SCHEME OF WORK FIRST SEMESTER 2016/2017 (A161)

Lecturers Name: NARIMAN MOHD SAAD

ECONOMICS
WEE
K/
DATE
1

TOPIC
SUB-TOPIC
1.0 PERFECT
COMPETITION AND
THE ANALYSIS OF
COMPETITIVE
MARKETS
1.1Perfect Competitive
Markets
1.1.1 Market
Characteristics
1.1.2 Profit maximization
by a
competitive firm
1.1.3 The firms shut
down
decision
1.1.4 Coordination of
shortrun and long-run
1.1.5 Long-run
competitive
equilibrium

LEARNING OUTCOME
At the end of this chapter,
student will be able to:
Define perfect competition.
Explain how firms in perfectly
competitive market makes its
output decision using Total
Revenue-Total Cost Approach
and Marginal Revenue-Marginal
Cost Analysis.
Discuss the situation where
firms have to shut down
operations in the short run.
Explain the short-run
equilibrium in the perfectly
competitive market.
Explain the long-run equilibrium
of the perfect competition.
Describe the adjustment
process that occurs in long-run.
Explain why firms enter and
leave a market.
Explain why perfect competition
is efficient.

Course: BEEB2033 APPLIED

HOU
R

METHO
D

Lecture
and
discussi
on

TEACHIN
G
TOOLS

Po
wer
Point
Slides

Ha
ndouts

Not
es

REMARKS
Refer:
Parkin
(2016), p.p
310-321
Distribute
the
syllabus
Form
group for
assignmen
t
Distribute
assignmen
t group
task

1.2 The Analysis of

Competitive Markets
1.2.1 Consumer and
producer
surplus
1.2.2 Minimum price and
maximum price
1.2.3 Price supports and
production quotas
1.2.4 Import quotas and
tarif
1.2.5 The impact of a tax
and
subsidy

2.0 MONOPOLY AND

PRICE
DISCRIMINATION
2.1Monopoly
2.1.1 Market
characteristics
2.1.2 Profit maximization
by a
monopoly firm

Identify areas of consumer,

producer surplus and social
costs through diagrams.
Explain how maximum and
minimum price lead to market
inefficiencies with the aid of
diagrams.
Explain how price support and
production quotas cause
market inefficiencies with the
aid of diagrams.
Explain how import quotas and
tarifs cause market
inefficiencies with the aid of
diagrams.
Explain how taxes and
subsidies cause market
inefficiencies with the aid of
diagrams.

Explain how monopoly arises

and distinguish between singleprice monopoly and pricediscriminating monopoly.
Explain the shift of monopoly
demand curved.
Explain the sources of monopoly
power.
Explain how a single-price
monopoly determines its output

Lecture
and
discussi
on

Lecture
and
discussi
on

Po

wer
Point
Slides

Ha
ndouts

Not
es

Po

wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Parkin
(2016), p.p
146-153,
165-179,
181-199
Pyndicks
(2013), p.p
324-325

Refer:
Parkin
(2016), p.p
336-343
Pyndicks
(2013), 366369

2.2Sources of Monopoly
Power
2.3The Social Cost of
Monopoly single-price
monopoly and
competition compared:
2.3.1 Price and output
comparison
2.3.2 Efficiency
comparison
2.3.3 Rent seeking
4

2.4Price Discrimination
2.4.1 Price discrimination
among group of
buyers and among
units of goods
2.4.2 Welfare with and
without price
discrimination:
single-price
monopoly and
perfect price
discrimination
compared
2.5Monopoly Regulation
2.5.1 Marginal Cost
Pricing
Rule
2.5.2 Average Cost
Pricing
Rule
2.5.3 Government
subsidy
2.5.4 Rate of Return

and price.
Compare the performance and
efficiency of single-price
monopoly and perfect
competition with the aid of
diagrams.

Define price discrimination.

Explain how consumer surplus
changes when a monopoly price
discriminates.
Explain how consumer surplus,
economic profit and output
changes when a monopoly
perfectly prices discriminates.
Explain how monopoly
regulation influences output,
price, economic profit, and
efficiency.

