When Would Sunk Costs Be Irrelevant for Current Decision Making

question 13

Multiple Choice

When would sunk costs be irrelevant for current decision making?

• A) when the sunk costs are computed using accounting methods
• B) when the sunk costs are greater than variable costs
• C) when the sunk costs have been incurred only a short time ago
• D) Sunk cost are always irrelevant when making current decisions.

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Definitions:

Biogenic Needs

Fundamental human needs, such as food, water, and shelter, that are innate and necessary for survival.

Drive Theories

Theories in psychology that explain motivation as being driven by the need to fulfill basic biological needs.

Psychogenic Needs

are psychological desires or motivations that drive individual behaviors, often subconscious in nature.

Expectancy Theories

A group of theories that explain how people determine the likelihood of a specific outcome based on their actions, beliefs about their abilities, and the perceived likelihood of achieving their goal.