Principles of Market Economy

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Course Unit Code114-0340/02
Number of ECTS Credits Allocated2 ECTS credits
Type of Course Unit *Optional
Level of Course Unit *First Cycle
Year of Study *Second Year
Semester when the Course Unit is deliveredSummer Semester
Mode of DeliveryFace-to-face
Language of InstructionCzech
Prerequisites and Co-Requisites Course succeeds to compulsory courses of previous semester
Name of Lecturer(s)Personal IDName
SUL080Ing. Monika Šulganová, Ph.D.
The aim of the subject is to make the basis for students’ independent creative
economic thinking. The main emphasis is laid on the behaviour of consumers,
households, firms and government and on the understanding of mutual
relationships among macroeconomic variables. Attention is also paid to the
labour market and capital market. Also economic policy practised by
governments and central banks has a very important role in the course.

Learning Outcomes of the Course Unit
The aim of the course: students are able
- to describe the basic economic cathegories,
- think in independent and creative way about economic problems,
- explain the behaviour of consumers, households, firms and government on the product markets and on the labour market and capital market
- understand mutual relationships among macroeconomic variables.
- explain economic policy practised by governments and central banks.
Course Contents
1. Graphical apparate in economics. Market and market mechanism.
2. Introduction into economics. Two contemporary macroeconomic approaches. Measuring aggregate economic activity and price level.
3. Determinantion of output in AS-AD model.
4. Money, its supply and multiplication process. Impact of central bank and commercial banks on the money supply. Money demand and its determination. Monetary policy theory.
5. Fiscal policy theory. Government budget deficit and debt.
6. Inflation and unemployment – their causes and effects. Relationship between inflation and unemployment.
7. Business cycle and macroeconomic fluctuations. Economic growth.
8. Balance of payments and exchange rate economics. Exchange rate policy and central bank interventions on the currency market. Monetary integration in Europe.
9. Theory of comparative and absolute advantages in international trade. Economic consequences of globalization in the world economy.
10. Introduction into microeconomics. Economic assumptions and context. Production factors, their scarcity, production possibility frontier, opportunity costs.
11. Demand theory. Cardinalist and ordinalist approach to consumer behaviour analysis.
12. Supply theory. Production function of the firm. The firm and its costs. Economic results of the firm (returns, profit, loss).
13. Firm behaviour in perfect competition and imperfect competition conditions. Economic sense of antitrust policy and regulation.
14. Labour market analysis and theory of human capital. Capital market analysis. Theory of capital investment.
15. Economic characteristics of public goods, of their production and consumption.
16. Market failure – economic inefficiency of externalities and ways of their internalization.
17. Distribution of income. Measurement of inequalities. Alternative approaches to economic equality and inequality problem.
Recommended or Required Reading
Required Reading:
Mankiw, G.: Principles of Economics. 5th edition. Mason, USA. South Western Cengage Learning, 2008
Jurečka, V. a kol.: Úvod do ekonomie. Učební text pro studenty
neekonomických oborů, 4. aktualizované vydání. VŠB-TU Ostrava, 2015. ISBN 978-80-248-3731-4.
Recommended Reading:
Paul A. Samuelson, William D. Nordhaus: Economics. 19th ed.. - New York : McGraw-Hill/Irwin, 2009
Holman, R.: Základy ekonomie pro studenty vyšších odborných škol a neekonomických fakult VŠ. 3. vyd. C.H. Beck, Praha, 2015.
Planned learning activities and teaching methods
Assesment methods and criteria
Task TitleTask TypeMaximum Number of Points
(Act. for Subtasks)
Minimum Number of Points for Task Passing
Exercises evaluationCredit85 (85)85
        credit testWritten test85 85