The course examines how individuals and firms make decisions by weighing up costs and benefits, and how the interaction of their decisions leads to market and social outcomes. The model of market supply and demand is employed to examine the effects of taxes, subsidies, and other government interventions in market activity. The implications of different market structures, including perfect competition and monopoly, are examined.  Public goods, externalities and common resources are key examples of cases in which private markets may yield socially sub-optimal outcomes.  Such cases are examined and the role of government policy in correcting for these is discussed. Special attention is given to the design of schemes aiming to reduce carbon emissions.

On satisfying the requirements for this course, students will:
• understand the economic principles that underpin modern economics;
• have a basic understanding of the way budget constrained individuals make optimising choices and the way resources are allocated in private markets;
• understand the role of different trading arrangements in markets and their impact on prices and the quantities traded;
• use basic economic principles to evaluate the effects of government interventions and other exogenous changes in markets;
• be able to evaluate the effects of government interventions in markets;
• present clearly written analysis of economic issues and problems

The final mark comprises 85% from ECON1101 plus the ECON7073 compulsory essay at 15%.

Three lectures a week, one seminar plus a tutorial.

At least an average of 65% (or equivalent) in the final two years of an Australian undergraduate degree.

Please see Course Website