
4. Williamson D. Stephen. Macroeconomics. 6th edition, published by Pearson Education 2018. 731 p.

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

A general study course for the LPTF professional second-level programme Food Product Technology. A compulsory course for the professional programme Agriculture for full- and part-time students. An elective course for the academic bachelor's programme Food Quality and Innovations.