Economics I

Introduction

This course provides a broad introduction to economics, covering central topics from both microeconomics and macroeconomics. Microeconomics equips students with the tools to analyse how individuals and firms make decisions under scarcity, and how these decisions aggregate into market outcomes. Students will learn to apply key concepts and models to understand consumer and firm behaviour and their adaptation in a market economy, with particular emphasis on understanding when markets function well and when they fail – and what implications this has for social welfare and public policy.

The macroeconomic part of the course provides an introduction to the main aggregates of the national accounts, basic frameworks for understanding business cycle fluctuations in a small open economy, and central mechanisms underlying wage formation in the labour market.

A defining feature of the course is that economic problems are analysed using mathematical and algebraic methods, in combination with graphical and verbal reasoning. Students will practise translating economic arguments into formal expressions and interpreting the results as meaningful economic insights – an approach that is fundamental to the study of economics and that prepares students for further work in the field. As part of this process, AI-based language models will be integrated as learning tools, and students will develop a critical and reflective approach to the use of such tools in an academic context.

Course content

• Economics and core concepts: scarcity, incentives, marginal analysis and differentiation as an analytical tool.
• Consumer choice: preferences, the budget constraint, utility maximisation and the derivation of demand.
• Demand and elasticities: price and income elasticities – mathematical derivation and interpretation.
• Saving and intertemporal choice: the two-period model, interest rates, income and borrowing and saving decisions.
• The firm in the market: production functions, cost structures and profit maximisation under perfect competition and monopoly.
• Market theory: supply and demand, market equilibrium and comparative statics – algebraic and graphical analysis.
• Policy in the market: price regulation, taxes and subsidies – effects on equilibrium and welfare.
• Market failure and welfare: efficiency, consumer and producer surplus, externalities and public goods.
• The labour market: supply of and demand for labour, wage formation and wage differences.
• Macroeconomic aggregates and the national accounts: GDP, consumption, investment and the external economy.
• Business cycle fluctuations in a small open economy: aggregate supply and demand in the short run.

Disclaimer

This is an excerpt from the complete course description for the course. If you are an active student at BI, you can find the complete course descriptions with information on eg. learning goals, learning process, curriculum and exam at portal.bi.no. We reserve the right to make changes to this description.