Question

"Consider the case of Will who paid $15 to see a movie, but after watching the film for 20 minutes he knows that it’s truly terrible. Should he stay and watch the rest of the movie because he paid $15, or should he leave?" In your answer, explain what the term used by economists to describe this specific problem if he decides to leave. Is there an opportunity cost to going to the movies?

Answer 1

Answer:

There is an opportunity cost to going to the movie and he should leave the movie.

Explanation:

Yes, there is an opportunity cost involved when the person goes for the movie. The opportunity cost will the work that he can do instead of going to the movie. For instance, if the person has the option to study or to watch a movie and he chooses the movie then the opportunity cost is the study. Moreover, he should leave the movie because it is terrible and if he does other work by leaving the movie then he will be benefited because the opportunity cost of doing other work will be lower.