ECON112

PRINCIPLES OF ECONOMICS 2

(Semester Two 2017)

ECON112: Principles of Economics 2 (18 points) (Prerequisite: BSNS104 or BSNS113)

Continues on from BSNS113, and extends the analysis of predominantly market

economies and how they work as a whole, both in New Zealand and international

contexts. Topics include: consumer choice, economic growth, labour markets,

business cycles, monetary policy and the role of the Reserve Bank, the global

financial crisis (GFC) the economics of information, externalities and public goods,

and the appropriate role of government.

Specific questions analysed will include:

Why are living standards higher in some countries than others?

What causes economic booms and recessions?

How and why does the Reserve Bank control interest rates?

What can be done about unemployment?

What can be done about poverty?

What caused the GFC?

Did governments respond appropriately to the GFC?

How does economics analyse environmental issues?

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FAQs

Answers to some of the more Frequently Asked administrative Questions:

Q: When do tutorials begin? A: The second week of the semester.

Q: How do I find out what tutorial stream I have been assigned to? A: You can find this information on eVision.

Q: What do I do if I haven’t been assigned to a tutorial stream? A: Please contact Terry Kerr (CO5.16, ph: 479 8647, email: terrence.kerr@otago.ac.nz).

Q: The tutorial I have been assigned to clashes with something else (e.g., a part-time job). What do I do?

A: Please contact Terry Kerr (CO5.16, ph: 479 8647, email: terrence.kerr@otago.ac.nz).

Q: I haven’t been assigned to a lecture stream, or the lecture stream I have been assigned to clashes with something else. What do I do?

A: Go to the other lecture stream. You are permitted to change streams as long as there is room for you. (You do not have to tell anyone.)

Q: I missed my tutorial (e.g., I was sick). What do I do? A: Hopefully it is possible for you to attend another tutorial group that week. Make sure you

inform your regular tutor and the tutor whose tutorial group you will attend. If this week is an assessment tutorial, you can do the assessment question at any tutorial this week, again let the tutors affected know about this. However, it is NOT possible for you to hand an answer in at any other week.

Q: I missed a lecture, what do I do? A: Start by reading the textbook and any other supplementary material provided. Copies of

lecture slides and/or handouts will be available on Blackboard. Get a copy of the slides and do the reading. Alternatively, you may have a friend doing the course who will lend you his/her notes.

Q: Do I have to buy the textbook for this course (Principles of Economics, Gans, King, Stonecash, Byford, Libich and Mankiw, Cengage Learning, 6th edition, 2015)?

A: No you do not have to buy it. But you do have to read it. There well may be used second–hand copies available. Several copies are available on Close Reserve in the Central Library (for you to borrow for two hours at a time, for free).

Q: Can I use the the earlier editions of the Gans et al. text book (e.g., 4th or 5th edition)? A: Yes you can. You are however responsible for cross-checking the corresponding Chapters and

page numbers in the earlier editions.

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Learning aims and objective This course follows on from BSNS113. The emphasis is on understanding economic principles and models, and their application to real world issues. It is your understanding of the principles and models, and your ability to apply them to real world situations that will be examinable. We will not just test whether you have memorised what has been said in lectures. It is in tutorials that you will develop these skills, so you should consider attendance at tutorials to be just as important as attending lectures, if not more so.

Teaching Staff

Lecturers

Terry Kerr (weeks 1-6)

Office: 5.16 Commerce Building Phone: 479 8647 Email: terry.kerr@otago.ac.nz Office Hours: To be advised

Arlene Ozanne – Course Coordinator (weeks 7-12)

Office: 5.18 Commerce Building Phone: 479 9079 Email: arlene.ozanne@otago.ac.nz Office Hours: To be advised

Administrative Staff Departmental Secretary: Janet Bryant Office: 5.06 Commerce Building Phone: 479 8656 Email: janet.bryant@otago.ac.nz Office Hours: Mon-Fri: 8:30-12, 1-5 Receptionist: Donna Cumberbeach

