Sunk Costs Are Those Costs That

question 15

Multiple Choice

Sunk costs are those costs that:

• A) do not vary without output.
• B) are forever lost after they have been paid.
• C) can be collected even after they have been paid.
• D) do vary with output.

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Definitions:

Constructive Processing

The way in which our memory reconstructs past events, often influenced by current knowledge, feelings, and thoughts.

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it, often referred to as the "I knew it all along" effect.

Misinformation Effect

The tendency of misleading information presented after an event to alter the memories of the event itself.

Loftus

Refers to Elizabeth Loftus, a cognitive psychologist best known for her work on the malleability of human memory and the misinformation effect.