Thinking Like an Economist

In: Business and Management

Submitted By deusareis
Words 1414
Pages 6
Chapter 1
Thinking Like an Economist

Answers to text questions and problems

Answers to Review Questions
1. Your friend probably means that the benefits from private solo lessons are greater (your tennis game will improve faster) than if you take group lessons. But private lessons are also more costly than group lessons. So those people who don’t care that much about how rapidly they improve may do better to take group lessons and spend what they save on other things.
(LO2)
AACSB: Analytic
Bloom’s: Analyze

2. False. According to the Cost-Benefit Principle, your willingness to make the trip should depend only on whether $30 is more or less than the cost of driving downtown.
(LO4)
AACSB: Analytic
Bloom’s: Analyze

3. Because the price of a movie ticket is a cost the patron must pay explicitly, it tends to be more noticeable than the money that she would fail to earn by seeing the movie. As Sherlock Holmes recognized, it’s easier to notice that a dog has barked than that it has failed to bark.
(LO5)
AACSB: Analytic
Bloom’s: Analyze

4. Using a frequent flyer coupon for one trip usually means not having one available to use for another. By thinking of frequent-flyer travel as free, people fail to consider the opportunity cost of using the coupon, thereby making wasteful travel decisions.
(LO2)
AACSB: Analytic
Bloom’s: Analyze

5. Your tuition payment is a sunk cost as long as it is non-refundable, since the payment cannot be recovered even if you drop out of school. If the payment is refundable until a certain date, it is not a sunk cost until after that date.
(LO6)
AACSB: Analytic
Bloom’s: Analyze

Answers to Problems

1. The economic surplus from washing your dirty car is the benefit you receive from doing so ($6) minus your cost of doing the job ($3.50), or $2.50.
(LO2)
AACSB: Analytic
Bloom’s: Analyze

2. The…...

Similar Documents

Like a Boss

...unaware of thejoka joka joka “Imagine . . a textbook joka joka joka joka joka joka joka joka joka jokafar-less-than-perfect students. So I am nojoka joka joka joka joka joka joka joka joka joka joka joka joka joka joka joka nature students—in fact was one of those joka joka joka joka an instructor who taught at Purdue, joka joka joka joka joka joka joka That comment, from joka joka joka jokaasjoka jokatojoka joka joka jokarealist, who joka joka joka joka utopian; I am a that most students was e-mailed to I was struggling write the prefjoka joka jokaearlierme joka joka joka joka joka joka jokaanrecognizesjoka joka joka could care less about how joka economist thinks, and even ace to an edition. Thatjoka still captures joka joka joka joka joka joka joka joka joka joka ajoka joka joka joka joka joka comment joka less about how modern economist thinks. They are joka joka joka joka the most distinctivejoka of my joka joka joka joka joka joka joka what I believe to be feature joka joka joka always feltjoka jokastudents read in jokathe course because itjoka joka joka joka joka is required, because their parbook. I’ve joka joka books joka joka taking that joka joka joka jokaspeak to thejoka joka joka joka joka joka joka joka what fit injoka ents told them they had to, or because it was joka their coursesjoka joka joka joka joka should them and be as enjoyable as joka joka joka joka joka joka joka joka joka jokaThat is the jokaand they are the stu-joka joka reality, their schedule.......

Words: 292844 - Pages: 1172

Thinking Like an Economist

...5 Reasons Why a Professional Business Place Is Important Posted on February 10, 2010 by corporateofficecenters With today’s technology options, it is very easy for many to enjoy the telecommuting benefits of working at home. However, even with the latest tools and technology, there are still some important factors to consider if you are lacking a professional workplace. 1. Professional Image -  A physical business address versus a home address or Post Office box is important to your customers’ perception in determining if they believe you are a reliable business. It may not be important if you deliver exceptional products and services, however, you may miss the opportunity to show them if you do not present a professional, credible image in the beginning. 2. Distractions – The distractions of a home office (barking dogs, kids, chores, spouses) can throw your concentration and productivity off course quickly, not to mention the reflection on your business if these noises can be heard in the background of an important call. 3. Meetings – A professional place to meet your clients and colleagues improves your image and shows you are serious about your business. It also ensures that the privacy of your negotiations and discussions is protected and eliminates the distractions and interruptions of a meeting in a public venue or a home environment. 4. Privacy – Personal privacy regarding your home address is important so you do not have uninvited visitors showing up at your......