Office: 5.01a Commerce Building Phone: 479 8725 Email: donna.cumberbeach@otago.ac.nz Office Hours: Mon-Fri: 9-3:30

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Course info, notices & the Economics Department website The Department of Economics is housed on the 5th Floor of the Commerce Building. Administrative notices will be posted on Blackboard: www.blackboard.otago.ac.nz (and enter your username & password). Lecture slides will be posted on Blackboard before each lecture. Blackboard also allows us to email the whole class. As such emails will be sent to your student email address, it is important that you check your student email regularly, or have your student emails forwarded to another email address. To do this, follow the instructions below. Forward your University email address to an email address that you use regularly as follows:

1. Log into your StudentMail account using your student username and password 2. Click Cog button (top right corner) > Options 3. Under Account, select the Forward your email shortcut under the Short Cuts menu

on the right side of the screen. 4. At the bottom of the screen, type in the email address you want your email to be

forwarded to. You can also choose to have a copy of these emails kept on your StudentMail account, so please check the box if you would like this.

5. Click the Start forwarding link at the bottom of the page.

Quality Assurance

At the Otago Business School we monitor the quality of student learning and your

learning experience. Your assessed work may be used for assurance of learning processes,

such as evaluating the level of achievement of learning outcomes, with the aim of

improving the quality of our programmes. All material used for quality assurance

purposes will be treated as confidential and the outcome will not affect your grades.

Grading System

The grading scheme used at Otago is:

A+ 90-100 C+ 60-64

A 85-89 C 55-59

A- 80-84 C- 50-54

B+ 75-79 D 40-49

B 70-74 E <40

B- 65-69

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Three lectures each week, two streams Because of the large numbers of students, the class is split into two identical streams:

Stream A: Tuesday, Thursday, Friday @ 10 am

Stream B: Tuesday, Thursday, Friday @ 11 am

Thus, each 10 am lecture (Stream A) will be repeated at 11 am (Stream B). The stream that you are allocated to, and the lecture theatres to go to, will be posted on eVision.

Week beginning Tuesday Thursday Friday

1 10 July Lecture 1 Lecture 2 Lecture 3

2 17 July Lecture 4 Lecture 5 Lecture 6

3 24 July Lecture 7 Lecture 8 Lecture 9

4 31 July Lecture 10 Lecture 11 Lecture 12

5 7August Lecture 13 Lecture 14 Lecture 15

6 14 August Lecture 16 Lecture 17 Test 1 (18 Aug)

7 21 August Lecture 18 Lecture 19 Lecture 20

28 August Mid-sem. break Mid-sem. break Mid-sem. break

8 4 Sept Lecture 21 Lecture 22 Lecture 23

9 11 Sept

Lecture 24 Lecture 25 Lecture 26

10 18 Sept Lecture 27 Lecture 28 Test 2 (22 Sept)

11 25 Sept Lecture 29 Lecture 30 Lecture 31

12 2 Oct Lecture 32 Lecture 33 Lecture 34

13 9 October Catch-up/Revision

Lecturers: =Terry Kerr = Arlene Ozanne

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Weekly tutorials

Tutorials are weekly and start in the second week of the semester and are designed to review and extend material covered in lectures. There will be two types of questions asked in tutorials. Some of the questions you will be asked to prepare your own answers to before the tutorial. For these questions you should come along ready to discuss your answers with the rest of the group. There will also be questions that you will work on in groups during the tutorial. Although you do not need to prepare answers to these questions before the tutorial, there will often be reading that you need to do before the tutorial in order to answer these questions. It is important that you do this reading before the tutorial. A handout at the start of their section containing a reading list for that section of the course will be made available that will also contain the tutorial questions. Seven of the twelve tutorials will be denoted as assessment tutorials. Part of the time in these tutorials will be taken up by you writing up an answer to one of the questions covered in the group work component of the tutorial. This will form part of your mark for the course. Note that your written answer can only be handed in during your tutorial. More details are provided in the section on assessment below. You will be allocated a tutorial and information on which tutorial you have been streamed into can be found on eVision. If you have a valid reason for not being able to attend the tutorial you have been streamed into, please contact Terry Kerr (CO5.16, ph: 479 8647, email:

terrence.kerr@otago.ac.nz). This also applies if you do not have a tutorial stream listed on eVision (so don’t panic!).

