Practice question · Multiple choice
You bought a 30€ cinema ticket (non-refundable). An hour before the film, a friend offers a free concert you’d enjoy much more. What does economics say?
Hints
- Can any tonight-decision bring the 30€ back?
- Compare only the futures: film versus concert, from this moment on.
Show the answer
A. Go to the concert, the 30€ is sunk either way
Why
The 30€ is gone in both futures, so it cancels out of the comparison. Only tonight’s enjoyment differs, and the concert wins. Honoring sunk costs is how people waste an evening to justify a banknote.
Practise Opportunity Cost
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- Sort each cost by its nature in the decision at hand.
- Match each decision to its most important opportunity cost.