PSCh001 - NAME DATE Give the best answer to each of the...

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NAME : ________________________________________ DATE : ____ / ____ / ____ CHAPTER ONE PROBLEM SET Give the best answer to each of the following questions. 1. Briefly point out the faulty reasoning in each of the following situations: a. You win a free, nontransferable ticket to a Sheryl Crow concert. Since the ticket is free and it will therefore cost you nothing to go, you decide to go to the concert. b. You paid nonrefundable tuition of $3,000 to take a 15-week course. Therefore, the opportunity cost of attending class each week is $3,000 divided by 15, or $200. c. You like to avoid costs; every decision involves opportunity cost. So you don’t make decisions. d. You have purchased 5 premium apples for $1.99 a pound, but when you get home, you discover they are mushy. Since you paid top dollar for these apples, you decide you have to eat them. 2. Classify the following Wall Street Journal articles as involving macroeconomic or microeconomic issues based on their titles: a. “Bernanke Sees Long Slog to Trim U.S. Trade Deficit” b.
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