1.1Briefly discuss each of the following economic ideas: people are rational, people respond to incentives and optimal decisions are made at the margin.

1.2Why might studying economics be particularly a good preparation for being a top manager of a corporation, running your own business, working in international public organisations or having a leading role in government?

1.3Suppose, 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.'Briefly explain whether you agree with the manager's reasoning.

1.4What do economists mean by scarcity? Can you think of anything that is not scarce according to the economic definition?