Question One
a) “I paid $1500 for this economics course. Therefore, I am going to attend the lectures even if they are useless and boring.”
This is not an example of sound 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 not achieving maximum utility by attending the lectures.

In this situation, the economic decision maker would attempt to maximise net benefit and consider the concept opportunity cost. Considering they have already spent the $1500 for an activity which is “useless and boring”, the economic decision maker would consider undertaking other activities which he/she would obtain maximum utility – such 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.”......

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Title: Economics Questions In Real Life Scenarios
Approximate Word Count: 626
Approximate Pages: 3 (250 words per double-spaced page)

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