Suppose you pre-ordered a non-refundable movie ticket to X-Men: Days of Future Past.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 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.
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 minimise your losses.
D)You should go to the movie to maximise your utility.

Question

Quizplus · Accepted Answer

Since the cost of the movie ticket is a sunk cost, it should not influence your decision. The rational thing to do is to base your decision solely on whether you want to see the movie or not. Going to the movie just to avoid "wasting" the ticket or to minimize your losses would not be a rational decision. Similarly, going to the movie just to maximize your utility without considering your actual desire to see the movie would not be rational either.

Suppose You Pre-Ordered a Non-Refundable Movie Ticket to X-Men: Days