Words: 368 - Pages: 2

Economist - 2009 - Battle of the Clouds

...The Economist, 10/17/2009 ------------------------------------------------- Battle of the clouds The fight to dominate cloud computing will increase competition and innovation THERE is nothing the computer industry likes better than a big new idea--followed by a big fight, as different firms compete to exploit it. "Cloudcomputing" is the latest example, and companies large and small are already joining the fray. The idea is that computing will increasingly be delivered as a service, over the internet, from vast warehouses of shared machines. Documents, e-mails and other data will be stored online, or "in the cloud", making them accessible from any PC or mobile device. Many things work this way already, from e-mail and photo albums to calendars and shared documents. This represents a big shift. If you store more and more things online, and access more and more software through an ordinary web browser, it suddenly matters much less what sort of computer you have, and what kind of software it is running. This means Microsoft, which launches the newest version of its Windows operating system this month, could lose out--unless, that is, the software giant can encourage software developers and users to migrate to its new suite of cloud-based services. Its main rival is Google, which offers its own range of such services, and continues to launch new ones and interlink them more closely. Yahoo!, which is allied with Microsoft, and Apple also offer cloud services for......

Words: 1134 - Pages: 5

The Undercover Economist

...Each of the ten chapters in The Undercover Economist presents concrete real-world examples and uses simple economic principles to explain some of underlying mechanics of our often baffling world. 1. Who Pays for Your Coffee?: Introducing the concepts of scarcity and bargaining power, we learn that the premium price we pay for coffee on our morning commute to work has nothing to do with the quality of the coffee and everything to do with location, location, location 2. What Supermarkets Don't Want You to Know: In a discussion on price-targeting policies, we see that the difference between Whole Foods Market and Safeway has very little to do with the relative price of goods and a lot to do with who the shoppers are. 3. Perfect Markets and the ‘World of Truth’: What does truth mean in economic terms and how does it lead to perfect market efficiency? We see where efficiency is good, where it may fall short, and why it’s not always fair. 4. Crosstown Traffic: Introducing 'externalities' and how they help deal with some of the major blights on our society: pollution, congestion, and fights with neighbours. 5. The Inside Story: George Akerlof's revolutionary 1970 paper reveals how inside information dramatically affects markets and why this means it’s virtually impossible to buy a decent second hand car. 6. Rational Insanity: A paradox: economists study rational behaviour, but the more rational the behaviour of stock market investors, the more erratic the behaviour of the......

Words: 465 - Pages: 2

The Economist

...look over the border. From darkness, dawn After years of underachievement and rising violence, Mexico is at last beginning to realise its potential, says Tom Wainwright Nov 24th 2012 | from the print edition THE APOCALYPSE WAS on its way, and it would begin in Mexico. Where else? When archaeologists dug up Mayan calendars that ominously seemed to run out in the final days of 2012, some doomsayers predicted the end of the world. To many Mexicans it seemed like just another example of their country’s unending run of bad luck. The steepest recession on the American mainland, a plague of H1N1 swine flu and a deepening war against organised crime had made the preceding few years fairly grim. In 2009 the Pentagon had given warning that Mexico could become a “failed state”. Armageddon would be the icing on the cake. But it turns out that the Mayan glyphs were misunderstood. The men with magnifying glasses now say that the world is not about to end—in fact, it seems that the Mayans were predicting something more like a renewal or a fresh start. Could the same be true of Mexico? This special report will argue that there is a good chance of it. Some awful years are giving way to what, if managed properly, could be a prosperous period for Latin America’s second-largest economy. Big, irreversible trends, from a falling birth rate at home to rising wages in China, are starting to move in Mexico’s favour. At the same time the country’s leaders are at last starting to tackle some......

Words: 13319 - Pages: 54

Thinking Like Economist

...There are _ Roles an _ plays2, Economist Economist Role #1:As a Scientist Economist Role #2:As a Policy Advisor How is an Economist and a Scientist alike?They work together to EXPLAIN the world. How is an Economist and a Policy Advisor alike?They work together to IMPROVE the world. What method do both Economists and Scientists use to explain the World?The Scientific Method; through Observation, Theory and more Observation. What are Assumptions?Statements that help simplify the complex world, making it easier to interpret and understand. What are Models?Simplified representations Economists use to help understand the complex reality. The Production Possibilities Frontier and Circular Flow Diagram are:The Main models Economists use to portray and represent the Closed Economy. The Circular Flow Diagram contains 2 Actors (Decision Makers):1) Households 2) Firms The Circular Flow Diagram contains 2 Markets:1) Goods and Services 2) Factors of Production What are the roles of Firms?PRODUCE Goods and Services, Using Inputs: Labour, Land from Natural Resources and Capital such as buildings and machines. The Inputs that the Firms use from are also called:The Factors of Production, Raw Materials, from Resources What roles do the Households play?They OWN the Factors of Production, and CONSUME the Goods and Serviced produced by the Firms. What is "special" about the Households?They have the ability to CONTROL and OWN every single......

