please answer question 6 acP the right econl un ught a 10 t

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.

Solution

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