Assignment week 1 - Chapter 1 1- (Rational Self-Interest)...

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Chapter 1 1- (Rational Self-Interest ) Discuss the impact of rational self-interest on each of the following decisions: a. Whether to attend college full time or enter the workforce full time ANSWER: (a) rational self-interest means that each individual tries to maximize the expected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit. Rational self interest guides individual choice and here the choice depends on the situation of the individual whether he/she wants to got for education full time or to join the workforce full time. b. Whether to buy a new textbook or a used one ANSWER: (b) Same is the case here also. Rational self interest guides individual choice and here the choice depends on the situation of the individual whether he/she wants to go for the new book or to adjust with the old but readable book. 2- ( Resources ) To which category of resources does each of the following belong? a. A taxicab
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mobility leading to reduced transport costs and better access to better/cheaper services); also maintenance. b. Computer software ANSWER: As above, except it might be more peripheral as people won't decide whether to use the company based on what kind/condition it is in; also won't need maintenance. c. One hour of legal counsel ANSWER: Service that will insure against potential losses (if the counsel prevents you doing something illegal) /provide an income stream (if s/he tells you about a tax loophole) / damage control (if someone sues). d. A parking lot ANSWER: Rental property that will generate income with management. 3- (
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This note was uploaded on 12/04/2011 for the course ECONOMICS 201 taught by Professor Rcollier during the Spring '10 term at Portland CC.

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Assignment week 1 - Chapter 1 1- (Rational Self-Interest)...

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