Words: 673 - Pages: 3

Like

...Composition 1 October 4, 2013 Like People especially teenagers create new words everyday and use existing words in different context. The latter can be attributed to teenagers who also use existing words such as “like” in different context. Patricia T O’Conner former editor of The New York Times, author of five books about the English language and writer of the article on language “Like”, states that the word like is the “New Say” and that “I’ve always believed that young people are capable of knowing when to use formal versus informal, written versus spoken English’’ (para.19). This essay will be supporting O’Conner’s Statement using evidence and examples from her article. Throughout O’Connor article “Like” she shows how teenagers now use the word in different contexts, such as quoting, paraphrasing, emphasis, summarizing the inner thoughts of the quoter or quotee, introducing an actual quote as well as attitudes gestures, sarcasm and irony. This is accredited to only teenagers, this is not so as, O’Connor further states that “parent might be using like this way without even realizing it”, she confesses that her husband caught her in the act only the other day he was “like, did you hear what you just said?” (para.20). Linguists call it the”quotative like” (para. 2). Temple University Linguistics professor also known as “Ms. Adjective Muffy E.A Siegel researched the mysteries of like in her article, published in the Journal of Semantics “Like: The Discourse Particle......

Words: 807 - Pages: 4

How Economists Think

...ECONOMICS _____________________________________________________________________________________ WEEK 1: HOW ECONOMISTS THINK * What are preferences? Preferences refer to all of the objectives an individual wants to achieve that might motivate a choice among a set of alternatives. * What does it mean for an individual’s preferences to be rational? Please explain the concepts of costs and benefits and the reasoning process used by a rational individual. A rational individual will try to make the best possible use of his/her scarce resources, usually choosing an activity that has the highest utility. Rational preferences possess 2 properties, which are completeness and transitivity. Completeness means that choices can be ranked in an order of preference. For instance, an individual will have a preference when faced with two choices. Transitivity means actions can be compared with other actions. As an example, if action a is preferred to b, and action b is preferred to c, then a is preferred to c. A benefit is the maximum unit of currency amount you would be willing to pay to do x, while the cost is the value of all the resources you must give up in order to do x. The cost-benefit approach to decisions states that an individual should do an activity x if the benefit exceeds the cost. Relating to cost, in the process of coming up with a decision, a rational individual will take into account opportunity costs and ignore sunk costs. * New theories argue......

Words: 22938 - Pages: 92

The Economist Assignment

...Fernando Mata General Management March 8th, 2015 Assignment The Economist - Written Assignment 1. Why has The Economist been so successful despite the terrible results of its competitors? The Economist has been able to succeed for different reasons. One of them has been the increase number in its target audience. The market's increase demand for sophisticated and challenging information has led this magazine to increase its subscribers and readers throughout the globe. Another reason, and perhaps the most important, is that they provide high quality analysis and straight to the point articles & news, which provide the reader a faster and easier way of going through and digesting information. The Economist has also been focused on providing a wide range of topics, not only news & articles surrounding on one aspect, such as politics and business, but also about cultural and innovative topics, that provide a global focus about what's currently going on around in different countries. Throughout the years this magazine has positioned itself as a reliable source of information that people trust. Thus, many readers and subscribers have a higher income and education than the average magazine consumer, which enables customers to keep subscribed even at economic crisis times. As well as taking into consideration that an economic crisis would be a relevant topic to learn and read about (causes, consequences, impact, etc.) in a magazine of this type. People are willing to pay for......

Words: 986 - Pages: 4

Like

...Professor Elana Zilberg Winter 2016 Assignment #2: Spatial Analysis Due: Monday, February 29th by Noon Part Two: Ethnographic Site and Subject In this assignment you are asked to transform your stereotype from an image into an ethnographic subject. Take your stereotype “off the screen” or page and locate it as a body in a particular site. Drawing on the spatial analysis vocabulary covered in this section of the course, describe this site. Your site can be rural or urban, inner city neighborhood or suburb, a building (house, mall, corporate or government office building, etc.), a street, a park or beach and so forth. However, the site you choose must but be a physical space (do not use the Internet as a site). You are not only thinking about the physical space itself, but your subject’s relationship to that space. Therefore, the ethnographic site will depend on your ethnographic subject. These are some of the questions to consider in developing your essay: * How does your ethnographic subject use, appropriate, and shape the space? * Using Lefebvre’s concept of the “spatial triad,” how do you understand your site as a representation of space, a space of representation, or created through spatial practices? * How would you characterize the topography of the built environment of the site? * What macro and micro forces produce that space? * How is the site legislated or policed? * What are the dominant and resistant spatial discourses about......

