You purchase a $30, nonrefundable ticket to a play at a local theater. Ten minutes into the show you realize that it is not a very good show and place only a $10 value on seeing the remainder of the show. Alternatively you could leave the theater and go home and watch TV or read a book. You place an $8 value on watching TV and a $6 value on reading a book
a. You should leave the theater since the net benefit from seeing the remainder of the show is -$20, while going home will earn you at least $8 of satisfaction.
b. You should stay and watch the remainder of the show.
c. You should go home and watch TV.
d. You should go home and read a book.
b
You might also like to view...
Hikers frequently claim that livestock grazing in the Wilderness Recreation Areas reduces the satisfaction of their recreational hiking experience. What is the economic explanation for this conflict?
a) Ranchers are insensitive to the recreational use of public lands. b) Grazing cows is a profit-generating activity, but hiking is not. c) Grazing cows create negative externalities that make hiking less pleasant. d) Hikers do not value livestock as much as ranchers.
The long run aggregate supply curve is vertical because
A) a change in the level of prices will have no effect on real output in the long-run. B) the production possibilities curve is vertical. C) the aggregate demand curve is downward sloping. D) technology increases at a constant rate.