In the Decision Process, Management Should Ignore

question 9

Multiple Choice

In the decision process, management should ignore:

• A) implicit costs.
• B) historical costs.
• C) sunk costs.
• D) incremental costs.

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Definitions:

Marginal Utility

The incremental utility or enjoyment gained from the consumption of one more unit of a good or service.

Opportunity Cost

Forgoing the chance to gain from other possibilities by selecting one option.

Consumer Behavior

The study of how individuals, groups, and organizations select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

Marginal Utility

The added value or satisfaction experienced upon consuming an additional unit of a good or service.