Economics

Code:

EM0008

Acronym:

E

Keywords
Classification	Keyword
OFICIAL	Management

Instance: 2010/2011 - 1S

Active?	Yes
Responsible unit:	Department of Industrial Engineering and Management
Course/CS Responsible:	Master in Mechanical Engineering

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
MIEM	181	Syllabus since 2006/2007	1	-	4	42	107

Teaching language

Portuguese

Objectives

Background
An understanding of economics is essential for understanding the economic events that affect us all. The programme is designed as an introduction to the world of economics and is thus appropriate for those who will not study the subject beyond introductory level. The programme aims are to provide graduates with a knowledge on the economic theory, mainly the nature of economic reasoning, how does economic system work, embodying the achievement of economic aims through economic policies; how the agents ( individuals, corporations, government) act to solve scarcity, making choices in order to an efficient allocation of resource.

Specif aims:
The students should be able to perform on the following activities:
To collect, select and interpret economic and financial data in order to use it on complex and varied professional situations. To apply the economic principles : scarcity; cost-benefice analysis; increasing opportunity costs; the principle of comparative advantage and economic efficiency .To formulate possible scenarios concerning economic data in such a way to anticipate the behaviour of consumers, firms and economic and financial authorities and regulators. To equate the decision variables concerning the attainment of firm ´s goals. To equate the decision variables concerning the attainment of consumer´s goals.

Previous knowledge

No specific knowledge is necessary but mathematical techniques, let ´s say basic algebra, the students have previously studied.

Percentual distribution

Economic principles:20%; macroeconomics issues: 40% of disposable time
Microeconomics: 40% of disposable time
Learning outcomes:

By the end of the course the students should be able to perform on the following areas:

To apply economic reasoning.
To apply economic principles.
To explain and comment the economic situation of a real economy as a whole.
To predict the behaviour of consumers, firms and economic and financial authorities and regulators when facing real life situations .

Program

INTRODUCTION
Economics: what do economists study? the subject of economics;economic principles; human wants and the problem of scarcity;macroeconomics / microeconomics and the production possibility curve;choice and opportunity cost; rational
MACROECONOMICS
Circular flow ; the two related circular flows : a circular flow of income and expenditure and a related circular flow of products and services .
Fundamental concepts: national income, gross national product and expenditure;economic aggregate:income, consumption, savings, capital investment, taxation, government expenditure, exports and imports; basic equation. Injections and withdrawals.
Methods of calculating national income:problems involved in its estimation; domestic economy, imports, exports and balance of payments.
The determination of national income :equilibrium national income and full employment level; full employment national income.
Supply and demand; determinants of demand and determinants of supply
The traditional Keynesian approach: the management of aggregate demand; unemployment; the relationship between aggregate demand and national income.
Consumption, marginal propensity to consume, saving and investment; the relationship between saving, investment and growth; the relationship between demand, production and income.
Equilibrium in goods market : IS curve; supply and demand of goods and services; the equilibrium : demand, supply, interest rate and equilibrium national income ; graphic analyses; planned saving, actual saving, planned investment and actual investment; price and stock adjustement.
The investment multiplier; governmemt basic aims and economic policies: the use of the multiplier and the government expenditure to end recession; the effects of imports and exports; marginal propensity to import.MICROECONOMICS
Theory of the firm : traditional profit-maximizing theory
The production function: using inputs to produce output ; short-run and long-run changes in production : fixed factor and variable factor; short run and long run.
Production in short run : the law of diminishing returns.The short run production function. Concepts: total product, average and marginal product.The relation between averages and marginals.
The long run theory of production
The production function with substitute factors. The optimun combination of factors: the marginal product approach. The isoquant approach : characteristics of isoquant; the isoquant map; the marginal rate of factor substitution; the law of diminishing marginal rate of factor substitution.
The scale of production: constant returns to scale, increasing returns to scale and decreasing returns to scale. The concept of economies of scale. Economies and diseconomies of scale. Isoqamts and returns to scale.
The theory of costs
Costs in the short run. Measuring costs of production: opportunity costs, historic costs, explicit costs, implicit costs and replacement costs.Costs and inputs: fixed costs and variable costs.Total costs, average fixed cost, average variable cost, average total cost and marginal cost. The relationship between average and marginal cost.
The isocost: definition. The optimum point to the firm: isoquants and isocosts. The least-cost combination of factors to produce a given level of output. The highest output for a given cost of production.
. Derivation of long-run cost from an isoquant map.
. Consumer theories: rational consumer behaviour
Marginal utility theory : utility, total utility and marginal utility. The principle of diminishing marginal utility. Total and marginal utility curves.The optimum level of consumption : the optimum combination of goods consumed; the equi-marginal principle; marginal utility and the demand curve for a good. Major weakness of the marginal utility theorie.
. The indifference analysis

Mandatory literature

frank robert; princípios de economia, mc graw hill

Teaching methods and learning activities

Three different ways were used in presenting the issues. First using basic algebra. Second using graphics and third using only words .This approach aims to match teaching styles with the different students learning styles. The concepts are taught on a theoretical approach. Some subjects are exposed in a very close way to real economic life, in such a way that ideas, theories and models are constantly evaluated against the facts, and often modified and rejected. The issues, technical terms and techniques of economic analysis are exposed in order to reinforce the student´s understanding of concepts, and how they are useful to understand the reality. Doing so, basic facts of real life, both micro and macroeconomics issues, are analysed using economic techniques. And this is done in order to manage the consequences of potential learning and teaching style mismatches. By other side students are encouraged to work as a team when they face practical applications. The principles of active learning are already assumed as practical tools on teaching.

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Description	Type	Time (hours)	Weight (%)	End date
Attendance (estimated)	Participação presencial	39,00
	Exame	4,50		2011-02-08
	Exame	64,50
	Total:	-	0,00

Eligibility for exams

According to the rules of FEUP.

Calculation formula of final grade

Average of the two partial exams .

Examinations or Special Assignments

Not applicable

Special assessment (TE, DA, ...)

Final exam.100% classification

Classification improvement

By the end of the two partial exams, the students with a classification under 10 marks are invited to do a final exam. Other situation:final exam.