Suppose that you value a hat from your favorite university at $20. The university bookstore has the hat on sale for $15. You purchase the hat but lose it on the way home. What should you do? Assume that losing the hat does not alter how you value it.
A)Go back to the bookstore and purchase another hat.
B)Wait until the cost of the hat falls to $15 or less before purchasing another hat.
C)Wait until the cost of the hat falls to $5 or less before purchasing another hat.
D)Do not purchase another hat regardless of the price.

Question

Quizplus · Accepted Answer

Since you value the hat at $20, purchasing another hat for $15 is a good deal. Losing the hat does not change its value to you, so it would make sense to go back to the bookstore and purchase another one.

Suppose That You Value a Hat from Your Favorite University