1. You work for a company that is unfortunately a bit unsophisticated, economically speaking. For each of the following initiatives, indicate the error(s).
   1. A new marketing strategy encourages all staff, in addition to performing their regular duties, to spend 20 minutes cold-calling potential new clients. The strategy was determined to be cost-free since the staff are already on salary and no new expenses are incurred.
   2. The factory manager pushes for purchase of a fifth metal-stamping machine, since the first and second machines substantially reduced expenses.
   3. A product manager suggests raising the price of the company's products by 4%, claiming that the product's popularity will ensure no reduction in sales.
   4. The accounting department is advocating against the use of using cash to purchase land for a new factory, and advocating for taking out a 5% loan instead. The loan ensures that there is no reduction of cash, which will translate to a more profitable quarterly report.

1. You are CEO of a U.S.-based paint manufacturing company, and the chief chemist approaches you with a new type of exterior (i.e., outdoor) paint that should be brighter and last longer than most paints currently on the market. You give her the go-ahead to begin production in November. At the end of the first quarter of the following year, your chief accountant complains that sales of the new paint are low, that consumers obviously prefer the older type of paint, and that production of the new type should stop immediately. What might be said in the chemist's defense?

1. Your HR director is planning on hiring his oafish nephew as head of security for your company. To quell your fears that the nephew may not be a good choice, the director says "He won't cost us very much; I've given him a salary offer that is quite low, and he accepted it." Even with a low salary, why might this choice be a bad one?

1. When I was an undergrad home for Christmas break, a high school friend and I visited a record store (if you're under age 30, Google it...) in our college town. In the store were posters protesting the local college's use of cheap foreign labor in producing the college's apparel. I asked the clerk about the posters, and he said that workers in these foreign factories get paid mere dollars per day, and that the college should stop exploiting them. After we determined that the foreign workers were not forced to work in these factories against their will, how do you think I (who had completed my first couple of economics classes) responded to him?