Economics Questions in Real Life Scenarios

Question One a)I paid $1500 for this economicals course. Therefore, I am going to attend the lectures even if they ar vapid and boring. This is non an lesson of well(p) economic thinking. The person has stated the lectures are useless and boring, implying that there are much more useful and interesting activities which could be foregone instead of attending the lectures. In other words, the speaker is non achieving maximum public utility by attending the lectures. In this situation, the economic decision shaping machine would attempt to maximise net benefit and consider the judgment opportunity cost. Considering they have already spent the $1500 for an activity which is useless and boring, the economic decision maker would consider task other activities which he/she would obtain maximum utility such(prenominal) as watching a movie, working at a shop or any other activity which is not useless and boring. b)Housing prices in Sydney are overvalued. This is an example of a normative economic statement, as it implies that housing prices should be lowered as they are currently overvalued. Economists attempt to be scientific, through a positive framework by stating what exists establish on evidence (positive) rather than what should exist (normative).

Hence, this statement does not demonstrate sound economic thinking. If the statement was Housing prices in Sydney are the highest they have ever been in history, and was support by relevant evidence, it would be an example of sound economic thinking as this is a positive statement. c)I make 1,000 shares that I cannot afford to sell until the price goes up equal for me to pack back my original investment. This is not an example of sound economic thinking. The original investment is sunk cost, and the resources spent cannot be recovered. It would be a better to sell the shares and find a alternative. d)The reason why profit maximizing firms often depend on lower prices at higher output levels is because... If you want to get a full essay, order it on our website: Orderessay

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