Lily has got a Black Pink concert ticket for $500. However, when she arrived at the

concert venue, she realized that she had lost the ticket on the way there. Lily is a big

fan of Black Pink and she had waited for this concert for a very long time. A person

approached her and offered his ticket for $600. If the value this concert brings to Lily

is worth $1,000, shall she buy the ticket (assuming the ticket is authentic)? Explain

your answer with reference to the most relevant principle of economics you learnt in

class. (should we ignore the $500 paid previously; or we should take into account?)

b. Your mother is considering opening a restaurant. Renting the shop is estimated to

cost her $80,000 per year and she also needs to put another $50,000 on other

expenses. In addition, she also needs to quit her current job as an accountant which

earns her $110,000 per year. If your mom thinks the expected revenue is $250,000

per year, should she open the restaurant if she is rational? Explain your answer with

reference to the most relevant principle of economics.