Lecture,
discussi
on

Po

wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Parkin
(2016), p.p
344-353

Regulation
2.5.5 Price Cap
Regulation
5

Lecture,
discussi
on

3.1
Monopolistic
Competition
3.1.1 Market features
3.1.2 Short-run and longrun
equilibrium
3.1.3 Economic efficiency
3.2 Oligopoly
3.2.1 Market features
3.2.2 Equilibrium in an
oligopolistic market

Define
and
identify
monopolistic competition.
Explain
how
a
firm
in
monopolistic
competition
determines its price and output
in the short run and the long
run.
Describe
the
economic
inefficiencies in this market
with diagrams.
Explain why advertising costs
are high and why firms in a
monopolistic competition use
brand names.
Define and identify oligopoly.
Describe the duopoly models in
the determination of output and
prices in the market.

Po
wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Parkin
(2016), p.p
361-371,
379-381

3.3 Game Theory

3.3.1 Cooperative and
noncooperative game
3.3.2 Dominance
strategy and
Nash Equilibrium
3.3.3 Competition vs.
Collusion: The
Prisoners Dilemma

Explain the concept of Nash

equilibrium.
Explain the diference between
cooperative
and
noncooperative games.
Forming a matrix reward.

Determine the dominant

strategy and Nash equilibrium
from matrix reward.

Lecture,
discussi
on

Refer:
Parkin
(2016), p.p
382-388

3.0
MONOPOLISTIC
COMPETITION AND
OLIGOPOLY

Po
wer
Point
Slides

Ha
ndouts

Not
es

3.4 Cartel

Use game theory to explain

how price and output are
determined in oligopoly
Use game theory to explain
other strategic decisions.

4.0

Define negative and positive

externalities
with
suitable
examples.
Explain the social optimal
output and social costs due to
externalities.
Describe methods to improve
the existing market failure.

EXTERNALITIES

4.1
Externalities and
Market Inefficiency
4.1.1
Negative
externalities and
market inefficiency
4.1.2
Positive
externalities and
market inefficiency
4.2
Private Solutions to
Externalities
4.3
Public Policies toward
Externalities

5.0
UNEMPLOYMENT
AND INFLATION
5.1 Unemployment
5.1.1 Recession,
depression
and unemployment
5.1.2 Definition, types of
unemployment and
how
its measured
5.1.2.1 Definition and

Lecture,
discussi
on

Po
wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Parkin
(2016), p.p
429-438,
444-447
Mankiw
(2013)
p.p 191-200
Distribute
individual
assignment:
Problem set
1

Explain why unemployment is

a problem and how we
measure the unemployment
rate and other labour market
indicators.
Explain why unemployment
occurs and why it is present
even at full employment.
Explain the types of
unemployment.
Explain the impact of

3
Lecture,
discussion
Presentation
group 1 & 2

Po

wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Parkin
(2016), p.p
553-567,747-

https://www.
statistics.go
v.my/
MID SEM
EXAM 24

how its
measured
5.1.2.2 Current
population
survey
5.1.2.3 Labor market
indicators
5.1.2.4 Types of

unemployment on the
economy and social.
Explain why inflation is a
problem and how we measure
the inflation rate.
Explain the types and efects
of inflation.

unemployment
5.1.3 The costs of
unemployment
5.1.3.1 Economic
costs
of
unemployment
5.1.3.2 Social costs of
unemployment
5.2 Inflation
5.2.1 Definition and types
of
inflation
5.2.2 Measuring inflation
rates
5.2.3 The costs of inflation
MID SEMESTER BREAK

OCT 2016
(MONDAY)
8.30 PM

6.0
AGGREGATE
DEMAND (AD) AND
AGGREGATE SUPPLY
(AS)
6.1 Aggregate Demand
6.1.1 The aggregate
demand
curve
6.1.2 Why negative
sloping of
AD curve
6.1.3 Shift of AD curve
6.2 Aggregate Supply
6.2.1 Short Run
Aggregate
Supply (SRAS)
6.2.2 Shift of SRAS
6.3 Long Run Aggregate
Supply
6.4 Macroeconomics
Equilibrium
in the Short Run and
Long Run

Explain what determines

aggregate demand and supply
in the long run and in the short
run
Explain how real GDP and the
price level are determined and
what causes growth, inflation,
and cycles.

Define money and describe its

functions.
Describe the measurement of
money.

