The Economic Rule of Thumb That Only Future Costs and Benefits

question 40

Multiple Choice

The economic rule of thumb that only future costs and benefits, not past commitments, should be considered in making a decision is the

• A) sunk cost principle.
• B) escalation effect.
• C) endowment effect.
• D) contingency model.

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Definitions:

Addiction

A psychological and physical inability to stop consuming a chemical, drug, activity, or substance, even though it is causing psychological and physical harm.

Amygdala

A part of the brain's limbic system involved in emotion regulation, fear processing, and the formation of emotional memories.

Hypothalamus

A region of the brain responsible for the regulation of certain metabolic processes and other activities, including temperature control, hunger, and circadian rhythms.

Autonomic Subdivision

A part of the nervous system that controls involuntary bodily functions, such as heart rate, digestion, and respiratory rate.