ECO1010F - Microeconomics

Course Information

Welcome to ECO1010F, the first year course in microeconomics. Microeconomics focuses on the economic behaviour of individual consumers and firms/companies. In this course we will attempt to answer the following type of questions:

• Why do clothing shops like Edgars and Foschini sometimes have sales?
• Which factors cause me to buy, or not to buy, a specific product?
• What is the relationship between costs and the production of a firm?
• Why are Microsoft and De Beers so big and powerful?
• How do these companies use this power to their advantage?

In the second semester the focus of ECO1011S will fall on macroeconomics. In macroeconomics we are not interested in an individual consumer or firm, but in the stability and growth of the whole economy, taking all consumers and all firms together. ECO1011S will introduce you to concepts such as total consumption, investment, unemployment, inflation, the interest rate, the exchange rate, international trade and capital flows, the economic role of government, fiscal policy, monetary policy, etc.

ECO1010 and ECO1011 together constitute the equivalent of a full first year course in Economics. To enter ECO1011S you have to pass ECO1010, or at least get a supplementary exam. If you fail ECO1010F, you may register for ECO1010S in the second semester. ECO1010S is equivalent to ECO1010F. To register for the first semester of the second year of Economics (ECO2003F), you have to pass ECO1010, either in the first or second semester, or in the summer term (see below).

You will notice that things are very different at university than at school. You have lots of freedom, the lecture theatres are large, the volume of work is significantly more than at school, and nobody looks over your shoulder to see if you are coping. The change is often quite daunting. To maximise your chances of success, we suggest that you follow the following guidelines:

• Be prepared. Read the relevant sections in the textbook in advance. These are indicated on the course outline. It is also useful to read the textbook after the lecture, but from our experience it is usually best to read the textbook before the class begins, so that you can follow the lecturer more easily.
   
• Ask questions. If you have read the textbook in advance, you know what to expect in the lecture. The lecturer should hopefully make difficult concepts clearer. If the explanation in class does not settle the matter in your mind, approach the lecturer during his or her office hours, after the lecture, or ask a question during the lecture. Do not be shy and think that you will work it out at home. It usually does not work.
   
• Make the best use of the tutorials. Tutorials offer you the opportunity to practise the theoretical concepts covered in the lectures, in a small learning group environment. Learning is an active process. Simply reading the material will not be enough to pass. You need to draw the diagrams (and there are many of them) and do the calculations yourself. Experience has shown that students that work diligently for and in tutorials tend to perform much better in tests and the exam than those that take a casual approach.
   
• Meet in Study Groups. One of the best ways to prepare for tests and exams is to meet with friends and other students (around 3-4 people) who are also studying 1st year economics. Look at previous test and exam papers and discuss possible answers. Having to explain concepts and diagrams to other students will show you if you really understand the material. When you can explain it to other students you will also be able to write a good answer in the test/exam.