[Microeconomic] Your favorite band is playing in town but you dragged your feet and did not...

[Microeconomic] Your favorite band is playing in town but you dragged your feet and did not buy tickets. it is the day of the concert and you decide to metro to the concert venue to see if you can buy a ticket from someone. upon getting there, you find the cheapter ticket on offer is for $115, you decide it is not worth spending that much to see the concert and trude back towards the metro. A car drives by and the occupation shouts," it is your lucky day!' and tosses an envelope your way, you open it and find a ticket to the concert, a passerby sees what happened and offers to buy the tickets from you for $115.
(a) Would you attend the concert (and not sell the ticket)
(b) Should you attend the concert?
Explain your answer to part (b) carefully;
your answer to part (a) can just be a "yes" or a "no". Assume there is no pandemic of any sort to worry about. (Pleasse comment in picture version)

Homework Answers

Answer #1

A) No,

B) initially he wasn't willing to buy ticket at 115$, which means the utility he get from watching concert will be lower than 115$.

Let assume that he will get 100$ utility from watching concert.

Now he get a free ticket.

He has two alternative:

i)Now if he goes and watch the concert ,he will get 100$ benefit or utility.

ii) He can sell the ticket at 115$ to nearby person and get 115$ ,which he can spend on other good .

Because he would be better off by selling the ticket ,so he should sell the ticket and don't watch the concert.

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