Economics is for Everyone (All Course Videos)
Hi Everyone,
In 2019, I launched the course ‘Economics is for Everyone’ on Udemy. The course has always been available free-of-charge. The course contains 24 videos, which amounts to about 4 hours of content. The course has 64 multiple-choice questions and 2 scenario questions as well as handouts of the slides from the videos and a few other bonus materials.
The course has had over 3,500 enrolments. It currently has a rating of about 4.3 Stars. Unfortunately, only about 30 to 40 course attendees provided feedback and a relatively low percentage finished the whole course. I think more people were drawn to the course because it is free rather than the content. Since the release of this course, Udemy has limited free courses to only 2 hours of video content. Older free courses are allowed to remain but they cannot be updated unless they are priced. I do not plan on charging for this course.
I have decided to publish all the videos from the ‘Economics is for Everyone’ course on Odysee and YouTube. I am sharing the full course through Hive (includes written explanations of each section and unit, and all questions). I believe my reach on Udemy is limited and I would rather direct users to Hive rather than Udemy.
The post will be included in a collections post (feature on PeakD), which will also include my four collection of works series pf posts as well my Actifit series. This will raise the visibility of the content on my Spectrumecons Page even after newer content has pushed this post much lower down on my Front Page.
Course Description
I believe economics courses should target as broad an audience as possible. This is because economics is all around us. Our everyday lives are affected by economics. People even apply economic theory without even realising it. In fact, I believe economics courses should begin with real life examples of how we use economics in our daily lives.
This course will begin by taking you on a quick journey of a hypothetical day. The course will point out where economics is at work and where theory is being applied to make decisions. The discovery part of economics will occur during the first 5 to 6 units of this course.
The next area to be covered will be the theory. Many courses are highly theoretical. This course will focus on the theory, which I believe, is most applicable to most people. The observed use of economics will be revisited in light of what has been covered in the first part of the theory section. The theory section will continue by further shedding light on theory, which is applicable to us. The latter part of the theory section is important for us to understand the broader application of economics.
The remainder of the course will be focused on the application of economics. We will now be armed with a good theoretical background to help explain why certain decisions are made in the world. This part of the course is divided into three sections. The first section focuses on the application and the logic of that application. The second section focuses on the misuse and abuse of economics. The third section discusses how we can use our knowledge of economics to improve our lives and the lives of those around us.
Section 1
This section aims to create an understanding of the extent that economics effects our lives and the lives of those around us.
Unit 1
This first unit begins with a brief introduction of the presenter followed by a brief outline of the course and structure. Students should feel familiar with the course structure and the line-up of units to come.
Unit 2
The course work and assessment approach adopted for this course will be a simple ongoing assessment, which will involve answering several multiple-choice questions at the end of each unit. At the end of the course, students will be able to test their understanding of the course content by attempting several scenario questions. Scenario questions have been designed to test the student’s understanding of the course by placing the student in scenarios where they are required to apply economic concepts to reach desirable outcomes. The student is free to apply any economic theory they choose. Students are free to apply knowledge from outside the course or even outside of economics if it helps. Economics has a tendency to borrow theories from other subject matter.
Unit 3
This unit takes us on a brief journey of how economics is part of everyone’s lives. Our lives, the lives of those around us, and the world as a whole. This unit should give the student some appreciation of the extent economics is around and why learning more about it is important.
Questions
Which of the following activities are an application of economics?
A) Choosing what to eat for breakfast
B) Riding a bicycle
C) Playing football
D) All of the above
Which of the following people apply economics on a daily basis?
A) Your best friend
B) The man driving the bus
C) The Prime Minister
D) All of the above
Why is it important to understand economics?
A) You use economics everyday
B) The people around you use economics
C) Understanding economics can help you succeed in life
D) All of the above
Unit 4
This unit focuses on how we apply economics to our own lives. The unit looks at our daily lives and decisions that are made on a regular basis. The unit considers decisions that are made on the spot, patterns of decisions and one-off and infrequent decisions. The student should be able to acknowledge the different types of decisions we face.
Questions
What are the advantages of predetermining decisions?
A) Saves time, saves money, and makes planning easier
B) Saves time, improves quality of decisions, and improves security
C) Saves money, improves happiness, and raises revenue
D) Saves money, improves quality of decisions, and reduces fatigue
Which of the following statements is true
A) One-off decisions are always more important than decisions that are made regularly
B) One-off decisions generally cost more money
C) Economics are less applicable to decisions made on a daily basis
D) Marketing is more important for products that are purchased on a daily basis
How does economics relate to education?
