Use the cost-benefit principle to evaluate the following:

a. You are about to buy a calculator for $10, and the salesperson tells you that the model you want to buy is on sale for $5 at the store’s other branch, which is a 20 minute drive away. Would you make the trip?

b. You are about to buy a laptop for $1,000 and the salesperson tells you that the model you want to buy is on sale for $995 at the store’s other branch, which is a 20 minute drive away. Would you make the trip?

c. Did you make the same choice in both cases? Should you have? Do you think this is how people actually choose?

Learning Objective 1.3 The Opportunity Cost Principle