1. Can you list other contemporary issues that economists work on? What issues do you find most interesting or most vital.

2. What other observations from your every day like do you find interesting and think economists could investigate?

3. Think of a decision that you have made recently. Describe the role of scarcity in that decision. How did you think about costs?

4. You have a part-time job at Coles. Your manager offers you an extra 6 hour shift each week. Should you accept? How would an economist think about this decision problem?

5. Why do we observe different people making different choices given the same decision problem?

6. Why do we observe the same person making different choices when given the same decision problem over time.

Activity: Classroom Experiment

1. Market Incentives: Responding to market rules. Materials and instructions will be provided at the workshop. Prizes!

Problem Solving: Applying Economic Concepts

1. Suppose, Dell Technologies is currently selling 250 000 Inspiron laptops per month. A manager at Dell argues: 'The last 10 000 laptops we produced increased our revenue by $8.5 million and our costs by $8.9 million. However, because we are making a substantial total profit of $25 million from producing 250 000 laptops, I think we are producing the optimal number of laptops.' a.

Briefly explain whether you agree with the manager's reasoning. Be sure to use the language of an economist.

2. Assume that the state and territory governments throughout Australia increase the price of water in an attempt to reduce consumption for domestic use. What are the equity considerations with this policy?

3. Suppose you own a small business selling bakery goods. You have been experimenting with the pricing of your pies. The following table presents the relationship between the price of pies and the number of pies you sold per week. Your next step is to analyse these sales data.

PRICE QUANTITY OF PIES WEEK

$3.00 6 2 July

2.00 7 9 July

5.00 4 16 July

6.00 3 23 July

1.00 8 30 July

4.00 5 6 August

a. Describe the relationship between the price of pies and the number of pies sold. Provide possible explanation for the observed relationship using the concepts introduced this week.

b. Plot the data from the table on a graph. Draw a straight line that best fits the points.

c. Calculate the slope of the line and interpret.

4. Suppose you manage a fishing boat in Wynyard that has a license to fish and sell blue warehou. Each fishing trip costs $900. Over the last year, you have recorded data and noted the total benefit or revenue from the number of trips per week fishing for blue warehou.

Number of Trips per week Total Revenue $/week

0 $0

1 $1,000

2 1,920

3 2,760

4 3,520

5 4,200

6 4,800

Use marginal analysis to determine how many fishing trips per week should be made in order to maximise net benefit or profit (total revenue less total cost)? Explain your reasoning and show any calculations or tables you made to determine your answer.