ECON 200 Lecture 11: End of Chapter 8, Beginning of Chapter 9
10 Oct 2015
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Econ 200 lecture 11: end of chapter 8, beginning of chapter 9. Chapter 8: sunk cost fallacy: individuals should ignore sunk costs often they don"t, undervaluating opportunity costs, implicit cost of ownership: individuals value items more when they own them, fungible: money is fungible! This means that it is easily substitutable: practice questions, you and some friends are going out in dc. You"ve just paid to get into a bar. Once inside, you get a call that more friends are at another bar, where there is another cover. She bought this artist"s paintings at modest price, before he became well known. One of the paintings is now worth million. Your professor has decided to keep the painting. When you ask the professor whether she would buy it now for million, she says she wouldn"t. Yes: chandra received a gift certificate that covers three salsa dance lessons.
