3.5 Explain the pitfalls in the following statements. a. People who like playing golf are more likely

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3.5 Explain the pitfalls in the following statements.

a. People who like playing golf are more likely to have a luxury car than people who do not play golf. Therefore, having a luxury car causes people to play golf.

b. Michael noted that when he buys new shares of a company’s stock, the stock price usually increases when he takes a shower after making the decision. Last night, Michael bought some shares of a stock and he quickly went home to take a shower and, as he expected, the stock price did increase. Obviously, the stock price increased because Michael took a shower.

c. Cindy is a high school student who is usually awake during her mathematics lectures. Her mother found out that sending her to tutorial classes for math resulted in a 20 percent increase in her grades. Based on this success, her mother decided to spend money to send Cindy to tutorial classes for all subjects so that Cindy’s academic performance would improve in all.

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Principles Of Microeconomics

ISBN: 9789813107342

12th Global Edition

Authors: Karl E. Case, Sharon E. Oster, Ray C. Fair

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