A) Education increases future earning potential
B) Education improves efficiency
C) Education demonstrates opportunity cost
D) All of the above
Unit 5
This unit looks at the people around us. The people we live with, our friends, people that provide us services, people we provide services to and those we work with. Everyone around us also uses economics. We need to understand what drives other people to make the decisions they make and how we should best respond. The student should be able to recognise the actions of others and understand differences in preferences and objectives of those we encounter.
Questions
Who does not use economics?
A) My boss
B) My barber
C) A new born baby
D) Nobody
Why would your friend pay $10 for a pizza that you would not have bought for $6?
A) Your friend has different tastes from you
B) Your friend does not value money
C) Your friend does not know how to count
D) Your friend is a good tennis player
Which of the following is the better deal?
A) Buy one and get one free
B) On sale for half price
C) Buy two and get two free
D) All of the above
Unit 6
This unit looks at society as a whole and how economics relates to the big picture. The unit considers banks, Governments, businesses, and even other countries. The application of economics is extremely wide. The student is expected to understand how economics used in the big picture affects us.
Questions
Which of the following statements is false?
A) The Government makes decisions that affect you
B) The Government spends your money
C) The Government always acts in your best interest
D) The Government has a purpose
What does your bank have control over?
A) Your happiness
B) Your money
C) The interest rate of your savings account
D) The foreign exchange rate
Why would GDP increase while my salary does not?
A) GDP is a measure of national income and does not reflect everyone’s individual incomes
B) GDP is a lie
C) GDP is irrelevant, I should compare my salary to real GDP per capita instead
D) My salary is affected by tax
Section 2
This section aims to explain some of the most relevant and applied theories in economics.
Unit 7
This unit introduces the key theories section of this course. At this point, the course aims to introduce the student to some of the most important and most applied theories in economics. This unit is not particularly detailed but aims to give the student a feel for the next 6 to 7 units in the course.
Questions
What is utility?
A) It is the value of something in dollars
B) It is the level of satisfaction that you obtain from a good or service
C) It is the energy and power you consume
D) It is how useful something is
What does a Production Possibility Frontier (PPF) show?
A) All the combinations of goods and services that can be produced with optimal usage of existing resources
B) All possibilities of production
C) The value of technology
D) The maximum income a country can acquire
Which of the following statements is true?
A) Both demand and supply are downward sloping
B) Supply is downward sloping and demand is upward sloping
C) Demand is downward sloping and supply is upward sloping
D) Both demand and supply are upward sloping
Unit 8
This unit investigates utility. Utility is one of the most important and applied concepts in economics. It is a key driving force behind demand. This unit provides a definition of utility, explains why it is important, explains what is meant by diminishing marginal utility, and considers courses of action when there is limited information to determine potential utility. After this unit, the student should have a good grasp of utility and have some idea of how it is applied.
Questions
What causes diminishing marginal utility?
A) Changing tastes and preferences
B) The law of demand
C) Saturation of needs and wants
D) The utility function
What is an indifference curve?
A) A curve that shows personal indifference between two goods
B) A curve that measures utility
C) A curve that shows an array of preferences for different utilities
D) A curve that explains diminishing marginal utility
How should people make decisions when there is limited information?
A) They should make a wild guess
B) Make a decision based on what satisfies their needs
C) Gather more information
D) Both B) and C)
Unit 9
This unit focuses on production and costs. Utility may drive our needs and wants but production addresses how these needs and wants are met. This unit looks at factors of production, combinations of factors, cost structures, and production on an economy wide scale. At the end of this unit, students should have a good understanding of production and costs.
Questions
What are the four factors of production?
A) Land, technology, workers, and investment
B) Entrepreneurship, land, labour, and capital
C) Land, capital, machinery, and labour
D) Land, innovation, technology, and buildings
What are marginal costs?
A) The average cost per unit
B) The additional capital cost per unit
C) The additional total cost per unit
D) The additional labour cost per unit
What is the optimal factor input?
A) Anywhere along the isoquant
B) Anywhere along the isocost
C) When the isocost is tangent to the isoquant
D) When marginal costs are not diminishing
Unit 10
This unit focuses on demand and supply. This unit pulls together some of the theory from the previous two units. Utility supports demand and production supports supply. The unit looks at the different shapes of demand and supply curves and considers the impact on price and quantity when demand or supply changes. At the end of the unit, students should have a good understanding of how demand and supply is used to determine price and quantity.
Questions
How is price determined using the demand and supply model?
A) Where demand and supply intersect
B) The lowest point on the supply curve
C) The middle of the demand curve
D) The price is determined by the highest bid
What typically happens when demand increases?
A) Price increases and quantity demanded falls
B) Price decreases and quantity demanded increases
C) Price increases and quantity demanded increases
D) Supply increases and quantity demanded falls
What happens when aggregate demand increases (macroeconomic model)?
