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Two economists are attending a conference in an unfamiliar city. At the end of the day, Economist A states she is in the mood for

Two economists are attending a conference in an unfamiliar city. At the end of the day, Economist A states she is "in the mood for a high-quality dinner" and wanders through the center of the city looking for a restaurant. After narrowing her search to two fine-dining establishments located on the same block, she ultimately selects the restaurant with the higher prices (assuming cost is not an issue for either economist). Economist B chooses to go to a one-price all-you-can-eat buffet.

Suppose while eating Economist A notices that the drinks are way too overpriced, much more than at the bar she saw down the same block. She does enjoy having a few drinks at dinner. What do you think will be her thoughts on this? Should she skip the drink at the restaurant and use the money to go to the bar down the block to have a few drinks there? Why or why not? Can you explain this with economic reasoning?

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