Syllabus academic year 2010/2011
(Created 2010-07-25.)
ECONOMICSVVBF10
Credits: 7,5. Grading scale: TH. Cycle: G2 (First Cycle). Main field: Technology. Language of instruction: The course will be given in Swedish. VVBF10 overlaps following cours/es: VVB061. Alternative for: V3. Course coordinator: Lena Hesilius, Lena.Hesilius@tft.lth.se, Road Construction. Assessment: Written report. Home page: http://www.tft.lth.se.

Aim
The aim of the course is to deepen the student's knowledge on economics on the national level and business economics. Within the area of public economics, great importance is attached to the mechanism of the determination of prices, regulated markets, and external effects like environmental effects. The aim is furthermore to increase the understanding of how the public economy works as a whole but also how various evaluation methods can be used to find the most efficient investments and measures. Another aim is to increase the knowledge on various financial and organisational solutions of an investment like tendering and contract arrangements.

Knowledge and understanding
For a passing grade the student must

be able to define, and thoroughly describe keywords like economics and business economics, market economy, planned economy, mixed economy, market failures and regulated markets.

be able to analyse and describe how various measures affect the market

be able to explain how effects not having a direct monetary value, can be valued

be able to formulate goals and conflicts between goals of the society

Skills and abilities
For a passing grade the student must

be able to evaluate a measure or an investment using various evaluation methods

be able to apply, execute, and use cost benefit analysis

be able to identify and assess the effects of a measure/investment and at the same time examine and test the valuation and its fairness.

be able to judge and valuate the need for lifecycle analysis of a measure/investment

Contents
The course is divided into four blocks:

Basic theory and models of economics. Definitions and concepts

Prioritisation and evaluation methods. Price mechanisms and valuations of effects.

Cost benefit analysis

Models of financing

The base of the first part constitutes of economic theories and models. The student will learn: how various markets works, e.g. monopoly, planned economy, market economy, mixed economy; how the prices are put on various markets; how the sensitivity for price changes varies and how this in turn affect our financial means of control; how demand and supply is determined; why certain markets are regulated; the definition of external effects and how we can effect them.

In the second block, various prioritising and evaluation models are discussed. Furthermore, within this block various methods of valuation are discussed. Examples of practical application of evaluation methods are given from various areas like the environmental-, transport- and health care area as well as the industry.

The third block focus on the cost benefit analysis method. The student will learn how to execute and apply a cost benefit analysis. Other issues discussed are e.g. the use of discount rates and the implication on long-term environmental effects, and advantages/disadvantages with the cost benefit analysis.

The block finishing the course contains various models of finance. Here the various contract forms are discussed as well as the distribution of risk. Contact forms and models of finance are related to the definition of functions and how they can be calculated and used in contracts.

Literature
Vår ekonomi, K. Ekelund 2002
Samhällsekonomisk analys, L. Hultkrantz and J-E. Nilsson, 2004
Räkna på lönsamheten Ekonomistyrningsverket 2005:13
Beräkningshandledning, Banverket 2007
Samhällsekonomiska principer och kalkylvärden för transportsektorn: ASEK 4. SIKA rapport 2008:3
Handouts with texts from reports