Sunk Costs

question 65

Multiple Choice

Sunk costs

• A)can only be measured in monetary terms
• B)are opportunity costs
• C)should influence a person's choice if that person is a marginal decision maker
• D)lower the efficiency of production
• E)should not be considered when making economic decisions

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Definitions:

Compensation Contracts

Agreements that outline the salary, bonuses, and other forms of payment an employee receives from an employer.

Price Ceiling

A regulation that sets the maximum allowable price for a particular good or service, intended to prevent sellers from charging high prices during demand spikes.

Government Intervention

Actions taken by government to affect the economy, markets or societal issues, which can include regulations, subsidies, and taxes.

Positive Externalities

These are benefits that a transaction or activity provides to those not involved in the transaction or activity.