Principles of economics

Teacher(s)

Van den Broeck Goedele;

Language

English

Prerequisites

LBIR1110  Math I
LMAT1111E  Math II

The prerequisite(s) for this Teaching Unit (Unité d’enseignement – UE) for the programmes/courses that offer this Teaching Unit are specified at the end of this sheet.

Main themes

After a short introduction to the economic science, this course examines:
·       economics of production and its specifics to agricultural production (supply irreversibility, technical progress, risk and uncertainties, size and scope dimension),
·       economics of consumption and its specifics to food consumption (low price and income elasticities, product differentiation, imperfect competition),
·       price formation and the functioning of good and service markets (instability, cycles, marketing margins, rationing) and factor markets (labour, capital, land, rent),
·       the contrasting situations of perfect and imperfect competition (monopoly, oligopoly, monopsony, oligopsony),
·       the spatial and interregional relations of exchanges.
Through these topics, this course uses and explains the fundamental concepts of economics. It uses the deductive approach of economics, and graphical and mathematical methods. The dual approach is introduced and used because of its importance in the empirical literature and its interest for illustrating the reasoning that characterizes economics. Additional sessions apply the theoretical tools through many exercises.

Aims

At the end of this learning unit, the student is able to :
1	With respect to the learning outcomes of the bioengineering bachelor programme, this course contributes to the following learning outcomes: 1.2 and 1.3: theoretical lectures 1.5: exercises sessions 2.1: theoretical lectures 3.2: theoretical lectures and exercises sessions 7.3 and 7.4: theoretical lectures Being a general introduction to the economic science, this course aims a double objective:  ·       to explain students concepts and basic mechanisms of the economic science that help understand and anticipate socio-economic phenomena that are observed in the current economic context, in particular in the agricultural and food sector, using the mathematical formalism of this social science, ·       to provide students the main tools of economic analysis that will be needed in economics and management courses of their study programme but also useful for an autonomous way of thinking. At the end of this course, students are able to: ·       master the fundamental concepts of economic theory of the producer, consumer and market equilibrium in perfect competition and imperfect competition as well, ·       apply these concepts and interpret phenomena of supply, demand and exchanges, in particular those that can be observed in the agricultural and food sector ·       solve simple economic problems through exercises.

The contribution of this Teaching Unit to the development and command of the skills and learning outcomes of the programme(s) can be accessed at the end of this sheet, in the section entitled “Programmes/courses offering this Teaching Unit”.

Content

1. Welfare
   1. Economic growth, inequality and poverty
2. The producer
   1. Production
   2. The cost of production
   3. Profit maximization and competitive supply
   4. Time, risk and innovation
3. The consumer
   1. Consumer behavior
   2. Individual and market demand
4. The market
   1. Supply and demand
   2. Government interventions
   3. Trade-off between efficiency and equity
   4. Market structure, power and pricing
   5. Externalities and public goods
5. Globalisation
          a. International trade

Teaching methods

Theoretical lectures illustrated with slide shows and sessions on exercises

Evaluation methods

The evaluation of the course includes a first written exam on the theoretical lectures and a second exam on the exercises.

Online resources

Moodle

Bibliography

• Diaporama disponible sur Moodle
• Ouvrage de référence recommandé : Robert Pindyck et Daniel Rubinfeld, Microéconomie, 8ème édition, Pearson Education France, Paris, 2013. (version originale anglaise disponible)

Faculty or entity

AGRO