INTRODUCTION TO ECONOMICS

This course introduces students to economics as a systematic way of analyzing human behavior, social interaction, and institutional outcomes under conditions of scarcity, interdependence, and uncertainty. Its central aim is to develop students’ capacity to understand how decision-making units such as individuals, households, firms, and governments make choices in the presence of constraints, incentives, and trade-offs. The course presents economics as a coherent analytical framework for studying how such choices are formed, how they interact, and how they generate broader economic outcomes.

A second purpose of the course is to familiarize students with the normative dimension of economic reasoning. In addition to examining how economists explain behavior and outcomes, the course considers how economic concepts and theories can be used to evaluate alternative states of affairs and alternative courses of action. Students are introduced to criteria such as efficiency, welfare, and equity, and learn to distinguish clearly between explanatory claims and evaluative judgments.

The course also aims to develop students’ command of the principal analytical techniques of economics. These include marginal analysis, model-based reasoning, hypothesis formulation, and the derivation of logically consistent conclusions from explicit assumptions. Emphasis is placed on understanding the role of abstraction, the structure of formal arguments, and the use of economic reasoning to identify causal relationships and assess competing interpretations of observed phenomena.

More broadly, the course seeks to cultivate the characteristic perspective of the economist. Students are encouraged to view economic phenomena through concepts such as opportunity cost, incentives, equilibrium, coordination, and unintended consequences, and to recognize how economists frame problems and construct explanations. Within this broader perspective, the supply-and-demand model serves as a basic analytical tool for examining how costs and benefits are compared, how trade-offs are structured, and how actions and policies affect outcomes across different agents and contexts.

On successful completion of this course, students will be able to:
1. Analyze economic phenomena as outcomes of choice under constraints by identifying the objectives, incentives, trade-offs, and opportunity costs faced by different decision-making units.
2. Apply the core analytical tools of economics—especially marginal reasoning, model-based analysis, hypothesis formulation, and formal logical argument—to explain economic relationships and derive consistent conclusions from explicit assumptions.
3. Use economic concepts and frameworks to evaluate actions and outcomes by distinguishing clearly between positive and normative analysis and by assessing economic arrangements or policy interventions in terms of costs, benefits, efficiency, and other relevant evaluative criteria.
4. Interpret economic and social issues through the economist’s perspective by using the supply-and-demand framework and related analytical tools to understand coordination processes, compare alternative courses of action, and explain the consequences of changes in incentives, institutions, and policy.

Students are required to have excellent knowledge and training in secondary-school level mathematics:
1. Arithmetic:
a. Natural and real numbers, and fractions.
b. Computation and properties of the traditional arithmetic operations—addition, subtraction, multiplication, and division.
2. Elementary algebra:
a. Manipulation of variables as if they were numbers.
b. Simplification of algebraic expressions.
c. Properties of equalities and inequalities.
d. Resolution of linear equations of one variable.
3. Geometry:
a. Computation of length and area of traditional two-dimensional geometric figures—square, triangle, circumference.
b. Angles.
c. Congruency of geometric figures.
4. Graphs analysis: Basic identification, visualization, and analysis of the relationships between entities in a graph.

1. Exchange, prices, and allocations
1.1. Willingness to pay and demand
1.2. Marginal costs and supply
1.3. Market equilibrium as a benchmark of coordination
1.4. Gains from trade, efficiency, and normative evaluation
2. Governments as economic actors
2.1. Policy instruments: taxes, subsidies, and regulation
2.2. Cost-benefit reasoning in public decisions
2.3. Incentive effects and unintended consequences of policy
3. Market power concentration and strategic interaction
3.1. Monopoly as a limiting case of concentrated market power
3.2. Duopoly and strategic interdependence in decision-making
3.3. Consequences of concentration for prices, quantities, and welfare
4. Market failures and the limits of decentralized outcomes
4.1. Information problems and economic decisions
4.2. Prices as carriers of information
4.3. Coordination under dispersed knowledge
4.4. Externalities and social costs and benefits
4.5. Public goods and collective action problems
5. The economy as a whole: aggregates, output, and financial conditions
5.1. The economy considered at the aggregate level
5.2. Main macroeconomic aggregates and their interpretation
5.3. Output determination and expenditure relations
5.4. Saving, investment, and equilibrium conditions
5.5. Interest rates and financial interdependence

This course is designed to make the core concepts and theories of economics accessible to students with only a basic mathematical background by replacing the standard analytical approach with a discrete framework in which goods are treated as indivisible units. This shifts the focus from calculus and algebra to countable, visualizable structures, logical reasoning, and algorithms requiring minimal mathematical preparation. However, because this teaching methodology is non-standard within the profession, there is no textbook on which students can rely for individual preparation.

