Sunk Costs

question 54

Multiple Choice

Sunk costs:

• A) can be ignored because they have no effect on marginal costs.
• B) should be taken into consideration when choosing the best level of an activity.
• C) should not be ignored because they lead to higher marginal costs.
• D) can be ignored because they don't have to be paid by the decision maker.

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Definitions:

Recourse

The right to seek compensation or legal remedy in a situation where one has been wronged or harmed.

Utmost Good Faith

A principle requiring parties in certain types of contracts, such as insurance, to act honestly and not mislead or withhold critical information from one another.

Real Estate Agent

A licensed professional who represents buyers or sellers in real estate transactions, acting as an intermediary to facilitate sales, purchases, or rentals of properties.

Transaction

A business deal or action, such as buying or selling, that involves the exchange of goods, services, or funds.