Use the Following Scenario to Answer the Next Eight Questions

question 24

Multiple Choice

Use the following scenario to answer the next eight questions:
Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour.
-Based on the scenario,Dirk's opportunity cost of one basketball is:

• A) 1 1/3 footballs.
• B) 1 football.
• C) 3/4 football.
• D) 4 footballs.
• E) 3 footballs.

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Definitions:

Sunk-Cost Fallacy

The misconception that more resources should be dedicated to something because significant resources have already been spent.

Escalation Of Commitment

The phenomenon where people increase their investment in a decision despite new evidence suggesting it may be wrong.

Advance Limits

Predetermined restrictions or ceilings on the amount of funding, resources, or credit that can be allocated or extended in advance of certain conditions being met.

Escalating Commitment

The continuation of a course of action even though it is not working.