Jack Has a Ticket to See Daughtry for Which He

question 128

Multiple Choice

Jack has a ticket to see Daughtry for which he paid $30 yesterday. He takes an unpaid day off from work to get ready for the concert. When he arrives at the concert, five different people offer him $70 for his ticket. Jack decides to keep his ticket. At the time he makes this decision, his opportunity cost of seeing Daughtry is:

• A) $30 plus his forgone earnings.
• B) $40.
• C) $70.
• D) $70 plus his forgone earnings.

---

Definitions:

Financial Economists

Specialists who study the ways in which money, financial instruments, and financial markets influence the economy.

Portfolio Management

The science and art of making decisions about investment mix and policy, matching investments to objectives, asset allocation, and balancing risk against performance.

Rate of Return

The percentage of profit or loss on an investment over a specified period of time.

Framing Effect

The cognitive bias where people decide on options based on whether they are presented in a positive or negative way.