Sunk Costs

question 48

Multiple Choice

Sunk costs:

• A) typically involve multiple units of output.
• B) do not vary across decision alternatives.
• C) come into play when judging the costs of adding a new product line, advertising campaign, production shift, or organization structure.
• D) play a role in determining the optimal course of action.

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Definitions:

Reaction Formation

A defense mechanism where an individual behaves in a manner opposite to their actual feelings or desires, often to hide those feelings.

Rationalization

A defense mechanism in which controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.

Projection

A defense mechanism in psychology where an individual attributes their own unwanted emotions, desires, or impulses onto someone else.

Displacement

A psychological defense mechanism where emotional impulses are redirected from a real object to a safer substitute target.