Savion is restoring a car and has already spent $4, 000 on the restoration. He expects to be able to sell the car for S 5800. Savion discovers that he needs to do an additional $2, 400 of work to make the car worth $5, 800 to potential buyers. He could also sell the car now, without completing the additional work, for $3, 800. What should he do? a. He should complete the additional work and sell the car for $5, 800. b. He should keep the car since it wouldn't be rational to spend $6, 400 restoring a car and then sell it for only $5,800. c. He should sell the car now for $3,800. d. It does. not matter which action he takes since the outcome will be the same either way.
Savion is restoring a car and has already spent $4, 000 on the restoration. He expects to be able to sell the car for S 5800. Savion discovers that he needs to do an additional $2, 400 of work to make the car worth $5, 800 to potential buyers. He could also sell the car now, without completing the additional work, for $3, 800. What should he do? a. He should complete the additional work and sell the car for $5, 800. b. He should keep the car since it wouldn't be rational to spend $6, 400 restoring a car and then sell it for only $5,800. c. He should sell the car now for $3,800. d. It does. not matter which action he takes since the outcome will be the same either way.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Savion is restoring a car and has already spent $4, 000 on the restoration. He expects to be able to sell the car for S 5800. Savion discovers that he needs to do an additional $2, 400 of work to make the car worth $5, 800 to potential buyers. He could also sell the car now, without completing the additional work, for $3, 800. What should he do? a. He should complete the additional work and sell the car for $5, 800. b. He should keep the car since it wouldn't be rational to spend $6, 400 restoring a car and then sell it for only $5,800. c. He should sell the car now for $3,800. d. It does. not matter which action he takes since the outcome will be the same either way.
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