Model answers to tutorial questions will not be made available Model answers to tutorial questions will not be made available. It is your responsibility to prepare your own answers to tutorial questions before the tutorial. (In the case of the questions discussed in groups, you can make your own notes during the tutorial.) Note also that tutorials may contain discussion-type questions, to which there is no one correct answer.

You should plan to devote 12 hours per week to this course This is based on the University’s ‘rule of thumb’ for an 18-point course. Four of these hours are spent in lectures and a tutorial – leaving 8 hours per week for your own reading and study and revision.

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Assessment

All material presented is examinable (except where stated otherwise) by tutorial hand-ins,

tests and a final examination. Important assessment information such as due dates and

times, content, guidelines and so on will be discussed at lectures and, where appropriate,

detailed on Blackboard. Students are responsible for ensuring that they are aware of this

information, keeping track of their own progress, and catching up on any missed classes.

Your learning will be assessed through the following:

Assessment Weight

Tutorial hand-ins 5%

Mid-semester test 1 15% or 10%

Mid-semester test 2 15% or 10%

Final examination 70%

We calculate your final mark in two ways:

Tutorial hand-ins (5%) + Test 1 (15%) + Test 2 (10%) + Final exam (70%)

Tutorial hand-ins (5%) + Test 1 (10%) + Test 2 (15%) + Final exam (70%)

Your final mark is the highest of the two.

You should also be aware that – aside from providing feedback on how you are coping

with the paper and some insurance against a poor performance on the final exam – your

internal assessment grades are also an important factor in determining eligibility for ‘Final

Exam Only’ (should you fail the paper) and the form of Special Consideration that might

be offered (should you be ill or otherwise impaired during the final exam).

Tutorial hand-ins (5%) Seven of the twelve tutorials held throughout the semester will be designated as assessment tutorials. In these assessment tutorials, you will be required to hand-in an individual answer to a problem you have worked on during the tutorial. It will be indicated in the handout for each section of the course, which tutorial question will be assessed. When handing in your answer, make sure you write both your name and ID number at the top of the page. If you get a pass mark for your written answer, then you will get one mark towards your internal assessment. If you don’t get a pass mark, you are awarded zero marks towards your internal assessment. Your best five marks from the seven tutorial hand-ins will count towards your internal assessment, giving a maximum of five marks. Your written answer can only be handed in during your tutorial (on the answer sheet that will be provided by your tutor). It is not possible to hand it in to the lecturer or your tutor at any other time. We realise that students sometimes have a good reason for missing a tutorial (e.g. ill health), which is why we only count the mark from the best 5 of your 7 assessment tutorials. It is

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important that you attend all the assessment tutorials you are able to, in case you are unable (e.g. through illness) to attend one of the assessment tutorials later in the course. The assessment tutorials will be held on the following weeks:

#1 Tutorial 1 (Week 2 beginning 17th July)

#2 Tutorial 4 (Week 5 beginning 7th August)

#3 Tutorial 5 (Week 6 beginning 14th August)

#4 Tutorial 7 (Week 8 beginning 4th September)

#5 Tutorial 8 (Week 9 beginning 11th September)

#6 Tutorial 10 (Week 11 beginning 25th September)

#7 Tutorial 11 (Week 12beginning 2nd October) Mid-semester tests (15% or 10% each) Test 1 is planned for Friday, 18 August during the usual lecture time, and will cover lecture and tutorial material from weeks 1 to 4 of the course. Test 2 is planned for Friday, 22 September during the usual lecture time, and will cover lecture and tutorial material from weeks 5 to 8 of the course.