A) Price increases and real GDP remains constant
B) Real GDP increases and price remains the same
C) Both price and real GDP increases
D) All of the above are possible
Unit 11
This unit explores market structure. Market structure is not typically viewed as one of the most critical units in economics. I tend to disagree, as market structure greatly influences the shapes of demand and supply curves. This ultimately determines the price and quantity of products sold. Four market structures are briefly discussed in this unit. They are perfect competition, monopoly, monopolistic competition, and oligopoly. On completing this unit, students should understand the different types of market structure and the effect they have on efficiency and equilibrium price and quantity.
Questions
In which of the following market structures does the firm have no influence on market price?
A) Monopoly
B) Oligopsony
C) Monopolistic Competition
D) Perfect Competition
Which of the following statements is false?
A) Monopolies are often inefficient
B) Perfect competition rarely exists in the real world
C) In monopolistic competition, firms compete using product differentiation
D) Perfectly competitive firms are profitable in the long-run
What type of market structure are telecommunication markets typically considered
A) Monopsonies
B) Perfectly competitive
C) Oligopolies
D) Monopolistically competitive
Unit 12
In this unit, we revisit our observations from units 3, 4, 5, and 6. After exploring some economic theories, we can link how these theories apply to our previous observations. What theories link to daily choices? What theories link to how we handle other people? After completing this unit, students should be able to understand where different theories apply to their own lives.
Questions
Why would someone choose to eat cereal instead of sausages and potatoes for breakfast?
A) Cereal can be prepared quicker than sausages and potatoes
B) Cereal tastes better to them than sausages and potatoes
C) Habit
D) All of the above
Why do people work long hours at a job they do not like?
A) They need the money
B) They suffer from some form of mental illness
C) Because that is what society expects
D) All of the above are possible
Why is the price of a television higher than the price of a pizza?
A) Demand for televisions is higher than pizza
B) Televisions have a higher cost of production
C) Pizzas are heavily subsidised
D) All of the above
Unit 13
Microeconomics and macroeconomics are often separated in courses. This could create the impression that they are fundamentally different. This unit explains the differences between the two areas but also explains how they are fundamentally supported by the same key theories. The unit provides the examples of demand and supply and efficiency to demonstrate how macroeconomics and microeconomics are linked. After this unit, students should be able to distinguish between macroeconomics and microeconomics. They should also be able to understand how they are connected.
Questions
Which of the following are considered in macroeconomics?
A) Inflation
B) National Income
C) Unemployment
D) All of the above
Microeconomics deals with …
A) Individual people and firms
B) Trade Policy
C) Monetary Policy
D) All of the above
Which of the following statements are correct?
A) Microeconomics and macroeconomics are basically the same
B) The same economic principles support both microeconomics and macroeconomics
C) Microeconomic and macroeconomic theory are mutually exclusive
D) Unemployment is only a macroeconomic problem
Unit 14
In this unit, several important microeconomic concepts are briefly discussed. These concepts include opportunity costs, scarcity, externalities, and game theory. After this unit, students should have some general idea about these concepts but the unit is not sufficient for the student to be fully informed. I would recommend additional reading for a more complete understanding. However, this unit is an important guide to identifying theory that is most relevant to most people.
Questions
Which of the following is a negative externality?
A) A lower quality product
B) Water pollution from a factory
C) Second-hand cars
D) Higher education
What is the likely opportunity cost of going on holiday to Rome?
A) The airfare and accommodation
B) Airport tax
C) A holiday to Paris and difference in expenses
D) Sharing a hotel room with your noisy children
How do you increase the value of your human capital?
A) Attend university
B) Obtain an apprenticeship
C) On-the-job training
D) All of the above
Which of the following games require cooperation and coordination to succeed?
A) Prisoner’s dilemma and battle of the sexes
B) Prisoner’s dilemma and chicken game
C) Chicken game and battle of the sexes
D) Prisoner’s dilemma, chicken game and battle of the sexes
Unit 15
This unit investigates several important macroeconomic theories. These theories are national income, employment, and inflation. The unit explains the different types of national income. The unit explains the relationship between unemployment and inflation. The unit looks at a few important macro models such as the AD/AS model and the Phillips Curve. On completion of this unit, students should understand the causes of unemployment and inflation as well as some of the consequences.
Questions
Which of the following is a cause of inflation?
A) Higher demand for your currency
B) Lower demand for goods and services
C) Increased supply of currency
D) Higher unemployment
Which of the following statements is false?
A) Higher demand increases GDP
B) Inflation increases GDP
C) Government expenditure increases GDP
D) Decreasing money supply increases GDP
When does both higher inflation and higher unemployment occur?
