A Sunk Cost Is One That

question 304

Multiple Choice

A sunk cost is one that

• A)changes as the level of output changes in the short run.
• B)was paid in the past and will not change regardless of the present decision.
• C)should determine the rational course of action in the future.
• D)has the most impact on profit-making decisions.

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Definitions:

CDs

Compact Discs, an optical storage medium used to store digital data including music, which has largely been replaced by digital downloads and streaming services.

Budget Constraint

The limitations on the consumers' ability to buy goods and services due to limited income and the prices of goods.

Income

Refers to the money received by a person or organization for work, from investments, or from various sources of revenue.

Budget Constraint

The limitations on the consumption patterns of individuals or firms due to limited financial resources.