Nathalie is an expert in taxes and she prefers more money to less. She bought a ticket to see…
Nathalie is an expert in taxes and she prefers more money to
less. She bought a ticket to see Ariadne auj’Naxos at the opera. It cost her
$50. Unfortunately, she is sick on the day of the performance and she decides
not to go. The opera does not reimburse tickets but considers unused tickets as
donations. Her friend Robyn offers to buy her ticket for $15.
I. She rejects that offer feeling that since she paid $50,
Robyn should pay her no less than $50.
II. She rejects that offer because she prefers to donate the
unused ticket back to the opera. She knows that a donation of $50 will provide
her a tax credit of $20.
In which cases is Nathalie violating the sunk cost
a. I only
b. II only
c. Both I and II