Study Guide
Taylor’s University

Undergraduate Business Programmes
BUS1604/ECN60104
Microeconomics
March Semester 2016

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TUTORIAL 1 (WEEK 2): INTRODUCTION - THE NATURE AND METHOD OF
ECONOMICS. THE ECONOMIZING PROBLEM (CHAPTER 1&2)
CLASS ACTIVITIES:
• Recap Lecture 1
• Tutorial exercises
LEARNING OUTCOMES:
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Understand the meaning and significance of economics.
Distinguish between microeconomics and macroeconomics.
Explain various types of economic choices and to appreciate the concept of opportunity cost.
Understand the marginal concepts and how they relate to rational choices.
Construct, interpret a production possibility curve and understand its significance within the micro and macro perspectives.
Describe economic efficiency.
Understand the importance of ceteris paribus assumption.
Distinguish between positive and normative statements.

TUTORIAL EXERCISES.
Question 1
In a paper written by Bentley College economists Patricia M. Flynn and Michael A. Quinn, the authors state: We find evidence that Economics is a good choice of major for those aspiring to become a
CEO. When adjusting for size of the pool of graduates, those with undergraduate degrees in
Economics are shown to have had a greater likelihood of becoming an S&P 500 CEO than any other major.
A list of famous economics majors published by Marietta College includes business leaders Warren
Buffet, Donald Trump and Diane von Furstenberg. Why might studying economics be particularly good preparation for being the top manager of a corporation or a leader in government?

Question 2
In a mixed economy, does the government decide what goods and services should be produced? Briefly discuss the reasons for your answer.

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Question 3
Explain which of the following statements