microeconomics

 

Daniel Jones thought he was getting his girlfriend the best surprise Valentine’s Day gift ever. He bought two airline tickets for the couple to fly from their home in Cambridge, England to Belfast, Northern Ireland to see her favorite band, the Red Hot Chili Peppers. With over 80 million records sold worldwide, Red Hot Chili Peppers are one of the best-selling bands of all time. Jones’ girlfriend had always wanted to see the band perform live, and Jones thought nothing could be better than a romantic trip to see the band play live on Valentine’s Day. Jones managed to keep the concert tickets a surprise until they landed in Belfast – in their hotel room she opened the envelope in which he had placed the concert tickets for her favorite band. Jones was surprised when his girlfriend, rather than jumping for joy, simply turned to him with a puzzled look on her face. It was then that Jones looked more carefully at the tickets, to realize that he had purchased two seats for a performance by the Red Hot Chili Pipers, the self-proclaimed “most famous bagpipe band in the world.” Jones later admitted that he was surprised at what a good deal he’d gotten on the tickets.

Here is the question: Having spent the equivalent of a thousand dollars or so on the airline tickets, hotel room, and concert tickets, should the couple actually go to the Red Hot Chili Pipers concert? Use sound economic reasoning to explain your answer. In particular, identify the concept that is the basis for your answer; explain that concept in general; and then apply that concept to this particular situation.