Title: Introduction to Economics

Credit Hours: 02
Course Code: GSS-101

Course Introduction:
The course illustrates the way in which economists view the world. It will equip students with
the basic tools of Micro- and macroeconomics, and a learning to apply these tools. The course
focuses on the behavior of households, firms, and government. Furthermore, it will enhance the
understanding of the concepts of trade and specialization; the operation of markets; industrial
structure, the determinants of aggregate output and price level, and the basic working of foreign
exchange markets.
Learning Outcomes:
In the course the students should be able to:
1. Understand how markets and the price Mechanism function.
2. Describe the behavior of Economics agents (consumers, firms, governments…)
3. Understand economic welfare and producer and consumer surplus.
4. Recognize the major macro-economic Indicators for economic activity.
5. Appraise the role of Macroeconomic policies on firms and households.

Course Contents:
Introduction to What is economics and why is it important? Definition of
Economics & Key Microeconomics and Macroeconomics; How economists use
Principles of theories and models to understand economic issues; Organization
Economics of economies: An overview of economic systems; Choice in a
world of scarcity; How Individuals make choices based on their
budget constraint; The production possibilities frontier and social
choices; Confronting objections to the economic approach.

Demand, Supply, Demand, Supply and equilibrium in markets for goods and
and Market services; Shifts in demand and supply for goods and services;
Equilibrium Changes in equilibrium price and quantity - The four-step process;
Price ceilings and price floors; Demand, supply, and efficiency,

Elasticity of Demand Elasticity; Price elasticity of demand and price elasticity of supply;
Cases of elasticity and constant elasticity; Elasticity and pricing;
Income elasticity of demand; Cross-price elasticity of demand.

Production, Costs Explicit and implicit costs; Accounting and economic profit;
and Industry Production in the short Run; Costs in the short run; Production in
structure the long run; Costs in the long run.

Market Structures Perfect competition; How perfectly competitive firms make output
Decisions; Entry and exit decisions in the long run; Efficiency in
perfectly competitive Markets.
 Monopolies; Barriers to entry; How a profit-maximizing monopoly
chooses output and price; Monopolistic competition and oligopoly;
Monopolistic competition; Oligopoly; market failure and
externalities
Macroeconomics & Measuring the size of the economy: Gross Domestic Product,
Macroeconomic Nominal vs. real values; Comparing GDP among countries; How
Indicators well GDP measures the well-being of society; Economic Growth;
Labor productivity and economic growth; labor force participation
rates; Components of economic growth; Economic convergence.
Unemployment and Unemployment rate; How economists define and compute
Inflation unemployment rate; Patterns of unemployment; What causes
changes in unemployment over the short run; What causes changes
in unemployment over the long run.
Tracking Inflation; How to measure changes in the cost of living;
Indexing and its limitations; Inflation unemployment trade off;
Types and causes of unemployment
Components of Consumption, Investment, Government Expenditure, Exports,
Aggregate Demand Imports
Money, Banking & Money: definition, forms and functions; Central bank and its
Financial system functions with reference to the State Bank of Pakistan; Basics of
commercial banking;
Public Finance & Sources of public revenue, various forms of taxes: Direct and
Taxation Indirect; Income and commodity taxes; Sales and excise taxes;
Non-tax revenues; Major heads of public expenditure
Debt vs. deficit; Concept of budget deficits and sources of debt
financing; Fiscal policy: meaning and objectives.
International Trade Concept of imports and exports, Currency exchange rates, Balance
of payments: causes of deficits in BOP of Pakistan and remedial
measures, The problem of external debt.

Teaching Methodology:
 To deliver lectures on topics included in course outline
 To require each student to solve independent assignments on topics included in the course.
 To work on an independent research project.
Recommended Books:
Mankiw, G-Principles of Economics- Latest Edition- south- West Publishers.
McConnell, Campbell & Stanley Brue, and Sean Flynn, Macroeconomics, Latest Edition.
(McGraw-Hill Economics)
Samulson and Nordhaus – Economics –Latest Edition – McGraw Hill- Inc.
Parkin, Michael – Macroeconomics, Latest Edition – Prentice Hall.