You go to see a movie that you believe would turn out to be amazing. The ticket costs you $20 . Once in the theatre you realize that the movie is awful. If you leave now, you can still catch your favorite TV show. What should you do?
a. Stay and watch the movie since you paid $20 for it
b. The ticket price is now a sunk cost, you can ignore it and go home
c. Stay and watch the movie since the opportunity cost of the movie is zero
d. None of the above
b
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A price ceiling leads to a(n) ________ if below equilibrium price
A) increase in social well-being B) increase in producer surplus C) decrease in market demand D) decrease in total surplus
Lewis has $5,000 worth of bonds in Farrell’s Seed Company. Bonnie has 10,000 shares of preferred stock in the company, Jeff has 100,000 shares of common stock, and Val has 1 share of common stock. If Farrell’s Seed Company goes out of business, which obligation will it be required to meet first?
a. paying Bonnie the full value of her preferred stock b. paying Jeff the dividends on his common stock c. paying Lewis the full value of his bonds d. paying Val the full value for her share of common stock