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Rick Finds a Great Internet Deal on an All-Inclusive Vacation

Question 32

Multiple Choice

Rick finds a great Internet deal on an all-inclusive vacation rental in the Bahamas for $1,200 and immediately pays a $1,000 nonrefundable deposit to reserve the trip. He later learns that the dates for the trip are right in the middle of hurricane season, when the weather is likely to be gloomy and potentially dangerous. Rick decides he cannot waste the $1,000 he has already paid and takes the trip anyway. While sitting in the rain, miserable, Rick realizes that:


A) he fell victim to the sunk cost fallacy and should have ignored the fact that the $1,000 was gone.
B) he fell victim to the implicit cost fallacy and should have ignored the fact that the $1,000 was gone.
C) he fell victim to the fungibility fallacy and should not have gone on the trip.
D) going on the trip was a utility minimizing experience.

Correct Answer:

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