You Have Tickets to Go to Jamaica Over Spring Break

question 47

Multiple Choice

You have tickets to go to Jamaica over spring break.Just this week your best friend informs you that he (she) is getting married over spring break.Your friend would like you to stay back in the city and be the wedding attendant.The tickets to Jamaica are nonrefundable.
Which of the following is a sunk cost relating to your decision of attending the wedding or going on the trip to Jamaica?

• A)The cost of the airline tickets to Jamaica
• B)The cost of wedding gift
• C)The cost of the clothing you will have to buy/rent to be in the wedding
• D)The cost of the rent on your apartment for the month

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Definitions:

Short Run

A period in which at least one factor of production is fixed and cannot be changed, limiting the firm's ability to adjust fully to market changes.

Monopolistically Competitive

A market structure characterized by many sellers offering differentiated products, allowing for some degree of market power.

Fixed Costs

Costs that do not vary with the level of output or production, such as rent, salaries, and equipment maintenance.

Short Run

A period in economics during which some factors of production are fixed, affecting output levels and costing.