Suppose you pre-ordered a non-refundable movie ticket to X-Men: Apocalypse. On the day of the movie you decide that you would rather not go to the movie. According to economists, what is the rational thing to do?
A) You should go to the movie to maximize your utility.
B) You should not waste resources. Since you have paid for the ticket you should watch the movie.
C) Your should go to the movie to minimize your losses.
D) Since the cost of the movie ticket is a sunk cost, it should not influence your decision. Your decision should be based solely on whether you want to see the movie or not.
D
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The gains or benefits from trade are:
A) A result of more efficient resource utilization. B) based on different wage rates in different countries. C) greater when rich nations trade with poor nations. D) based on the principle of absolute advantage.
A singer would willingly perform in a concert for $10,000. If she is paid $25,000 for the concert, she is
A) receiving $25,000 to cover her opportunity cost. B) not being paid her full opportunity cost. C) receiving $15,000 of economic rent. D) certainly being paid more than warranted by the level of demand.