Question
please answer question 6 !
acP the right econl un ught a $10 tic ught a $10 ticket in advance for a lacrosse ve bo 6. You ha s game, a ticke a ticket that cannot be resold. You know that going to the lacrosse game will give you a benefit equal to $20. After you have bought the ticket, vou hear that there will be a CFL football game at the same time. Tickets to the football game cost $20, and you know that going to the football game will give you a benefit equal to $35. You tell your friends the following: "If I had known about the football game before buying the ticket to the lacrosse game, I would have gone to the football game instead. But now that I already have the ticket to the lacrosse game, it's bet- ter for me to just go to the lacrosse game." Are you making the correct decision? Justify your answer by you calculating the benefits and costs of your decision.
Explanation / Answer
Yes, the decision is right. it is shown as follows:
If he goes for football game,
cost already incurred = $10
Cost yet to be incurred = $20
hence total cost involved = $30
Benefit = $35
Net benfit = $35-30 = $5
If he goes to lacroose game only, cost is $10
Benefit = $20
Net benefit = $10 (20-10)
Since net benefit is larger if he goes for lacrooose game, his decision is right.
Since benefit is still larger than total cost involved, he should go for Lacroose game