Both tests count towards your final mark. These tests are weighted as follows: your

best test weighs 15%, and the other weighs 10%.

Students need to sit the test during the stream they are officially registered for – check your timetable from eVision. These dates are subject to final confirmation, however, it is very likely these will be the test dates; (the test dates will be confirmed early in the semester). More details on the exact format of the test will be provided closer to the time. Note it is not possible to sit the test at any other time. Final exam (70%) The final exam will be three hours long, and made up of a combination of multi-choice, and written-answer questions. The final exam will cover the whole course. The University will report the exam timetable later in the semester.

Special consideration If you consider your performance in the end-of semester examination to be seriously impaired, or if you are too ill to sit an examination, you can apply for Special Consideration. To do this you will need to obtain an application form from the University Information Centre or Student Health. Please note that applications for Special Consideration must be made within five calendar days from the date of the last examination for which the application applies and must be accompanied by supporting documentation, such as a medical certificate.

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Academic Integrity and Academic Misconduct (Plagiarism)

Students should ensure that all submitted work is their own. Plagiarism is a form of

dishonest practice (cheating). It is defined as copying or paraphrasing another’s work and

presenting it as your own. Any student found responsible for dishonest practice in any

piece of work submitted for assessment shall be subject to the University’s dishonest

practice regulations, which may result in serious penalties, including forfeiture of marks

for the piece of work submitted, a zero grade for the paper, or in extreme cases, exclusion

from the University. The University of Otago reserves the right to use plagiarism

detection tools.

Students are advised to inform themselves about University policies concerning dishonest

practice and take up opportunities to improve their academic and information literacy. If

necessary, seek advice from academic staff, or the Student Learning Centre. The guideline

for students is available at this link: http://www.otago.ac.nz/study/plagiarism/

The Library resource on ethical use of information is available via this link:

http://oil.otago.ac.nz/oil/module8.html

Student Feedback We encourage your feedback. This can be in the form of contacting staff, participating in

course evaluation surveys and communicating with class representatives. Continual

improvements will be made to this course based in part on student feedback.

Class Representatives

The class (or student) representative system is an avenue for encouraging communication

and consultation between staff and students. It provides you with a vehicle for

communicating your views on the teaching and delivery of the paper and provides staff

with an opportunity to communicate information and gain constructive feedback from

students. It contributes to the development of a sense of community within a department

and it adds a further dimension to the range of support services offered to students.

Volunteers for the role of class representatives will be called early in the semester. The

OUSA invites all class representatives to a training session, conducted by OUSA, about

what it means to be a class representative and some of the possible procedures for dealing

with issues that arise. They also provide information on the services that OUSA offers and

the role OUSA can play in solving problems that may occur. The OUSA provides support

to class representatives during the semester. Departmental staff will also meet with class

representatives during the semester to discuss general issues or matters they wish to have

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considered. Your class representative’s name and contact details will be posted on

Blackboard early in the semester.

Concerns about the Course

We hope you will feel comfortable coming to talk to us if you have a concern about the

course. The Course Coordinator will be happy to discuss any concerns you may have.

Alternatively, you can report your concerns to the Class Representative who will follow

up with departmental staff. If, after making approaches via these channels, you do not

feel that your concerns have been addressed, there are University channels that may aid

resolution. For further advice or more information on these, contact the departmental

administrator or head of department.

