You Have Bought a $500 Ticket Package to Take All

question 21

Essay

You have bought a $500 ticket package to take all of your family to Sea World on the first weekend in June. Your spouse has free passes to an IMAX viewing of Jaws for the same day. The morning of your outing, you notice storm clouds coming in and the weatherman says that there is a 95% chance of rain and lightning. You think that it might make more sense to go to the IMAX showing, but you paid significantly more for Sea World. Where would you be more likely to go? Name this phenomenon and briefly describe the premise of this type of cognitive error.

---

Definitions:

Year-End Costs

Expenses or costs incurred by a business at the end of the fiscal year; these may include adjustments, accruals, and prep for financial reporting.

Inventory Cost Flow

An accounting method that determines the value of sold inventory and ending inventory, can be FIFO, LIFO, or Average Cost.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue. It represents the company's bottom line.