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EC 101.docx - EC 101, Assignment 2- Chapters 1 And 2...

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EC 101, Assignment 2- Chapters 1 And 2Student NameInstitution
Question 1The opportunity cost of operating own accounting firmWorking at your own firm = $60,000Using own flat = $15,000Using own money = $10,000Total opportunity cost = $60,000 + $15,000 + $10,000= $85,000Question 2Post hoc fallacy describes an argument made as a result of illogic reasoning. For example,arguing that our badminton team was losing the game until I bought a new racket. Our team didnot lose the game since I got a lucky racket.Question 3Ceteris paribus implies a relationship between two variables while holding other factors constant.An increase in gasoline price will not have much effect on demand for cars since it is an inelasticproduct. However, applying the concept of ceteris paribus (all else equal), the increase ingasoline prices may result in a decrease in car demand.Question 4Inflation rate

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