Question
(5 points) Elena has been trying to buy a copy of the DVD SCOOB! for her 10-year old son's birthday. Her son wants nothing else,
(5 points) Elena has been trying to buy a copy of the DVD "SCOOB!" for her 10-year old son's birthday. Her son wants nothing else, so Elena must do whatever it takes to buy a copy. After discovering that stores in her area were sold out, she phoned other stores and found a copy for $22.99 at a Walmart store 25 minutes away. She drove to the Walmart, but just before pulling into the parking lot, her husband called on her mobile phone to say that their neighborhood Target store just received a shipment that included several copies of "SCOOB!" for $14.99, and that Target would hold a copy for her. Elena must drive right past this Target store on her way home. What should Elena do? This is a multiple-choice question: please choose the single best answer and explain your choice.
A. Having sunk the cost of driving to Walmart, Elena should proceed to purchase the video for $22.99 as long as the opportunity cost of the 25-minute drive there exceeded $8.
B. Having sunk the cost of driving to Walmart, Elena should proceed to purchase the video for $22.99 regardless of the opportunity cost of the 25-minute drive to get there.
C. If the opportunity cost of the 25-minute drive home exceeds $8, Elena should pay $22.99 at Walmart. Otherwise, she should buy from the neighborhood Target store for $14.99.
D. Elena should buy the video at her neighborhood Target store for $14.99. E. None of the above are correct.
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