A) When demand for goods and services increases
B) When demand for goods and services decreases
C) When costs of production increase
D) When there is a small budget deficit
Unit 16
This unit continues exploring macroeconomics. In this unit, intervention is explored. Monetary and Fiscal policies are explained. The unit explains when these policies are used as well as the expected effects of such policies. The unit takes a quick look at income inequality and how it is handled. The unit also briefly describes international trade and its importance to economic growth. The unit ends by providing some brief theory about economic growth. At the end of this unit, students should understand how economic policy is applied as well as some of the negative effects.
Questions
Which of the following statements is false?
A) Reducing current account deficit will reduce national debt
B) Increasing the value of net exports increases GDP
C) Reducing the budget deficit can contribute to reducing national debt
D) Theoretically, the balance of payments should equal zero
Which of the following is an example of monetary policy?
A) Raising taxes
B) Building a school
C) Raising the cash rate
D) Building more banks
Which of the following is an example of contractionary fiscal policy?
A) Raising taxes
B) Building a school
C) Demolishing a school
D) Subsidising clean energy
Unit 17
This unit focuses on money. It is very important to understand how money functions, and how it is created. This unit explains the types of money, characteristics of money, the functions of money and how it is created. The unit also considers the effects of increasing and decreasing the supply of money on the economy. After this unit, students should have a sound understanding of what money is and how its creation effects them.
Questions
Which of the following is not a characteristic of money?
A) Possesses intrinsic value
B) Issued by a central bank
C) Limited supply
D) Easily divisible
If a central bank issues $200 to a bank and the reserve ratio is 20%, what is the total amount of money created?
A) $200
B) $160
C) $1000
D) $2000
What impact does increasing money supply have on the economy?
A) Decreases inflation
B) Reduces unemployment
C) Decreases investment
D) Decreases national income
Section 3
This section aims to apply the theories explained in the previous section to the real world. This section aims to provide an understanding of how economics can be used to improve our lives.
Unit 18
This unit considers the broader application of economics. The unit takes much of what we have learnt so far and applies it to the real world. The unit looks at four important questions. These questions are whom produces, who it is produced for, what is produced, and how is it produced. These questions span across both microeconomics and macroeconomics. Knowledge of economics can help us address these questions. After this unit, students should have a fair understanding of how economics can be used to address these questions. They should be able to understand when to apply theories learnt in early units to address these questions.
Questions
Which of the following statements is true?
A) Governments know exactly how resources should be allocated
B) Government intervention is always desirable
C) Free markets allocate resources based on needs and wants
D) Markets fail more often than they succeed
Which of the following statements are false?
A) Profit maximising is always bad
B) Hiring more workers is sometimes better than investing in capital
C) Equilibrium price and quantity cannot always be reached
D) All of the above
Which of the following is a benefit of an open economy?
A) Access to more goods and services
B) Lower prices
C) Greater economic growth
D) All of the above
Unit 19
This unit looks at how economics is applied in a negative way. Economics can be used for the benefit of people but sometimes it is used to benefit just a few people and at the expense of others. Investment decisions are made to increase power and standing and not public need. Money is created to distort the wealth of some. Prices are artificially raised to increase profits. Lending is made too appealing to raise prices and increase debt. Students should be able to understand the potential for abusing economics and be able to recognise when this is taking place.
Questions
Why is scarcity good for producers?
A) Reduces the total cost of production
B) Enables firms to raise prices
C) Firms are able to obtain more monopoly power
D) All of the above
Which of the following statements are true?
A) Reducing the required down payment for houses increases the price of houses
B) Rental prices and house prices are unrelated
C) It is the Government’s responsibility to provide housing to the public
D) High birth rates do not contribute to housing shortages
Why do Government’s overinvest in infrastructure?
A) They overestimate the benefits of their projects
B) They underestimate the cost to society from not investing
C) There is more incentive for analysts to support Government investment decisions
D) All of the above
Unit 20
This unit explores the potential abuse of economics further. The unit considers profiting at the expense of people’s health. The unit considers how wars can achieve both economic growth and profits but at the expense of other nations. The unit looks at how game theory can be applied to increase profits and power whilst increasing resistance with the illusion of choice. After units 19 and 20, the student should understand that economic theory could be used to the detriment of people and nations if the incentive to do so exists.
Questions
Which of the following statements regarding healthcare is true?
A) There is more incentive to cure people than make money
B) Treatment is more profitable than cure or prevention
C) Higher Government spending on healthcare always improves the quality of healthcare
D) It is universally accepted that private healthcare is always superior to public healthcare
What are the economic benefits of war?
A) Increased employment
B) Increased economic activity
C) Increased international influence
D) All of the above
What economic theory supports the existence of the two party political system?