Words: 663 - Pages: 3

Like

...experience as a VITA Volunteer allows MSU students to engage with clients in a professional setting and to become high-quality tax preparers. Read more at vita.msu.edu. To receive H-Option course credit in ACC 331, students must complete the following:  Completion of Service-Learning Honors Option: Agreement Form (on D2L website)  Attend all required MSU VITA volunteer training sessions  Obtain Tax Preparer certification from the Internal Revenue Service (available online)  Serve 2 hours per week throughout the tax season, which takes place February 1- April 15, 2016, for a total of approximately 16 hours.  Submit a reflection essay on their experience in the VITA program, connection to course content and skills developed (critical thinking, communication, leadership). Accommodation Requests Michigan State University is committed to providing equal opportunity for participation in all programs, services, and activities. Requests for accommodations by persons with disabilities may be made by contacting the Resource Center for Persons with Disabilities at 517-884-RCPD or on the web at rcpd.msu.edu. Once your eligibility for an accommodation has been determined, you will be issued a verified individual services accommodation (“VISA”) form. Please present this form to me during the first two weeks of the term. Requests received after this date will be honored whenever possible. Academic Honesty As an upper-level accounting student, you should......

Words: 2938 - Pages: 12

Economist

...Gambling: Reality versus Game Gambling. An activity that involves risk and risk taking. In Don Delillo’s Falling Man novel, Keith is a broken man who gets over the haunting, shocking, and nerve numbing events he experienced on the day of the 9/11 attack. He recounts these events vaguely and distantly, thinking about them in his head as if they weren’t especially important or relevant to him. He acts as a bystander to his own experience and looks onto his experience as if he was a third party observer. Keith’s nature to do this extends to his obsessively strong inclination and urge to play poker. In order to avoid the events of reality, Keith numbs himself by separating his conscious in the real world and teleporting it into the gambling world in which he can concentrate on the virtual world of gambling. Gambling plays a crucial role in Delillo’s novel by separating Keith’s identity in the real world and replacing it with an alternate identity in the game of poker. The first instance of the audience being introduced to Keith’s obsession with gambling is when Keith revisits his apartment building that is in danger of collapsing. The audience wonders why Keith is so desperate to get to the building, as he had to go through multiple layers of security guards and policemen, showing his ID and a fabricated story to gain sympathy, “there were cats he had to feed, three of them, and if they died his children would be devastated and he showed the splint on his arm.” (Delillo 24)......

