The course focuses on real-world examples, adhering to the principle of “Show me the money!” Jerry McQuire, a 1996 movie starring Tom Cruise (http://www.youtube.com/watch?v=OaiSHcHM0PA). As such, it is a fun exploration of decisions made by economic agents (e.g., consumers, companies, governments, parents and teachers) that we observe in our daily lives. Such decisions may at times appear irrational, even though they mirror rational thinking based on the theory of microeconomics. In so doing, it engages students to dissect problems that students may personally experience or see in newspapers and TV broadcasts. The course adopts a case-based approach commonly used in business schools worldwide, as exemplified by the following Q&A:
Q1: Why do triads operate bars that offer cheap drinks?
A1: While these bars may not make money from cheap drinks, they present good opportunities for member recruitment and drug sales, which can more than offset the loss due to below-cost alcohol sales.
Q2: Should the government stop the sale of counterfeit goods?
A2: No, because counterfeit goods can meet the demands of some consumers who desire brand names but cannot afford the genuine goods. So long as the counterfeit goods are known to these consumers, the government does not need to intervene. A case in point is the fake goods bought from Taoboa sellers.
Q3: Does a real estate agent always work in your interest?
A3: No, because a real estate agent can make more money by completing a transaction than trying to get you the best price for your property.
Q4: What should you say in a job interview?
A4: “I will deliver to make your business more successful”, not “I will work hard”. This is because hard work does not produce profitable or useful results.
Q5: Should you ever lend money to a friend?
A5: No, because the best outcome that you can hope for is that the friend will fully repay the loan without interest. The likely outcome, however, is that the friend will not make full repayment. Asking the friend to repay may only elicit a response like “I am your friend, don’t you trust me?” which may lead to a hot argument and loss of friendship.
As indicated by the above examples, the course is not about memorizing complicated formulae or concepts. It is instead about using economic thinking to gain a better understanding of decisions made by economic agents, including the students themselves.