A) Game theory
B) Producer theory
C) Consumer theory
D) Coase Theorem
Unit 21
This unit provides a brief overview of economic modelling. The unit provides the reasons for economic modelling, how it is done, and when it should be done. The unit also links the principles behind economic modelling to possible real life application. The student should gain an appreciation of economic modelling and its application. This unit does not provide the tools for a student to conduct their own economic modelling.
Questions
Which of the following is not a likely benefit of economic modelling?
A) It can assess the likely effectiveness of a policy
B) It can increase consistency of analysis
C) It can reduce costs of small businesses
D) It can improve decision making
When should economic modelling be conducted?
A) Prior to an event
B) After an event
C) Both prior and after the event
D) When an initiative costs more than $50M
When is general equilibrium modelling recommended?
A) Any investment over $100M
B) When a project, initiative or policy is deemed to have broad national significance
C) Whenever the funding is available
D) All expansionary fiscal policy initiatives
Unit 22
This unit focuses on understanding economics and how simply understanding how it functions can improve the quality of your life. The unit still works around the themes of understand how economics affects you, those around you and the world in general. Students should gain a further appreciation of the extent of economics in the world. They should understand how economics influences their decisions as well as the decisions of those around them.
Questions
Which of the following statements is most accurate?
A) A $50 pizza tastes better than a $5 pizza
B) More money is preferential to less money regardless of what was required to obtain it
C) Preferences are completely subjective and not dependent on price
D) Understanding opportunity costs can help people make better decisions
How can we use economics to improve our relationships with others?
A) Economics helps us identify other people’s needs and wants
B) Economics is a good topic for small talk
C) Friends can be bought
D) All of the above
How can knowledge of economics help us understand decision making of others?
A) People make decisions based on perception rather than facts
B) People have motives that are not always apparent
C) Economics is just as applicable to everyone else
D) All of the above
Unit 23
This unit looks at how economics can be applied to improve our lives. The unit looks at incorporating economics in decisions both basic and complex. The unit emphasises the importance of being able to investigate the world around us to find the answers we seek rather than just relying on others who may have other agendas. On completion of this unit, the student should have a much broader understanding of the application of economics as well as how it is used and can be used to improve the quality of their own lives. At this point, the student should be fully aware that economics is everywhere and everyone needs some basic understanding to obtain the most out of life.
Questions
Which of the following statements are true?
A) We are always aware of the most important decisions we will make
B) We can choose which decisions affect the short-run and the long-run
C) We should carefully analyse every decision we make
D) Money is always the most important factor in decision making
Which of following economic theories is most relevant to your life?
A) Game theory
B) Demand and supply
C) Bounded rationality
D) Any of the above
Which of the following statements is false?
A) People act in their own perceived best interest
B) People act in my best interest if it is also in their own best interest
C) Psychic income is an incentive for altruist behaviour
D) Kindness is normally the most important factor in decision making
Unit 24
This unit describes the scenario questions. The example from unit 2 is explained in detail. A possible answer to this question is explained. The unit contains two scenario questions for students to complete in their own time. These questions do not have fixed answers but require the application of economics to devise answers. The questions require knowledge from all areas of the course and I would recommend that students include their own knowledge and experience to produce the best answers.
Sample Question (Unit 24)
You run a very successful doughnut shop. However, a new doughnut shop opened 2 months ago. This new shop is very popular and is starting to win over some of your customers. The new shop sells similar doughnuts but charges less per a doughnut. The new shop also has its own special doughnut, which is very popular.
Your shop sells three types of donuts: plain, iced, and fancy. The cost of ingredients for each doughnut are as follows:
- Plain cost $0.30.
- Iced cost $0.40.
- Fancy cost $0.60.
It takes 1 hour to make 50 doughnuts of any type. Batches of doughnuts are always made in 50s
Your shop hires 2 people plus yourself. You pay each person $15 an hour to work 6 hours a day 5 days a week. You pay $200 a week for rent. All other monthly overheads add up to $500 (20 working day month).
On average, your shop currently sells: 100 plain, 60 iced, and 50 fancy doughnuts a day.
Your shop makes 150 plain, 100 iced and 50 fancy doughnuts a day. The remaining doughnuts are thrown away.
Six months ago, your shop sold: 140 plain, 90 iced, and 45 fancy doughnuts a day.
Your shop made the same number of doughnuts per day as it does now.
Your shop sells the doughnuts at the following prices.
- Plain doughnuts $1.50
- Iced doughnuts $2.00
- Fancy doughnuts $2.50
Your customers typically buy more than one doughnut. Normally your customers buy 1 plain with either an iced or a fancy doughnut.
Your new competitor sells their doughnuts at the following prices.
