This course aims to provide a general study of basic economic principles. It presents economics not only as a mere body of knowledge but also as a method to understand the current economic problems.
Major topics are as follows: the nature and methodology of Economics; demand and supply; pricing and allocating factors of production; market failure and public choice; externalities and the environment; national income determination models; fiscal policy; money and banking in Hong Kong; monetary policy; inflation and business cycles; macroeconomic policy challenges; trading with the world; and balance of payments and exchange rates.

Econ. 111-2 Mathematics for Economists I & II

2 Terms; 6 Credits

This course will provide students with a solid mathematical background to explore the more sophisticated topics in economics in their theoretical and empirical contexts.
Major topics covered are as follows:

(1) calculus of functions of one variable - derivatives, differen-tials, optimization conditions;
(2) calculus of functions of two or more variables - partial derivatives, total differentials, total derivatives, comparative statics, Taylor series, implicit functions, optimization conditions, Euler's theorem;
(3) constrained optimization subject to one or more constraints;
(4) integration - indefinite and definite integrals;
(5) linear models and matrix algebra;
(6) transposes, inverses, determinants, Cramer's rule, eigen-values and eigenvectors, rank characteristic roots and quadratic forms; and
(7) mathematics of finance.

Econ. 308 The Economy of Contemporary China

1 Term; 3 Credits

This course aims to give the students a broad overview of the open-door policy in China, not only economically, but also politically. Students will gain a better understanding of the historical background behind the policy and insights into the future direction of China's national policy.

The lecture topics include the following:
(1) A historical review of contemporary China's open-door policy on foreign trade.
(2) A historical overview of contemporary China's internal reform programmes.
(3) The reform of state enterprises in China.
(4) The reform of rural economy in China.
(5) The development of market economy in China.
(6) Current trends of China's open-door policy.
(7) The development of China's stock markets.
(8) The reformation of China's political system.
(9) The conflicts of special interests and changes of social structure arising from the openness and reforms.

Econ. 310 Financial Institutions in Hong Kong

Prere: Econ. 101-2 1 Term; 3 Credits

This course aims to provide students with a better understand-ing of the history, development and current situation of the financial institutions in Hong Kong. Major topics include: Hong Kong as an international financial centre, theory of financial intermediation, and depository and non-depository financial institutions in Hong Kong. There will also be discussion of cases.

Major Areas of Content:

(1) Technical Concepts and the Gains from Trade:
supply and production possibilities; preferences, demand and welfare; general equilibrium in closed and open economies; gains from trade.
(2) Cause and Consequences of Trade:
the causes of international trade; differences in technology; the Heckscher-Ohlin model; the specific-factor model; government policies as determinants of trade; imperfect competition as a determinant of trade and the gains from trade; increasing returns to scale; tastes per capita income and technology change as determinants of trade; empirical studies of comparative advantage.
(3) Trade Policy:
tariffs; quotas and other nontariff barriers; imperfect competition, increasing returns, and strategic trade policy; preferential trade areas; the political economy of trade policy; administered protection.
(4) Factor Trade, Growth and the Theory of Direct Foreign Investment:
trade in factors of production; intertemporal trade; north-south trade issues.