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What difference would it make if the symphony tickets had cost $10,000 each? Why?

SITUATION: James and Janet Jones are trying to decide whether to go to the symphony or to the baseball game. They already have two nonrefundable tickets to "Pops Night at the Symphony" that cost $40 each. This is the only concert of the season they considered attending because it is the only one with the type of music they enjoy. The baseball game is the last one of the season, and it will decide the league championship. They can purchase tickets for $20 each. The Jones will drive 50 miles round-trip to either event. Variable costs for operating their auto are $.14 per mile, and fixed costs average $.17 per mile for the 18,000 miles they drive annually. Parking at the symphony is free, but it costs $6 at the ball game.

To attend either event, James and Janet will hire a baby-sitter at $4 per hour. They expect to be gone 5 hours to attend the baseball game, but only 4 hours to attend the symphony.

Compare the cost of attending the baseball game with the cost of attending the symphony. Focus on relevant costs. Compute the difference in cost, and indicate which alternative is more costly to the Jones. What would you choose?

What difference would it make if the symphony tickets had cost $10,000 each? Why?

1 Answer

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  • 1 decade ago
    Favorite Answer

    The Symphony tickets are sunk cost. The tickets are already paid for.

    That cost should not impact their decision other than the feeling of losing the perceived value.

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