- Plain doughnuts $1.30
- Iced doughnuts $1.80
- Fancy doughnuts $2.40
- Special doughnuts $2.30
Costs and sales data are not available for your new competitor. The competitor has 2 people working in the shop. The shop appears to be using the same equipment as your shop. Therefore, the new shop is unlikely to be able make as many doughnuts as your shop. The opening hours are the same as your shop.
As the shop owner, what course of action would you take to remain competitive with the new shop?
Possible Answer:
The following is my approach to the question. There are no fixed answers. Any answer that provides a logical response will be considered.
I would begin by calculating the existing costs and revenue for the shop.
Costs
| Item | Total ($) |
|---|---|
| Staff | 3600 |
| Rent | 800 |
| Overheads | 500 |
| Plain | 900 |
| Iced | 800 |
| Fancy | 600 |
| Total | 7200 |
Revenue
| Item | Current | Previous |
|---|---|---|
| Plain | 3000 | 4200 |
| Iced | 2400 | 3600 |
| Fancy | 2500 | 2250 |
| Total | 7900 | 10050 |
Profit has fallen from $2850 to $700.
Next, I will consider wastage from unsold doughnuts
Wastage
| Item | Current | Previous |
|---|---|---|
| Plain | 50 | 10 |
| Iced | 40 | 10 |
| Fancy | 0 | 5 |
Wastage of plain and iced doughnuts has increased to almost 1 batch each. All fancy doughnuts are sold.
Proposed solutions
I propose three changes that the doughnut shop could make. These changes are as follows:
- Introduce ‘Commodity bundling’.
- Reduce price at the end of the day.
- Split one batch into half iced doughnuts and half fancy doughnuts.
Commodity bundling
I would provide options to buy two doughnuts together. Option A has one plain doughnut and one iced doughnut. Option B has one plain doughnut and one fancy doughnut. The price of buying the two doughnuts together would be less than buying them separately. I would price options A and B as follows:
- Option A $3.00 ($0.50 less than buying both separately and $0.10 less than buying from the new shop)
- Option B $3.50 ($0.50 less than buying both separately and $0.20 less than buying from the new shop)
I would not reduce the price of the individual doughnuts. This may encourage the customers intending to buy just one doughnut to buy one of the options instead.
Reduce price at the end of the day
If there were unsold doughnuts in the last half-hour of business, I would reduce the price by half. Any additional sales at this point could be considered as profit as the left over doughnuts are just thrown away.
Split one batch into half iced doughnuts and half fancy doughnuts
Almost an entire batch of iced doughnuts are currently wasted but all the fancy doughnuts are sold. It is possible that more fancy doughnuts would be sold if more were made. However, this is unlikely to be as many as another full batch. Just 6 months ago, the shop was selling just 45 fancy doughnuts. I do not expect the demand for fancy doughnuts to have increased by more than 100%. Increasing the number of fancy doughnuts to 75 a day, would give us a better idea of the demand for fancy doughnuts. If they continue to sell out, then I would recommend further increasing the number made.
Expected outcome from changes
The new shop appears to be gaining an advantage from lower prices. Their special doughnut is popular but that could be because it is slightly cheaper than the fancy doughnuts (assumed close substitute). The popularity of the special doughnut has not affected the sales of the fancy doughnut. This could be an indication of changing preferences for fancier doughnuts or just a more rapidly increasing demand for these doughnuts.
I expect selling plain doughnuts with iced or fancy doughnuts to bring back many of the customers from the new competitor. I also expect the ‘options’ to attract new customers as well. Even if selling the doughnuts together does not increase sales, the revenue from the doughnuts from the end of the day will still result in higher revenue than with the existing strategy.
What could go wrong?
When making any changes it is worth considering what could go wrong once the changes are implemented.
It is possible that the lower prices was not the reason people switched to the new shop. Therefore, lowering the price might make very little difference. It is possible that the new shop has a cheaper production method. It is possible the new shop could lower their prices further if they have lower costs. This could result in a price war that will be difficult to win. Selling doughnuts at half price at the end of the day could encourage many people to wait until the price drops rather than buy earlier, thus reducing revenue by more than keeping a fixed price and wasting the leftovers.
Alternative courses of action
Once the changes have been implemented, the results should be observed carefully.
Are sales increasing as expected? Are people buying the options or choosing to buy single doughnuts? Do the end of day low prices help sell all the remaining doughnuts? Have too many changes been implemented at once, which is making it too difficult to determine the success of each change?
It could be worth acquiring customer feedback regarding the doughnuts and the changes implemented. The information acquired from the surveys could be used to make further changes or reverse some of the ones that are not working.
It is also a possibility that the changes could take some time to effect customer’s decisions. Therefore, waiting and observing might be the best course of action before declaring that the changes are a failure.
