Suppose You Pre-Ordered a Non-Refundable Movie Ticket to Avengers: Infinity

question 226

Multiple Choice

Suppose you pre-ordered a non-refundable movie ticket to Avengers: Infinity War. 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) Since you do not want to go to the movie and the cost of the movie ticket is a sunk cost, how much you paid for the ticket should not influence your decision.
• 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) You should go to the movie to maximize your utility.

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Definitions:

Rental Expense

Rental Expense refers to the cost incurred for renting a property or equipment, categorized as an operating expense in financial accounting.

Square Feet

A measure of area used primarily in the United States, equivalent to the area of a square with sides one foot in length.

Advertising Cost

The expense incurred by a business to promote its products, services, or brand through various media channels.

Allocation Bases

Criteria or methods used for allocating costs in budgeting or accounting, often based on time, output, sales, or square footage.