To address this issue, the teaching material for this course has been designed to be self-contained and comprehensive, so that students can rely entirely on it to achieve the learning goals and prepare for the examination. The slides are self-contained and present the material with the necessary level of detail and depth to serve as a comprehensive resource for individual study. They are complemented by exercises in the form of problem sets, which help students not only consolidate and formalize the knowledge acquired in class, but also expose them to exercises that require critical thinking.

All topics covered in this course are standard in any introductory Economics course. Students may therefore use any such textbook to explore alternative perspectives, deepen the topics studied in class, examine new subjects and questions, and pursue their curiosity further. In particular, students may consult the following two textbooks:
• Economics by Paul Krugman and Robin Wells. McMillan Publisher.
• Principle of Economics by Karl E. Case, Ray C. Fair, and Sharon E. Oster. Pearson Publisher.

However, these textbooks cannot in any way replace class attendance and/or study of the teaching material specifically designed and prepared for this course.

The assessment will be conducted through a 90-minute comprehensive written examination.
• The examination will be administered under closed-book and closed-notes conditions.
• All topics covered throughout the course are subject to evaluation.
• The examination constitutes 100% of the final course grade.
• The grading scale ranges from 0 to 30, with a minimum passing score of 18.

written

The lecturer has a duty to ensure that the rules regarding the authenticity and originality of exam tests and papers are respected. Therefore, if there is suspicion of irregular conduct, an additional assessment may be conducted, which could differ from the original exam description.

Evaluation Grid:
• Scores in the 18-22 range will be awarded in the presence of:
- sufficient knowledge and understanding of the program;
- limited ability to interpret concepts and form independent judgments;
- sufficient communication skills, especially in relation to the use of specific language related to economic concepts.
• Scores in the 23-26 range will be awarded in the presence of:
- fair knowledge and understanding of the program;
- fair ability to interpret concepts and form independent judgments;
- sufficient communication skills, especially in relation to the use of specific language related to economic concepts.
• Scores in the 27-30 range will be awarded in the presence of:
- Good or excellent knowledge and understanding of the program;
- Good or excellent ability to interpret concepts and form independent judgments;
- Fully appropriate communication skills, especially in relation to the use of specific language related to economic concepts.
• Honors (30L) will be awarded in the presence of in-depth knowledge and understanding of the program, exceptional critical thinking skills, and effective communication abilities.

This course has been specifically designed to make the main concepts and theories of the economics profession accessible to students with only a basic mathematical background. To this end, the standard analytical tool of most Economics courses—calculus—is replaced by a framework in which goods are treated as indivisible units. This shifts the analysis from calculus and algebra to discrete mathematics, where the relevant objects, such as quantities, take distinct and separate values rather than varying continuously.

The purpose of this methodological choice is to simplify the analysis of fundamental concepts and models through the use of countable and visualizable structures, logical reasoning, and algorithms that require only minimal mathematical preparation. At the same time, particular care has been taken to ensure that this change in framework does not come at the expense of theoretical rigor. On the contrary, the course shows that concepts, theories, and models originally developed using calculus can also be taught with full conceptual precision through intuitive and visualizable structures such as tilings, counting procedures, and graph-based representations.

This approach should be distinguished from the more common non-calculus methods often adopted in standard textbooks. Those approaches typically replace calculus with elementary algebra and linear functions, representing curves as affine relationships characterized by intercepts and slopes. While this may reduce the reliance on differentiation, it usually does so only partially, since students are still required to solve optimization problems through first-order conditions and to handle systems of equations. By contrast, the discrete approach adopted in this course allows optimization results to be derived without calculus. Students need only basic arithmetic operations—addition, subtraction, multiplication, division—and a clear understanding of equality and inequality relations.

Other alternatives to calculus-based teaching in Economics rely more heavily on rhetorical or graph-centered exposition. These approaches are often appreciated in programs where students have limited mathematical preparation and where the emphasis is placed on qualitative rather than formal results. Their limitation, however, is that they tend to build on economic intuition without fully formalizing the assumptions and logical steps underlying the conclusions. As a result, students may acquire only a partial understanding of the internal and external validity of the results, and may lack the tools needed to question or critically assess the concepts and theories presented to them. By contrast, the approach adopted in this course preserves the rigor of formal reasoning while placing it within a more accessible framework, in which propositional and predicate logic provide the foundations for the analysis of economic concepts and their interrelations.

The central objective of this pedagogical approach is to foster students’ mathematical maturity by encouraging creative, step-by-step, and deductive reasoning, rather than rote memorization of formulas or mechanical procedures.