Scenario Question 1: Going Grocery Shopping
You are in-charge of getting the weekly grocery shopping for your family. Your family consists of 5 people. They are yourself, Mack (your husband), Dominic (12-year-old son), Isabella (8-year-old daughter), and Angus (your father). Both you and Mack work 5 days a week. Your children attend school 5 days a week. You take the children to school Monday and Wednesday and pick them up on Wednesday and Friday. The other days they take the school bus. Angus stays at home 7 days a week but goes to Bingo every Wednesday night and on that day eats with his friend Seumas. Mack likes to eat lunch with his work colleagues 3 times a week.
There are four supermarkets, and a produce market in your area. The map below provides information regarding locations.
Map of local Area
Supermarket A sells branded high quality food but at a high price. Supermarket A is the only supermarket that sells Dominic’s favourite breakfast cereal and Mack’s favourite double thick patties. This supermarket has limited fresh produce. Supermarket A is 5 minutes away by car.
Supermarket B is a budget supermarket that sells affordable non-branded food. The supermarket sells most of what the family needs but does not stock a few of the family member’s favourite items. This supermarket has no fresh produce. Supermarket B is 10 minutes away by car.
Supermarket C is the largest supermarket. It sells both branded and non-branded food. The prices are lower than Supermarket A but higher than Supermarket B. Supermarket C has a good choice of produce. The produce market is next to Supermarket C and sells the highest quality fresh produce. Supermarket C is 15 minutes away by car. Supermarket C also has an option to order food online. There is a delivery charge of $10 per order.
Supermarket D is a small local supermarket. It only sells a few items and prices are in line with Supermarket C. Supermarket D is the only supermarket that sells Angus’s favourite ‘homemade’ muffins. Supermarket D is 10 minutes away by car.
Cost of a week’s shopping at Supermarket A is $500 (includes some produce). Dominic’s cereal costs $5 per packet and Mack’s patties cost $10 per pack.
Cost of a week’s shopping at Supermarket B is $300 (this does not include produce)
Cost of a week’s shopping at Supermarket C is $380 and $420 (with produce).
Cost of a week’s shopping at Supermarket D is $200 (includes only half of required items). Angus’s favourite muffins cost $2.
Cost of week’s produce from produce market is $50 or $20 if some produce has been bought from Supermarket A.
Selecting your shopping and waiting at the checkout counter takes approximately 45 minutes for Supermarkets A, B, and C. Supermarket D takes just 15 minutes.
You have a weekly budget of $500 for grocery shopping. You have 2 hours available for shopping on both Saturday and Sunday. You also have an additional 1 hour on Wednesdays. You do not particular enjoy grocery shopping but you quite like shopping for other things. The Shopping Centre has several shops you like to visit and they have sales on alternate Wednesdays.
How would go about the weekly grocery shopping for your family? You need to be able to stay within the budget. Try to keep as many family members as happy as possible. Stay with the allocated time for shopping. Also, consider your own enjoyment as well as the cost of convenience to yourself.
Scenario Question 2: What shall we fix?
You are the new mayor of a town (Baymound). The previous mayor left Baymound with a number of problems. You need to decide which problems to address first. Below is a map of the town of Baymound.
Map of Baymound
The aspects of the town that pose potential problems are described below.
Transport
Baymound has a loop bus service that runs every hour from 8am to 6pm Monday to Friday. There are no buses at the weekend. Residents in your town are unhappy with the infrequent service and that there are no services on weekends.
Schools
Baymound has one primary school and no high school. The nearest high school is in the next town (Hibby), which is 30 minutes away. The primary school has plenty of capacity with an average 1 teacher to every 8 children. The high school in Hibby is overcrowded. The town of Hibby are unhappy about catering for the children of Baymound. They are strongly considering banning them.
Healthcare
Baymound has one clinic and no hospitals. The clinic staffs only three doctors at a time. Patients are required to make appointments a week in advance. The clinic does not accept walk in patients. The town of Hibby has a clinic that caters for emergency cases but is often very crowded. The nearest hospital is in Monkey Town. This hospital is 3 hours away. The Monkey Town hospital can adequately provide for patients on arrival but is not practical for emergency cases because of the distance.
Crime
Baymound has one small police station with two police officers on duty at all times. The crime rate in Baymound is very low. There is only an average of 3 arrests a month. These are normally for small offences such as rowdy behaviour or minor vandalism. Some residents are afraid that Baymound is ill equipped to handle crime with such a small police force.
Entertainment
Baymound has an entertainment centre. The entertainment centre has 2 cinemas, a theatre, a bowling alley, 2 food courts, ice skating rink, laser tag, jungle activity centre and 2 game arcades. The residents love the entertainment centre but they wish they could also have a sports stadium.
