Why Isn't a Sunk Cost Part of the Opportunity Cost

question 23

Multiple Choice

Why isn't a sunk cost part of the opportunity cost of a decision?

• A)The expense would too often outweigh the benefits.
• B)The chances of recouping a sunk cost are exceedingly small.
• C)The money is gone, regardless of the decision made.
• D)Sunk costs are psychological and thus not a part of economic costs.

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Definitions:

Cecum

The first part of the large intestine, into which the ileum opens from one side, and is shaped like a pouch.

Ileum

The third and final portion of the small intestine, where absorption of nutrients and minerals concludes.

Colostomy

A surgical procedure that brings one end of the large intestine out through the abdominal wall to carry stool out of the body.

Colotomy

A surgical procedure involving the incision into the colon.