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Unformatted text preview: across town? How much would someone have to pay you to drive across town? Chapter 1: Thinking Like an Economist Slide 11 Four Important Decision Pitfalls Pitfall 1: Measuring cost and benefits as proportions rather than absolute dollar amounts. z Examples Would you drive across town to save $10 on a $20 DVD? To save $10 on a $2,020 laptop computer? Which is more valuable, saving $100 on a $2,000 plane ticket to Tokyo or saving $90 on a $200 plane ticket to Chicago? Chapter 1: Thinking Like an Economist Slide 12 Four Important Decision Pitfalls Pitfall 2: Ignoring Opportunity Costs z Example: Should you go to graduate school? What are the costs? What is the next best alternative?...
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This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.
- Spring '08