George spends $2,000 for a plane ticket to Vancouver and gives up $500 because he has to take time off work. He spends $1,500 on his hotel room. In Vancouver, George is trying to decide whether he should spend $1,000 to take a side trip to go snowboarding in Whistler or just snooze in the hotel. Going to Whistler would be a smart decision as long as his benefits from the side trip are at least

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For George, the decision to go snowboarding in Whistler should be based on whether the benefits outweigh the costs. The cost of the side trip is $1,000, so as long as the benefits are at least $1,000, it would be a smart decision. The other expenses (plane ticket, lost wages, and hotel room) are sunk costs and should not factor into this decision.

George Spends $2,000 for a Plane Ticket to Vancouver and Gives