You purchase a $30, nonrefundable ticket to a play at a local theater. Ten minutes into the show you realize that it is not a very good show and place only a $10 value on seeing the remainder of the show. Alternatively you could leave the theater and go home and watch TV or read a book. You place an $8 value on watching TV and a $6 value on reading a book.
A)You should leave the theater since the net benefit from seeing the remainder of the show is -$20, while going home will earn you at least $8 of satisfaction.
B)You should stay and watch the remainder of the show.
C)You should go home and watch TV.
D)You should go home and read a book.

Question

Quizplus · Accepted Answer

The $30 ticket is a sunk cost and should not affect the decision. The value of staying is $10, which is higher than the value of watching TV ($8) or reading a book ($6).

You Purchase a $30, Nonrefundable Ticket to a Play at a Local