COURSE NUMBER: ECON 20063

TITLE: Principles of Economics

SEMESTER AND SCHOOL YEAR: 1st Semester 2022-23
NUMBER OF UNITS: 3
FACULTY: Mr. Gabriel M. Gan
SECTION & SCHEDULE: BSIE-BT2-1 Monday 8:00-11:00AM
BSIE-BT2-2 Tuesday 8:00-11:00AM

A. Course Description
This course centers on the basic principles, concepts, and theories of economics that
attempt to explain why economic problems and economic relationships among variables
occur. It describes how economic players are expected to behave in a given situation. It is
also concerned with economic activities such as production, consumption, distribution, and
exchange.

B. Expected Learning Outcomes

Upon completing the course, the student must be able to:

1. Have a clear insight of economic concepts, principles, and variables significant in the
understanding of the performance of the economy.

2. Understand the economic behaviors of the different economic units such as the
consumers, firms, government, and foreign sector.

3. Solve mathematical problems as applications to economic concepts and/or theories.

4. Appreciate events in economic history and understand how the present-day system of
economic came to be.

5. Learn the ways in which the economics explain the activities of man through its tools,
models, principles and standards.

6. Make use of production and consumption concepts in business endeavors or simply in

understanding people’s economic behavior.

7. Manage economic and financial affairs; thereby, achieving a good standard of living for
ourselves, our families and our nation.

8. Understand government’s functions in economics and choose leaders who are

economically sensible.

9. Understand what is happening in the economy of the Philippines and the world and
know how nationwide and worldwide economic policies and events affect us all.
C. Class Structure and Etiquette

Classes will include lecture and discussion components. Student participation is required
in discussions and very strongly encouraged in lectures. This class requires extensive
student participation but you should view participation as an opportunity, not a requirement. I
strongly encourage all students to ask questions, make suggestions, and answer
questions that will be asked or that fellow students ask. I will facilitate discussion during the
discussion sections but encourage students to drive conversation.
You should attend all classes, arrive on time, and engage in robust and respectful
debate with fellow students.

If you have any doubts and don’t understand about what this means, ask me.

You may use laptops, tablets, phones, etc. to take notes during class. I will tell you to stop
using the machine if it looks like you are not paying attention, are not engaged with the
class, or are distracting other students.

D. Course Outline

1. THE NATURE AND SCOPE OF ECONOMICS (5 hours)

▪ Definition of Economics
▪ The Production Possibilities Frontier
▪ Fundamental Economic Problems / Questions
▪ Types of Economic System
▪ Economic Activities
▪ Economic Resources
▪ Economic Goals
▪ Economic Models
▪ Ceteris Paribus
▪ Normative and Positive Economics
▪ Microeconomics versus Macroeconomics
▪ Circular Flow of Income

2. BASIC ELEMENTS OF DEMAND AND SUPPLY (6 hours)

▪ The Market
▪ Demand
▪ Individual Demand and Market Demand
▪ Law of Demand
▪ Demand Schedule and Demand Curve
▪ Non-Price Determinants of Demand
▪ Supply
▪ Law of Supply
▪ Supply Schedule and Supply Curve
▪ Non-Price Determinants of Supply
▪ Market Equilibrium
▪ Shortage and Surplus
3. ELASTICITY AND CONSUMER BEHAVIOR ANALYSIS (5 hours)
▪ The Elasticity Concept
▪ Demand, Income, and Cross Price Elasticity
▪ Elastic, Inelastic and Unitary Demand
▪ Importance of Elasticity Concepts
▪ The Concept of Consumer Behavior
▪ Total Utility and Marginal Utility
▪ The Indifference Curve
▪ The Budget Line
▪ Utility Maximization

4. PRODUCTION & COST (5 hours)

▪ Inputs of Production
▪ Production Function
▪ Total Product, Marginal Product and Average Product
▪ Law of Diminishing Returns
▪ Three Stages of Production
▪ Cost Analysis
▪ Economies of Scale
▪ Revenue and Cost
▪ Profit Maximization

5. MARKET STRUCTURES (4 hours)

▪ Basic Market Models
▪ Characteristics of Market Models
▪ Pure Competition
▪ Monopoly
▪ Monopolistic Competition
▪ Oligopoly
▪ Price and Output Determination

6. INTRODUCTION TO MACROECONOMICS (3 hours)

▪ Definition of Macroeconomics
▪ Macroeconomic Goals
▪ Components of the Macroeconomy
▪ Circular Flow of Funds in a Macroeconomy
▪ The Role of the Government in the Macroeconomy

7. NATIONAL OUTPUT AND NATIONAL INCOME ACCOUNTING (4 hours)

▪ Concept of Economic Growth
▪ Indicators of Economic Growth
▪ Economic Growth vs. Economic Development
▪ Gross Domestic Product
▪ Gross National Product
▪ Nominal versus Real GDP
▪ Approaches to Calculating GDP
8. CONSUMPTION, SAVINGS AND INVESTMENT (3 hours)
▪ Consumption Defined
▪ The Consumption Function
▪ Consumption Patterns
▪ Savings Function
▪ Investment Function

9. INFLATION AND UNEMPLOYMENT (4 hours)

▪ The Concept of Inflation
▪ Demand-Pull and Cost-Push Inflation
▪ Effects of Inflation
▪ Deflation
▪ Unemployment and Employment
▪ Types of Unemployment
▪ Causes and Effects of Unemployment

10. MONEY, CREDIT AND BANKING (4 hours)

▪ Importance of Money
▪ Functions and Kinds of Money
▪ Value of Money
▪ Peso Devaluation
▪ Nature and Functions of Credit
▪ Credit Instruments
▪ Elements of Financial System
▪ The Philippine Financial System
▪ Bangko Sentral Ng Pilipinas (BSP)
▪ Monetary Policies

11. INTERNATIONAL TRADE (3 hours)

▪ International Trade Defined
▪ Economic Basis of Trade
▪ Absolute Advantage and Comparative Advantage
▪ Balance of Trade: Exports and Imports
▪ Trade Barriers
▪ Economic Issues of International Trade
▪ Exchange Rate and Foreign Exchange Market
▪ Globalization

12. FISCAL POLICY AND TAXATION (2 hours)

▪ Fiscal Policy
▪ Government Spending
▪ What is Taxation?
▪ Objectives and Characteristics of Taxation
▪ Classification of Taxes
▪ Philippine System of Taxation
E. Required Reading(s)
University of Minnesota, Principles of Economics, Creative Commons Attribution-
NonCommercial-ShareAlike 4.0 International License, 2016

Dutta, S., Introductory Economics, New Age International Ltd., Publishers, 2006

Any Principles of Economics book; newspaper readings; websites: World Bank, Asian
Development Bank (ADB), International Monetary Fund (IMF), and other development
agency website. You may also use YouTube videos that will help you further your
knowledge in class.

F. Course Requirements
Group Report, Panel Discussion, Recitation and Class attendance 70%
Midterm and Final Exam 30%