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Principles of Economics

Lecture in Summer Semester 2014

Principles of Economics

Prof. Dr. Bernhard Neumärker
Martha Kontodaimon M.Sc.

Albert-Ludwigs-Universität Freiburg
Department for Economic Policy and Constitutional Economic Theory



Time and Room:
  • Mondays, 11.00-13.00, Alte Uni HS2
  • Wednesdays, 10.00-12.30, Alte Uni HS 1
  • Friday, June 27th, 8.30-15.00, KG I HS 1034
  • Saturday, June 28th, 8:30-15:00, KG HS 1140
Start: May 26th, 2014



  • This course is designated for second-year students of the University College Freiburg (Bachelor of Arts and Liberal Sciences). It is an elective course.
  • Recommended prerequisites: None.
  • This module is entirely taught in English.
  • 6 ECTS-points



M. Kontodaimon M.Sc.
E-mail: martha.kontodaimon AT vwl.uni-freiburg.de
Office hours: On appointment


Prof. Dr. Bernhard Neumärker
E-mail: bernhard.neumaerker AT vwl.uni-freiburg.de



  • Outlines and slides are provided at this website.
  • Literature will be provided on ILIAS.
  • The passwords will be provided in the first lecture (May 26th, 2014).



Class Material 


 Blocked Sessions


Outline and References




Main Thema


Students‘ Presentations

Class 1

Introduction to the class and Economic Thinking

WPR: Introduction pp. 17-23





EET: “Why study economics and Its history” pp. 444-445




CIE1: “Introduction” pp. 3-14




PoE: Ch.1: “Ten Principles of Economics” pp.3-18



Note: in this class the students will be assigned their presentations topics as well.

WPR: Ch.3 “The wonderful world of Adam Smith” pp. 57-102 (this reading is relevant for Classes 1&2)






Class 2

Connecting Economic Thinking to everyday world.

PoE: Ch.2 “Thinking Like an Economist” and 3 “Interdependence and the Gains From Trade” pp. 19-60




FE: Ch.1 “What do Schoolteachers and Sumo Wrestlers Have in Common?”  19-51




WPR: Ch.3 “The wonderful world of Adam Smith” pp. 57-102 (this reading is relevant for Classes 1&2) 






 Class 3

Supply and Demand

PoE: “The Market Forces of Supply and Demand” Ch.4 pp. 63 - 83

Thomas Malthus



EET: “Mathematical Economics” pp. 288 – 306

David Ricardo



CIE1: “From One to some” pp. 51 – 64 & “From Some to many” pp. 117 – 142






Class 4


PoE: Ch.5 “Elasticity and Its Application” pp. 89 - 109

John Stuart Mill



CIE1:  “Elasticity – The Big Picture” pp. 169 - 192

The Utopian Socialists: Owen, Saint-Simon,



Note: In this class we will play a “game” for developing Market Demand and Demand Elasticity







Class 5

Markets Efficiency and Production Costs

PoE: Ch.7 “Consumers, Producers, and the Efficiency of Markets” pp. 137 – 154

Ch.13 “ The Costs of Production” pp. 267 – 284

Marx Part1



DD: “Communism” pp.94 – 102

Marx Part 2



TFS: Ch. 27: “The Endowment Effect” pp.289 - 299






Class 6

Externalities, Public Good and Commons

PoE: Ch. 10 “Externalities” & Ch.11 “Public Goods and Common Resources” pp. 203 - 236

The Victorian World and the Underworld of Economics



CIE1:  “Cake Cutting – Pareto Efficiency” pp. 68 – 88

The Marginalist School: Alfred Marshall


Note: In this class we will make a simulation of a Public Good “game”







Class 7

Consumers’ Choices

PoE: Ch. 21 “The Theory of Consumer Choice” pp.454 –  467         Ch. 22 “Frontiers of Microeconomics” pp. 480 –  493

Thorstein Veblen



DD: “So What Is Capitalism Anyway?” pp. 345-355

School of Welfare Economics



FE: Ch.2 “The Ku Klux Klan and Real-Estate Agents” pp. 55 - 85






Class 8

GDP and Cost of Living

PoE: Ch.23 “Measuring a Nations Income” pp. 500 – 514

Ch. 24 “Measuring the Cost of Living” pp. 520 – 531

John Maynard Keynes Part 1



DD: “State and Credit Theories of Money” pp. 46 – 52

John Maynard Keynes Part 2



CIE2: “Introduction to Macroeconomics” pp. 4 – 16 & “Gross Domestic Product” pp. 59 – 72






Class 9

Production, Growth and Investment

PoE: Ch.25 “Production and Growth” pp. 537 – 553

Ch.26 “Saving, Investment, and the Financial System” pp. 568 – 570

Friedrich Hayek



CIE2: “Money” pp. 31 – 44 & “The Role of Government” pp. 73 – 86

Eucken, Walter









Class 10

Unemployment and Inflation

PoE: Ch.28 “Unemployment and Its Natural Rate” pp. 600 – 620

Ch.30 “Money Growth and Inflation” pp. 646 – 663

New Keynesians



CIE2: “Unemployment” pp. 17 – 30 & “Inflation” pp. 45 – 58

Joseph Schumpeter


Note: In this class the students will play the “Fed Chair” game provided online by the federal reserve bank of San Fransisco








Class 11


PoE: Ch.31 & Ch. 32 “The Macroeconomics of Open Economics” pp. 675 – 715

James Buchanan



EC: “The Smuggling Gap” pp. 53 – 75

Milton Friedman



CIE2: “Complications – Foreign Aid ” pp. 111 – 139






Class 12

Aggregate Demand and Supply

PoE: Ch.33 “Aggregate Demand and Supply” pp.721 - 751

Robert Solow



CIE2: “The End” pp. 205 - 218

Joseph Stiglitz


References and Literature Abbreviations:

"Principles of economics" by N. Gregory Mankiw  : PoE

"Economics" by David Begg; Stanley Fischer; Rudiger Dornbusch: EconD

"Economics" by Joseph E. Stiglitz; Carl E. Walsh: EconJ

“Freakonomis” by S.D. Levitt: FE

“Debt” by David Graeber: DD

“Thinking fast and slow” by David Kahneman: TFS

“Worldly Philosophers” by Robert L. Heilbroner : WPR

“The Evolution of Economic Thinking” by Jacob Oser’s : EET

“The Economic Gangsters” by Raymond Fishman: EC

“The Cartoon Introduction to Economics: Volume One” by Grady Klein and Yoram Bauman: CIE1

“The Cartoon Introduction to Economics: Volume Two” by Grady Klein and Yoram Bauman: CIE2


* For their presentations the students will be directed to the books “Worldly Philosophers” by Robert L. Heilbroner  and “The Evolution of Economic Thinking” by Jacob Oser’s  as well as  http://www.dictionaryofeconomics.com/dictionary.

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