Lecture,
discussi
on
Present
ation
group 3
&4

Po
wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Parkin
(2016), p.p
687-701

10

7.0
MONEY DEMAND,
MONEY SUPPLY AND
EQUILIBRIUM
INTEREST RATE
7.1 Money Demand
7.1.1 Money definition
and the
functions of
money
7.1.2 Measurement of
money
7.1.3 The purpose of
holding
money
7.1.4 Factors
determining the
demand of money
7.1.5 Money demand
curve
7.2 Money Supply
7.2.1 Money supply
instruments
7.2.2 Money supply
curve
7.3 Money Market
Equilibrium

Explain the purpose of the

demand for money by Keynes
Explain the factors that
determine money demand.
Draw money demand curve
Describe money supply tools.
Draw money supply curve.
Explain money market
equilibrium with the aid of
diagram.

Lecture,
discussi
on
Present
ation
group 5
&6

Po
wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Parkin
(2016), p.p
628-630,
642--645
Mankiw
(2013) p.p
601-605

11

8.0
GOVERNMENT
POLICIES
8.1 Monetary Policy
8.1.1 Monetary policy
instruments
8.1.2 The relationship
between
money market
and goods
market
8.1.3 Monetary policy in
the
AD-AS Model
8.1.4 Expansion and
contraction
monetary
policy

12

8.2 Government and Fiscal

Policy
8.2.1 Government
budget
8.2.2 Fiscal policy
instruments
8.2.3 Expansion fiscal
policy
8.2.4 Crowding out
efect
8.2.5 Contraction fiscal
policy

Explain the monetary policy

instrument.
Explain the efects of expansion
monetary policy on the money
market and goods market.
Draw curves that describe the
relationship between money
market and goods market.
Describe the impact of the
implementation of monetary
policy in AD and AS model
(changes in AD and AS curves).
Distinguish expansion
monetary policy and
contraction.
Explain the impact of expansion
and contraction monetary
policy on money market and
goods market.
Explain the government's
budget.
Describe the tools of fiscal
policy.
Explain how expansion fiscal
policy implemented using ADAS model.
Explain the crowding out efect
using AD-AS model.
Explain how contraction fiscal
policy implemented using ADAS model.

Lecture,
discussi
on
Present
ation
group 7
&8

Po

wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Arnold
(2013)
p.p 306-308
Mankiw
(2013)
p.p 612-615
http://www.b
nm.gov.my/

Lecture,
discussi
on
Present
ation
group 9
& 10

Po
wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Arnold
(2013)
p.p 222-231
http://www.tr
easury.gov.m
y/ and
http://www.b
nm.gov.my/
Distribute
individual

assignment:
Problem set
2

13

9.0
INTERNATIONAL
TRADE, BALANCE OF
PAYMENT AND
EXCHANGE RATE
9.1 International Trade
9.1.1 The theory of
international trade
9.1.2 Absolute advantage
and
comparative
advantage

14

9.2 Foreign Exchange Rates

9.2.1 Demand and supply
of
foreign currencies
9.2.2 Flexible exchange
rates
9.2.3 Fixed exchange
rates
9.2.4 Flexible exchange
rates
determination
9.2.5 The advantages
and
disadvantages of
fixed

Explain at least two reasons

why international trade
executed.
Define absolute and
comparative advantage.
Determine the specialization of
a country based on absolute
and comparative advantage.

Describe the issue of demand

and supply of foreign currency.
Determine equilibrium point of
foreign exchange rates.
Explain how flexible exchange
rates are determined in the
economy.
Explain how a fixed exchange
rate is determined in the
economy.
Explain at least two factors that
influence the equilibrium
foreign exchange rates.
Explain balance of payment

Lectures
,
discussi
on
Present
ation
group
11 & 12

Lecture,
discussi
on

Po
wer
Point
Slides

Ha
ndouts

Not
es

Refer:
Arnold
(2013), p.p
658-661

Refer:

Po
wer
Point
Slides

Ha
ndouts

Not
es

Arnold
(2013) p.p
675-695
https://www.s
tatistics.gov.
my/

and flexible
exchange
rates
9.3 Balance of payment
9.3.1 Balance of
payment
account
9.3.2 Deficit in balance
of
payment

account.
Explain factors influence deficit
in balance of payment and how
to overcome the situation.

FINAL EXAMINATION

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________________________________
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