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Unformatted text preview: plates in the dining hall for the same pay, $40/day, and that the job was so unpleasant that you would be unwilling to do it for less than $25/day. Should you go skiing? There are two equivalent approaches to look at this decision . 3 Comparing the two approaches Approach I Approach II B(X)= 50 25 + B(X)= 50 C(X)= 30 + 40 C(X)= 30 (40 25) + B(X) - C(X) = 5 It makes no difference which of these two ways we handle the valuation of the unpleasantness of scraping plates. 1. Viewing the unpleasantness as the benefits we can get from going skiing because we can escape from scraping plates. 2. Viewing the unpleasantness of the plate-scraping job as an offset against its salary....
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This note was uploaded on 09/06/2010 for the course FBE ECON1001 taught by Professor Dr.demurger during the Fall '08 term at HKU.
- Fall '08