Words: 1632 - Pages: 7

The Economist

...The Economist 本 PDF 由人人网《经济学人》翻译组提供翻译、整理 新浪微博请关注 http://weibo.com/tett 原文版权归经济学人集团所有 小组地址 http://xiaozu.renren.com/xiaozu/228064 主宰自己人生的秘诀在于求知与冒险,前者让你预见未来,后者让你掌控你所预见的未来。 鸣 组长:钮成拓 组长:胡伟凡 谢 翻译 A 组(一周时事 The world this week 文艺 Books and Arts) 组员:史心语 李雅婷 罗智 朱田牧 沈鱼 唐宇 熊朋迪 姚欣悦 翻译 B 组(财经 Finance & Economics 科技 Science & Technology) 组员:陈默 汤旭武 熊佳 黄文琦 王紫珊 徐莉钦 袁子葳 陈玉梅 许青 汤永永 翻译 C 组(精粹 Briefing 亚洲 Asia) 组长:贺鹏 组员:董董 王英莲 金婧华 杨婕 郑玮 闵昂 董平 苏秋秋 刘畅 杨畅 翻译 D 组(商业 Business 社论 Leaders) 组长:卢爽 组员:程娟 曹宝平 张力 巩子笠 王同同 谢乙德 赵一蓉 管浩波 翻译 E 组(美国 United States 美洲 The Americas) 组长:程蒙 组员:慧子 孔德威 栾子越 裴静 郑恒 胡文玉 王思思 马绍博 李苏 翻译 F 组(中东与非洲 Middle East and Africa 国际 International) 组长:单李扬 组员:樊睿 沈骜 林冰洁 李小千 黄献禾 蔡丽艳 李骏 刘超 翻译 G 组(英国 Britain 欧洲 Europe) 组长:周薇薇 组员:徐文婕 周开文 郭伟华 战培良 郭爽 芳菲 柳杨 王征 李慧彗 郭心睿 李寅 罗丹 张亚玲 校对组 组长:尹茜 组员:李晓敏 任昊 汪楚航 胡心云 张诗玲 张理中 王晴 刘洋 杨舒雅 费凡 ——组员专访 没有赶上这周的小组会议, 但是也得服从组织安排啊。 这周的题目是政治和金融的结合体, 尽管不长, 也让我大费周章。 虽然嘴上说再也不要碰经济类的文章了,但是心里还是有种想要去正视自己软肋的冲动。每次都是拖拖拉拉直到最后,有时 候还要翻译到一点多,厚着脸皮向刘总、组长和校对组的同学们表示深深的歉意。 因为考研,我加入了这个小组,从当初看不得群里一片喧哗,气愤从网横行的河蟹,然后为分组纠结,再到后来认识了 好多朋友,成长的确是一件值得开心的事情。那么多伙伴祝我生日快乐,我一条一条看过去,留下了一个一边笑一边想哭的 扭曲表情。 今天刘总把人人小组对翻译团的超好评发出来了,今后也请各位继续多多努力,我们的目标还很远大呢! C 组-苏秋秋 2011.9.10 《经济学人》中英文对照版 2011 年 9 月 10 日刊 免费订阅地址:http://s8.hk/5vqm -1- 本刊旨在提供学习交流之用,请于下载后 24 小时内删除,我们鼓励购买正版! The Economist 本 周 政 治 要 闻 BY 史 心 语 &罗 智 本 周 商 业 要 闻 BY 唐 宇 &熊 朋 迪 本 PDF 由人人网《经济学人》翻译组提供翻译、整理 财 经 Finance & Economics 红币在国外 新浪微博请关注 http://weibo.com/tett 原文版权归经济学人集团所有 小组地址......

Words: 122696 - Pages: 491

Schumpeter: a Guide to Skiving | the Economist

...Schumpeter: A guide to skiving | The Economist 10/23/14, 3:56 PM Schumpeter A guide to skiving How to thrive at work with the minimum of effort Oct 25th 2014 | From the print edition THE best way to understand a system is to look at it from the point of view of people who want to subvert it. Sensible bosses try to view their companies through the eyes of corporate raiders. Serious-minded politicians make a point of putting themselves in their opponents’ shoes. The same is true of the world of work in general: the best way to understand a company’s “human resources” is not to consult the department that bears that ugly name but to study the basic principles of one of the world’s most popular, if unrecognised, sciences: skiving. The first principle of skiving (or shirking, as Americans call it) is always to appear hard at work. This is the ancient jacket-on-the-back-of-the-chair trick: leave a coat permanently on display so that a casual observer—a CEO practising “managing by walking around”, for example—will assume that you are the first to arrive and the last to leave. The skill of skiving is subtle: ensure you are somewhere else when the work is being allocated. Successful skivers never visibly shy away from work: confronted with the inevitable they make a point of looking extremely eager. This “theatre of enthusiasm” has fooled almost everyone. Policymakers bemoan the epidemic of overwork. But as Roland Paulsen, of Sweden’s Lund University,......

Words: 1149 - Pages: 5

Like

...will need to check that the minutes reflect what’s been agreed. If you are negotiating informally (i.e. outside of a committee meeting), you may want to ask the person you have negotiated with to send you an email confirming what has been agreed. SUMMARY • Know what THE STUDENTS want. Think through exactly what you want out of the negotiation- be specific and have valid reasons for why you need what you’re asking for. Knowing what you want, and why, will help you to be clearer and more confident. • Know what THE UNIVERSITY wants. Before you start negotiating, it's important to have an idea of what the University or your particular department would like the outcome to be, too. So think it through - why do they need what you're offering/asking for? And do your research - how can you make the University feel like they've got a good deal? • Be fair. If what you're asking for is fair and justifiable then you're much more likely to get what you want. Try and demonstrate how what you want is reasonable, and you're on the way to getting what you want. • Believe you're worth it. You have to believe that the students deserve the desired outcome. If you don't, the moment you are questioned about it, your argument will fall apart because you don't have enough confidence in it. Believe it, trust yourself - and rehearse it. • Listen carefully. When the other person is talking to you during negotiations, don't use that time to plan your next line of attack - it's......

Words: 1031 - Pages: 5