Monica has purchased a $25 ticket to attend a concert on Friday evening.Subsequently,she is asked to go to dinner and dancing at no expense to her.If she uses cost-benefit analysis to choose between going to the concert and going on the date,she should
A) include only the entertainment value of the concert in the opportunity cost of going on the date.
B) include the cost of the ticket plus the entertainment value of the concert in the opportunity cost of going on the date.
C) include only the cost of the concert ticket in the opportunity cost of going on the date.
D) include neither the cost of the ticket nor the entertainment value of the concert in the opportunity cost of going on the date.
E) include the amount her date is likely to spend on dinner and dancing in the opportunity cost of going on the datE.

Question

Quizplus · Accepted Answer

The opportunity cost of going on the date is the value of the best alternative foregone, which in this case is the concert. Since Monica has already spent $25 on the ticket, this cost should not be considered in the opportunity cost of going on the date. Therefore, Monica should include only the entertainment value of the concert in the opportunity cost of going on the date, and compare it to the value of going on the date.

Monica Has Purchased a $25 Ticket to Attend a Concert