Shopping
Baymound has a large shopping centre. The shopping centre has supermarkets, department stores, boutique shops, cafes, hardware shops, and electronic shops. Baymound also has a smaller shopping centre and several shops off the street. The wide variety of shops in Baymound attracts people from several of the neighbouring towns.
Housing
Baymound has three distinct residential areas. Most of the houses are old and in poor condition, some of them are abandoned. The houses are mostly semi-detached two-level houses. Baymound has no apartments. The population of Baymound has been falling slightly over the past 5 years because of the lack of quality housing.
Jobs
Baymound has more jobs than residents. Most people living in Baymound work in Baymound. People living in Hibby fill a quarter of the jobs in Baymound.
Environment
Baymound has a clean business and shopping district but the two northern residential areas are very dirty. Baymound has two parks. One park is located opposite the hotel. This park has been beautifully laid out. The paths are lined with flowers; there is a large fountain and a large statute of the former mayor. The other park is located behind the primary school. This park is very large but is very poorly maintained.
Budget
You have been given a budget of $200 Million to upgrade the town. Below are the costs of some possible upgrades to the town.
| Project | Small ($M) | Medium ($M) | Large ($M) |
|---|---|---|---|
| Secondary School | 10 | 30 | 50 |
| Airport | 100 | 200 | 500 |
| Train | 80 | 150 | 400 |
| Hospital | 50 | 100 | 200 |
| Housing Project | 20 | 40 | 60 |
| Police Station | 10 | 20 | 40 |
| Sports Stadium | 40 | 80 | 140 |
| Park Upgrade | 5 | 10 | 15 |
| Clinic | 10 | 20 | 40 |
| Shopping Centre | 40 | 80 | 120 |
| Factory | 30 | 50 | 100 |
| Hotel | 80 | 120 | 160 |
| Car Park | 5 | 10 | 15 |
| Demolish Buildings | 5 | 10 | 15 |
| Bank | 20 | 40 | 60 |
| Bus Service | 10 | 20 | 30 |
| Prison | 60 | 100 | 150 |
| Office Buildings | 20 | 50 | 80 |
| Non-Infrastructure Policy | 5 | 10 | 15 |
With the information provided in this question, suggest the changes that you would make to the town. List the changes in order of importance. State what you expect will happen once the changes have been implemented. State what potential problems you could face with the changes that you have suggested. State what you would do, if anything, to reduce the effect of the problems. State which problems you have not addressed and why you did not address them. State which remaining problems you will address if more money becomes available.
END OF COURSE
More posts
If you want to read any of my other posts, you can click on the links below. These links will lead you to posts containing my collection of works. These 'Collection of Works' posts have been updated to contain links to the Hive versions of my posts.
Hive: Future of Social Media
Spectrumecons on the Hive blockchain
This is really true because it is what we experience everyday in our daily lives and economics can never be excluded. Thanks for sharing
Economics is something that people apply (correctly or incorrectly) on a daily basis without really thinking about it.
The need for economics in our daily lives and knowing where to put it in use or improve our approach in how we do something is vital and the importance need to be emphasised
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Applying economics can definitely help improve our decision-making process. It can enable us to determine what we value and how we can obtain that value.
Very true and how we can maximise it and know if its worth it or not. It's strongly a foundation to a lot of meaningful ventures and actions.Thank you
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Hope you don't mind, I gave this a re-blog. I think everyone should have a sound base in economics - I read the newspaper every day - tending to flick through the news (we watch it nightly, so often it's just a repeat) and find a lot more interest in the business section. Good on you for putting this course together.
As a tangent, in the past I have signed up for free online courses with such good intentions - and with enough belief in my own diligence to get through them, but time eats away at the opportunity. To get even 1 person through the course speaks volumes about it.
Tim
Great you gave it a re-blog, any extra exposure is good. Taking courses can be time consuming. This one is not particularly long (roughly 4 hours). However, digesting content and practicing with questions takes time and commitment.
Hi, I came across your post today. If I'm going to finish the course thoroughly, I'm going to need a lot of time, I reasoned. I can't help but think that it would be great if there was something like a certificate or badge for anyone who actually completed the course. Is the course fundamental economy knowledge that few people have mastered? As a result, they should be certified for having learned economics through a four-hour udemy-certified course. or should it be hive certified courses because it is enrolled in hive blockchain? The proof of having completed a four-hour economics course would change someone's opinion about the subject from educated to uneducated. Anyway, this is just my opinion.
That's a good idea. Udemy give out certificates for paid course but not free ones. Hive is not set-up for courses. It would be great if someone created a Udemy equivalent for Hive. Hive has the capability to hold such a DApp but we may still lack the number of users.
But someone had to start it. There's already community like hive learn and proof of brain.