Introduction to Economics: Tutorial 1
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Questions and Answers

What is the main opportunity cost of purchasing battery electric buses?

  • Financial investment in renewable energy
  • Cost of maintaining diesel buses
  • Increased air pollution
  • Funds that could have supported other public transport initiatives (correct)

    • Marginal analysis involves decision-making based on additional costs and benefits.

    True

    What could firms potentially do to improve environmental outcomes?

    Adopt greener practices or technologies

    Opportunity cost refers to the next best __________ of a choice.

    <p>alternative</p> Signup and view all the answers

    Match the economic concepts with their definitions:

    <p>Incentives = Financial motivations created by governments for firms. Marginal Analysis = Approach for comparing additional benefits and costs of a decision. Opportunity Cost = Value of the next best alternative that is forfeited. Green Policies = Government strategies to promote environmental sustainability.</p> Signup and view all the answers

    What is one reason for the increase in interest rates by the Banque du Cairo?

    <p>To control inflation</p> Signup and view all the answers

    Salaries have grown 5 percent more than inflation over the year.

    <p>False</p> Signup and view all the answers

    What economic sector is the company Tornado considering exporting to Poland?

    <p>Electric blenders</p> Signup and view all the answers

    The volume of exports in 2022 is still below pre-pandemic __________.

    <p>records</p> Signup and view all the answers

    Match the following economic concepts with their definitions:

    <p>Macroeconomics = The study of economies on a large scale, focusing on total and aggregate factors. Microeconomics = The study of individual and business decisions, typically focused on supply and demand. Pollution rights = A market-based approach to control environmental pollution through tradable permits. Inflation = The rate at which the general level of prices for goods and services rises.</p> Signup and view all the answers

    What is the main focus of economics?

    <p>How society manages its scarce resources</p> Signup and view all the answers

    Opportunity cost refers to the benefits of the next best alternative that is forgone when making a decision.

    <p>True</p> Signup and view all the answers

    Name the two main branches of economics.

    <p>Microeconomics and Macroeconomics</p> Signup and view all the answers

    People respond to ________, which can induce them to change their behavior.

    <p>incentives</p> Signup and view all the answers

    Match the principle of economics with its description:

    <p>People face trade-offs = Making decisions requires giving up one goal for another. Rational people think at the margin = Considering additional benefits and costs. Market organization = A means for buyers and sellers to exchange goods. Government intervention = To correct market failures and allocate resources efficiently.</p> Signup and view all the answers

    What happens when the government prints new money?

    <p>Inflation occurs</p> Signup and view all the answers

    Markets are always efficient and do not require government intervention.

    <p>False</p> Signup and view all the answers

    What is the trade-off between unemployment and inflation?

    <p>As the money supply increases, spending rises, leading to higher prices (inflation) and potentially lower unemployment.</p> Signup and view all the answers

    Study Notes

    Introduction to Economics: Tutorial 1

    • Economics is the study of how society manages its scarce resources.
    • Economics is divided into microeconomics and macroeconomics.
    • Key principles of economics include:
      • People face trade-offs.
      • The cost of something is what you give up to get it (opportunity cost).
      • Rational people think at the margin (comparing marginal benefits and marginal costs).
      • People respond to incentives.
      • Markets are a good way to organize economic activity.
      • Governments can sometimes improve market outcomes.
      • Prices rise when governments print more money.
      • Trade-offs exist between unemployment and inflation.

    Course TAs

    Student Assessment Methods

    • Assignment (group activity) - 10%
    • First Milestone - 5%
    • Second Milestone - 5%
    • In-tutorial flipped classroom activity - 10%
      • First presentation - 5%
      • Second presentation - 5%
    • Midterm Exam - 20%
    • Quizzes - 20%
    • Final Exam - 40%

    Tutorial Agenda

    • Review of lecture material (summary of lecture and key words).
    • Tutorial sheet (likely to contain practice questions).

    Question 1. Micro versus Macroeconomics

    • Examples of issues related to microeconomics: the price of a specific product, a specific company's business decisions, individual salary changes.
    • Examples of issues related to macroeconomics: interest rate changes by the central bank, overall inflation, trade volume.

    Question 2. True or False

    • Multiple true/false questions relating to different economic concepts.

    Question 3. Principles of Economics

    • Governments use incentives to create a financial incentive for firms to be more environmentally friendly. (e.g by introducing a 'cap and trade' scheme. Opportunity cost, marginal analysis.)
    • Firms will choose a product based on the additional benefits of their choices, and the additional costs involved. Opportunity cost is the value of the next best alternative.

    Question 6. Opportunity Cost

    • The Ministry of Environment is purchasing e-buses.
    • Opportunity cost is the next best alternative for the money spent.
    • An analysis of what else could have been purchased with the money and what benefit would have been generated from spending it on an alternative use.

    Question 8. Discussion prompt

    • Discussion of whether economics is the most suitable approach to determining effective policy.
    • Kate Raworth's view that economic models frequently lack consideration of environmental impact & unpaid labor.

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    Description

    This quiz covers the fundamental principles of economics, including the distinction between microeconomics and macroeconomics. It highlights key concepts like trade-offs, opportunity costs, and the impact of government on markets. Prepare to test your understanding of how economic activity is organized in society.

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