Topics covered in ECON112 this year A list of topics that we intend to cover is given below, with the relevant chapter(s) from the text book (Gans, et al., 6th edition 2015) given in parentheses. For some topics, supplementary readings will also be used, which will be handed out free of charge. Each lecturer will distribute a handout at the start of their section of the course. This handout will contain detailed readings lists, supplementary readings, as well as the tutorial questions for that section of the course. Many of these topics build on previous topics. Therefore it is important you keep up-to-date with the course, or you will find it difficult to catch up. Weeks 1 - 6 Terry’s section Topic 1 Indifference Curves (Chapter 22; Supplementary Reading) Topic 2 Taxes and Externalities (Chapters 10 and 12) Topic 3 Public Goods, Prisoner’s Dilemma and Common Property (Chapter 11; Supplementary Reading) Topic 4 Oligopoly and Frontiers in Economics (Chapters 17 and 23) Topic 5 Labour markets and Income Distribution (Chapters 19, 20, 21 and 28) Topic 6 Production functions, factor accumulation, and Economic Growth (Chapter 26)

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Weeks 7 - 12 Arlene’s section

Topic 7 Introduction to Macroeconomics; Short-run economic fluctuations (Chapter 33; Supplementary Reading) Topic 8 Monetary policy (Chapters 29, 30, 33 and 34; Supplementary Reading) Topic 9 The Keynesian model (Chapters 34 and 35; Supplementary Reading) Topic 10 Aggregate Demand and Aggregate Supply (Chapters 33, 34 and 35) Topic 11 Phillips Curve and expectations (Chapters 33, 34 and 35) Topic 12 The Global Financial Crisis and Major debates in macroeconomics (Chapters 36 and 37; Supplementary Reading) Week 13 Revision/catch-up

We hope that you enjoy this course. We intend to! Cheers Terry and Arlene

Disclaimer

While every effort is made to ensure that the information contained in this document is

accurate, it is subject to change. Changes will be notified in class and via Blackboard.

Students are encouraged to check Blackboard regularly. It is the student’s

responsibility to be informed.

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Student Learning Support and Information

Student Charter

http://www.otago.ac.nz/about/otago005275.html

Guidelines for Learning at Otago

http://hedc.otago.ac.nz/hedc/wp-content/uploads/2012/12/Guidelines-for-Learning.pdf

http://hedc.otago.ac.nz/hedc/learning/

Student Learning Centre

The Student Learning Centre, which is part of the Higher Education Development Centre,

provides learning support, free of charge, to ALL enrolled students. Their services include:

a workshop programme designed to help students to improve their learning strategies

and their generic skills;

individual assistance with learning issues;

on-line study skills advice;

a student leadership programme

a student-led peer support programme for students of all ages and backgrounds.

conversational English groups for students from a non-English speaking background

The Centre also provides two very helpful study guides, “Guidelines for Writing and

Editing” and “Writing University Assignments” and these are available on the SLC

website. http://hedc.otago.ac.nz/hedc/learning/

Library Support

The Library website http://www.otago.ac.nz/library provides access to resources and

services, including group room bookings, library hours and locations, past exam papers,

subject guides, article databases and more.

If you need assistance either check out the self-help guides

http://otago.libguides.com/selfhelp, or ask Library staff at the ground floor service desks,

or email ask.library@otago.ac.nz

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Māori Student Support

Emere Leitch-Munro - Kaiārahi Māori

Tel 479 5342 Email emere.leitch-munro@otago.ac.nz You can find me in the Office of the Dean on the Ground Floor of the Business School. I am in the office Mondays, Wednesdays and Thursdays, but my office hours vary so please email me if you wish to make an appointment to see me.

Pacific Islands’ Student Academic Advisor

Warm Pacific Greetings

Talofa lava, my name is Esmay Eteuati and my role is to liaise with Academic

Departments and Student Services relating to Pacific students’ and their course of study. I

support both staff and students in the Business School and have a network of Pacific

contacts in other Divisions around the University.

Tel +64 3 479 4756 Email: esmay.eteuati@otago.ac.nz

Disability Information and Support

Students are encouraged to seek support if they are having difficulty with their studies

due to disability, temporary or permanent impairment, injury or chronic illness. It is

important to seek help early, through one of the contacts below:

Janet Bryant

Rm 5.06 Otago Business School

479-8656

Janet.Bryant@otago.ac.nz