Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 1, Problem 9DQ
To determine
Explain the importance of thinking margin to make a good decision.
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- Buying and selling textbooks are two separate decisions made at the margin. Textbooks create value both when they are bought and when they are sold. Think about your decision to buy the textbook for this course. You paid $200 for the book, but you would have been willing to pay $450 to use the book for the semester. Suppose that at the end of the semester you could keep your textbook or sell it back to the bookstore. Once you have completed the course, the book is worth only $70 to you. The bookstore will pay you 50% of the original $200.arrow_forwardBuying and selling textbooks are two separate decisions made at the margin. Textbooks create value both when they are bought and when they are sold.Think about your decision to buy the textbook for this course. You paid $200 for the book, but you would have been willing to pay $450 to use the book for the semester. Suppose that at the end of the semester you could keep your textbook or sell it back to the bookstore. Once you have completed the course, the book is worth only $70 to you. The bookstore will pay you 50% of the original $200.How much total value have you gained? $arrow_forwardBuying and selling textbooks are two separate decisions made at the margin. Textbooks create value both when they are bought and when they are sold. Think about your decision to buy the textbook for this course. You paid $225 for the book, but you would have been willing to pay $500 to use the book for the semester. Suppose that at the end of the semester you could keep your textbook or sell it back to the bookstore. Once you have completed the course, the book is worth only $50 to you. The bookstore will pay you 50% of the original $225. How much total value have you gained? $arrow_forward
- Describe two decision-making traps identified in Chapter 11 of your text that affected important choices you have made in your lifearrow_forwardThe illusion of pattern shapes our everyday lives. How does this illusion emerge (refer to law of small numbers & impossibility of causal explanations) and how does it affect decision-making?arrow_forwardWhich of the choices is correct and please let me know why that is.arrow_forward
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